Production Planning and Control

Meaning of Production Planning: Production planning means to fix the production goals and to
estimate the resources which are required to achieve these goals. It prepares a detailed plan for
achieving the production goals economically, efficiently and in time. Production planning involves
the means by which a manufacturing plant is determined, information issued for its execution, data
collected and recorded, which will enable the plant to be controlled through all its stages.
According to Kimball: “The planning of operations involves four considerations, namely, what
work shall be done, how the work shall be done & lastly, when the work shall be done”.
According to Bethel: “Production planning is a series of related and co-ordinate activities
performed by not one but a number of different departmental groups, each activity being to
systematize in advance the manufacturing efforts in its area.”
Levels of Production Planning: Production planning can be done at three levels namely are:
1. Factory Planning: At this level of planning the sequence of work/ tasks is planned in terms of
building, machines & equipment required for manufacturing the desired goods and services.
The relationship of workplaces in terms of departments is also planned at this stage taking into
consideration the space available for the purpose.
2. Process Planning: There are many operations involved in factory planning for transforming the
inputs into some desired end product. In this operations are located in sequence of operations
determined production process. Plans are made for the layout of work centers in each process.
3. Operation Planning: It is concerned with planning the details of the methods required to
perform each operation viz. selection of work centers, designing of tools required for various
operations. The sequences of work each operations are planned. Specifications about work
centers, nature of tools required & time necessary for the completion of each operation.
Objective of production planning:
1. Effective utilization of resources: Production planning results in effective utilization of
resources, plant capacity & equipment. This results in low-cost & high returns for organization.
2. Optimum inventory: It ensures optimum inventory. It prevents overstocking & under stocking.
Necessary stocks are maintained. Stock of raw material is maintained at a proper level in order
to meet the production demands. Stock of finished goods is also maintained to meet regular
demands from customers.
3. Estimate the resources: Planning helps to estimate the resources like men, materials, etc. The
estimate is made based on sales forecast. So production is planned to meet sales requirements.
4. Steady flow of production: Production planning ensures a regular and steady flow of
production. Here, all the machines are put to maximum use. This results in a regular production,
which helps to give a routine supply to customers.
5. Minimize wastage of raw materials: Production planning minimizes wastage of raw materials.
It ensures proper inventory of raw materials and materials handling. This helps to minimize
wastage of raw material. It also ensures production of quality products or goods. This results in a
minimum rejects. So proper production planning and control results in minimum wastage.
6. Provides a better work environment: It provides a better work environment to the workers.
Workers get improved working conditions, proper working hours, leave and holidays, increased
wages and other incentives. This is because the company is working very efficiently.
7. Facilitates quality improvement: Production planning facilitates quality improvement because
the production is checked regularly. Quality consciousness is developed among the employees
through training, suggestion schemes, quality circles, etc.
8. Reduces the production costs: It makes optimum utilization of resources, and it minimizes
wastage. It also maintains optimum size of inventories. All this reduces the production costs.
Categories of Production Planning
1. Routing: Routing involves the determination of the path that work shall follow and the order in
which various operations will be carried out. The objective of routing is to find out the best and
the cheapest sequence of operations. While preparing the route card, it must be kept in mind
that machines in the plant are operated at their full capacity; and manpower and other facilities
are best utilized. “Routing means determination of the route to be followed by each
part/component being transformed from input/raw material into final product.”
Routing fixes in advance:
1. The quantity and quality of the product.
2. The men, machines, materials, etc. to be used.
3. The type, number and sequence of manufacturing operations, and
4. The place of production.
• In short, routing determines ‘What’, ‘How much’, ‘With which’, ‘How’ and ‘Where’ to
produce. Routing may be either very simple or complex.
• Routing gives a very systematic method of converting raw-materials into finished goods.
• The main objective of routing is to determine (fix) the best and cheapest sequence of operations
and to ensure that this sequence is followed in the factory.
2. Scheduling: It is 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 factors concerned. It involves the preparation of a time-table, indicating the total time
needed for the manufacture of a product as also the time expected to be spent at each machine
and process. In preparing schedules, the persons concerned will have to take into consideration
the various types of orders on hand and the dates by which their completion has been promised.
In the words of Kimball and Kimball, Scheduling is 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.
There are different types of schedules; Master schedule, Operation schedule and Daily schedule.
• Master Schedule: This indicates desired quantities of each type of product to be produced on a
daily, weekly, monthly or quarterly basis to meet the customers’ orders or forecasted demand.
• Operation schedule: It refers to fixing the final total time required to do a particular piece of
work (operation)
• Daily Schedule: It reveals the time required to do each detailed operation of a given job with
the assigned machine or process.
3. Loading: It means the quantity of work, & allocating the quantity of work to the processes
necessary to manufacture each item is called loading. It may be defined as the assignment of
work to a facility. The facility may be people, equipment, machine work groups or an entire
plant. Therefore, machine loading is the process of assigning work to machine. Loading deals
with the amount of work assigned to a machine or a worker. The total time is then added to the
work already planned for the work station.
Two approaches are used for loading work centers: infinite loading and finite loading.
• Infinite loading jobs are assigned to work centers without regard for capacity of the work
center. Priority rules are appropriate for use under the infinite loading approach. Jobs are
loaded at work centers according to the chosen priority rule. It is known as vertical loading.
• Finite loading projects the actual start and stop times of each job at each work center. Finite
loading considers the capacity of each work center and compares the processing time so that
process time does not exceed capacity. With finite loading the scheduler loads the job that has
the highest priority on all work centers it will require. It is referred to as horizontal loading.
 Production Control
Production Control: The production control is the function of management which plans, directs
and controls the material supply and processing activities of an enterprise. It ensures that activities
are carried out in such a way that the available labour and capital are used in the best possible way.
Production control is scientific procedure to regulate an orderly flow of material and co-ordinate
various production operations to accomplish the objective. In right quantity of desired quality at
the required time by the best & the cheapest method i.e., to attain highest efficiency in production.
According to Niles, “Control is maintaining a balance in activities towards a goal or set of goals
evolved during production planning.”
Objectives of Production Control:
1. Provision of raw material, equipment, machines and labour.
2. To organize production schedule in conformity with the demand forecast.
3. The resources are used in the best possible manner in such a way that the cost of production is
minimized and delivery date is maintained.
4. Determination of economic production runs with a view to reduce setup costs.
5. Proper co-ordination of the operations of various sections/departments responsible for
production.
6. To ensure regular and timely supply of raw material at the desired place and of prescribed
quality and quantity to avoid delays in production
7. To perform inspection of semi-finished and finished goods and use quality control techniques to
ascertain that the produced items are of required specifications.
8. It is also responsible for product design and development.
9. It is to regulate & control the various operations in such a way that orderly flow of material is
ensured at different stages of the production.
10. Items are produced of right quality, right quantity at right time with minimum efforts & cost.
Techniques of Production Control:
1. Programming: Programming regulates the supply of finished product in desired amount at the
due date in accordance with the production plan. Programming ensures most efficient use of
labour, equipment and capital. In production programming three main decisions are taken:
a) Nature of the product to be manufactured: Here the affect of different ranges of product on
the utilisation of facilities should be considered at the market appreciation stage and the
decision made at this stage should not be altered later.
b) Amount of Quantities to be produced: This is normally determined from the sales
programme.
c) When to produce: This is to decide that when or in which periods the desired output is to be
manufactured.
2. Ordering: It breakdown the requirements for products to be completed at specific times into
orders for materials & parts to do so in such a way that they ate available when needed. It takes
into consideration the targets prescribed in a programme by planning the output of the desired
components from some external supplier & the processing department of the organisation. It
contains the quantities to be produced by the supplier & different departments as well as the
time by which the work should be completed. The information is required for each order.
a) Requirement Quantity: This information can be gathered from master schedule. An
allowance has to be made for scrap which may be derived from historical records.
b) Order Quantity: Generally it is same as requirement quantity but for some regular usage item
one may have bigger lot. Ordering, the order date is of great significance. If an order is released
too early, it would entail storage costs and if it is too late then the service would be poorer.
Following are the main decisions in ordering:
1. The desired total quantity of various compounds,
2. The delivery date,
3. How much to order?
4. When to issue the order?
5. In what quantities the parts are to be procured and the purchases are to be delivered?
6. Nature of the components namely products, spares and scrap.
3. Dispatching: Dispatching is the routine of setting production activities in motion through the
release of order and instructions in accordance with previously planned times and sequence
embodied in route sheets and schedule charts. It considers each processing department one by
one and plans the output from machines, tools and other work centers so as to complete the
orders by due date. After ordering, next step is to bring together the inputs, i.e., plant, labour,
special tools and material required for each production operation on each part and assembly.
Functions of Dispatching:
a) To check the immediate availability of materials.
b) Ensuring that all production and inspection aids are available for use.
c) To collate jobs, operation layouts, routine etc. with the design.
d) Processing information or inspection schedule.
e) Assign the work to definite machine, work place and men.
f) To issue necessary materials, tools etc. to correct points for use.
g) To issue production order note stating the start and finish times.
h) To inform the progress section about the start of the work.
i) Instruction to start the production.
j) To return the acquired material and other aids to the correct location.
k) Maintain all production records viz. time lost in production and the causes for delay; incidence
of machine breakdown; change in capacity etc.
4. Progressing or Follow-up: Follow-up is checking production activities systematically so that
production may be carried out according to plan. It is the measurement of output against plan,
analysis of performance for shortfalls and following up the line management to apply corrective
action for excessive short-fall. Follow-up is a most important step of production control. This
step is to ascertain from time-to- time that the production operations are progressing according
to the plan. Progressing is the function by which one can give an early warning when actual
production deviates from planned production & makes possible to take corrective action.
The necessity of progressing arises due to:
a) Failure to deliver materials on time.
b) Machines/power breaks down.
c) Employees absenteeism.
d) Errors of design, planning or human activity,
e) Unnecessary delays/bottlenecks.
Progressing can do following tasks:
1. Recording actual production.
2. Compare it with planned production.
3. Measure the variability in production.
4. Reporting the excessive variance to the authority responsible for execution of the
production plan.