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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

PRODUCTION PLANNING AND CONTROL


1. Introduction: Customer is the king of modern business world. It is the orders of the customer, which set the wheel of production rolling. Customers will give more and more orders only when they get satisfied. Text: (i) A customer expects his supplier to make a commitment and then stick on to it. Once a delivery commitment is made then the supplier must ensure that proper instructions are given to all concerned departments. A good production, planning and control are essential for an organization to enable it to make reliable promises and then to stick to them. (ii) Delays and interruptions often cause difficulties while manufacturing and some kind of reporting system is required to identify those delays and interruptions. The supplier should periodically check the progress of the work and record that progress and he should compare against the plan and if there are nay deviations from the plan then he should take necessary steps to correct those deviations. This progressing function is the backbone of PPC. (iii) The supplier requires planning especially in case of rush orders. His planning should be flexible so that certain rush orders can be accommodated without disturbing the normal schedule. (iv) Quality of the product depends on the quality of the inputs. Quality control department has the responsibility of producing quality products. PPC ensures selection of right equipment, right tooling and quality materials. (v). The companys share of the market depends on its price. PPC helps the company to fix competitive price for its product. Conclusion: The two basic objectives of an organization are profitability and longterm growth of business. Good system of PPC helps the organization to
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

satisfy its customers and to make use of the available resources and to improve morale of the employees. 2. Introduction: Production, planning and control are the nerve centre of a production unit. The need and importance of the functions of PPC differs from industry to industry. Text: Functions of PPC: The allotment of functions to the PPC department depends on the type of industry. There are two types of PPC functions. They are as follows: (i) Regular function: Regular functions are those functions, which are normally assigned to PPC department in every organization though the importance of a function may vary from industry to industry. Regular functions of PPC are: a. Material planning b. Process planning c. Order preparation d. Tool control e. Scheduling f. Dispatching g. Progressing. (ii) Optional function: Optional functions are those functions, which may or may not be assigned to PPC department depending upon the policy of the management in this regard. Optional functions of PPC are:
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

a. Forecasting b. Sub-contracting c. Work measurement d. Capacity planning Contribution of PPC towards basic objectives: PPC helps to perform various activities in an industry from the receipt of an enquiry until the dispatch of goods to the customers, which in turn contributes to the growth of the company and its profitability. These activities are as follows: (i) The sales enquiry: The organizational activities start with the receipt of a sales enquiry in the marketing department. The enquiry may be accompanied by a sample or any other suitable quality description in order to give an idea of what is needed by the buyer. The sales enquiry may be received either: a. b. c. d. From a new customer when directed by the old customer; In response to the advertisement of the company; From an old customer for a new product; Due to the efforts taken by the salesman of the company;

(ii) Technical feasibility: A copy of the sales enquiry along with the attachments is sent to the concerned department or to a concerned person in the company in order to check its technical feasibility. The enquiry, which is found infeasible, is returned to the sales department who in turn informs the customer accordingly. The technical feasibility is studied in respect of materials, limiting dimensions, and other details. Conclusion: Thus, PPC contributes to the two basic functions namely long term growth of the business and profit of the company. PPC though consists of
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

various functions, all are not equally important. The need and importance of a particular function differs from industry to industry. 3. A. Introduction: Planning is a forward thinking while control is a mechanism for execution. Production planning is a centralized activity and it includes certain functions like preparation of order, material and tools control, process planning and scheduling. On the other hand, production control is a diffused activity and it includes certain functions like dispatching, progressing and expediting. Text: Distinguishing features of production planning and control: (i) Planning involves collection and maintenance of data, whereas control involves dissemination of data and preparation of reports. (ii) Planning involves preparation of load charts and fitting various work orders into uncommitted time available on the companys facilities, whereas control involves ensuring that the jobs are started and completed in accordance with the plan. (iii) Planning includes suitable feed-back as to what may happen while control involves verifying what is happening and gathering information as to what has happened. (iv) Planning involves thinking of remedial action to be taken if the work deviates from plan. Control involves suggesting remedial action when the work is deviating from the plan. (v) Planning includes preparation of forms and paper work while control includes actual issue of all forms and paper work. b. Information need of the department: PPC will be efficient only when the information it gets from other departments is accurate. The efficiency of PPC depends upon the effectiveness of the production department, lower cost of production, low
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

inventory investment etc. The following information is essential for efficient functioning of PPC department:

Information (i) Production programme (ii) Tooling (iii) Production materials (iv) Quality standards (v) Operation methods (vi) Path of materials (vii) Operation time (viii) Progress of work (ix) Scheduling

Department originating information Sales Production, planning and control Drawing office Drawing office and sales department Production, planning and control Production, planning and control Industrial Engg. Production Production, planning and control

Conclusion: The efficiency of PPC requires variety of information different departments of the company. PPC requires information on production programme, materials required, materials available, production methods, tool requirements, machine load and schedule charts, progress of work, etc. The efficiency of PPC also depends upon the co-operation it gets from other departments.

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

4. Introduction: The policies of the management have a definite influence on the design of PPC system. The policies that are required to be considered while designing a PPC system are: i. ii. iii. iv. Plan for meeting seasonal increase in demand. Status of the PPC department in the organization. Degree of centralization. Internal structure of PPC department.

Text: (i) Plan for meeting seasonal increase in demand: The system of PPC to be followed by the company is very much influenced by this factor. The following activities are involved under this: (a) Having factors of production for the peak demand and utilizing extra capacity to manufacture products of non-seasonal nature. (b) Having factors of production for the least demand and meeting requirements of extra capacity by working in holiday or overtime or subcontracting etc. (ii) Status of the PPC department in the company: The status of PPC department in the company depends upon the manufacturing processes of the company. If the work is highly repetitive and the number of workmen is less then the work of planning may be performed by the line staff themselves. PPC should be set-up as a separate department with a responsible person as its head and he should be made responsible for all the activities of the department. (iii) Degree of centralization:

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

This implies the extent to which planning activities are performed by PPC. This involves two systems. They are as follows: (a) Centralised planning: It means the functions of production planning are controlled centrally by staff specialist. The centralised planning takes away the burden of planning from the line staff and makes them free to handle men and machines more effectively. (b) Decentralised planning: This is carried out by line executive who directs normal work in their respective departments. This gives line staff a sense of participation and opportunity to make use of their experience but it wastes time in performing planning function. Both, centralised and decentralised planning has its own relative merits and demerits. (iv) Internal structure of PPC department: This implies the functions to be assigned to PPC which depends on the nature of the industry, the size of the company and the management policies. The following functions are generally assigned to PPC department: a. b. c. d. e. f. g. h. Order preparation Material control Tools control Process planning Scheduling Dispatching Progressing Expediting

Conclusion:

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

A decentralised system of planning is suitable in case of large size industrial units where the work is diversified. A centralised system of planning is desirable in case of small and medium size industrial units producing standard products. 5. Introduction: Production, planning and control consist of various functions. They are classified as common functions and optional functions. Common functions include order preparation, materials control, process planning etc. Optional functions include work measurement, cost estimation demand forecasting etc. Text: Meaning of materials control: It is a set of technique intended to provide manufacturing shops with materials of right quality, right quantities, and at the right time subject to minimum inventory investment. Inputs of materials control: The major inputs of materials control function are as follows: (a) Originating process of raw materials: This refers to the type of materials from which the part shall be produced. This can be obtained from the bill of materials. (b) Make-or-buy decision: A firm cannot produce all the materials which it requires to produce a product. The management has to decide which part has to be manufactured and which part has to be purchased. (c) Lot size: It refers to the quantity of the shop order, which equals order quantity, spoilage allowance and stock allowance. Stock allowance should be
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

considered only for companys own products and those produced to stock.

(d) Availability of materials: The availability of materials for standard items is indicated by the reorder level adopted by the store. (e) Machining allowance: These are extra materials required to ensure proper machining of the different surfaces of the job. Good knowledge of the various machining allowances is essential in order to prepare accurate estimate of materials. Steps in materials control: a. Analysing production requirements of the materials. b. Estimating requirements of materials for each shop order. c. Indenting requirement of non-stock materials. d. Ascertaining availability of stock materials. e. Make reservations if materials are available. f. Informing loading and scheduling section of PPC. Techniques of materials control: Materials control function is a major function since the cost of materials forms a major part of the selling of the final product. It consists of a number of techniques, they are as follows: (a) Make-or-Buy decisions to aid decision-making whether an item can be produced or procured.

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

(b) Scientific stock control to extend selective treatment to stock item and to take replenishment action in time.

Documents for materials control: The following materials are used in materials control: a. Bill of materials b. Shortage note c. Materials requisition d. Purchase indent e. Goods receipt report f. Materials control card g. Materials return note h. Materials scrap note

Conclusion: The function of materials control is mainly concerned with: a. conducting make-or-buy decision to find whether the item shall be manufactured or procured from the vendors. b. preparing materials estimates for works made parts. c. indenting requirements of non-stock materials.

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

d. ascertaining availability of those purchased or produced stock. e. instructing stores to reserve materials against specific work orders.

13. (C) Introduction: Line balancing is the arranging of a production line so that there is an even flow of production units from one workstation to the next. Line balancing problems are those of minimizing idle time along the production line resulting from unequal task times assigned to the various stations. Text: Steps in the line balancing: a. Tear down the total work into work elements. b. Construct a precedence diagram. c. Select a suitable cycle time and calculate the minimum number of workstations required. d. Seek further improvements.
e. Calculate efficiency and effectiveness of the proposed line.

Conclusion: Line balancing is the problem of assigning tasks to work stations in a production line in a way that tasks times for all stations are equalized as far as possible. Balance delay is the measure of the line inefficiency and is the total of idle time of all stations as a percentage of total available time of all stations.
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

D) Introduction: Forecasting may be defined as the projection based in past data. Past data though is factual yet rarely may it is reliable and free from errors. Forecasting may be either short term forecast or a long term forecast. Text: Methods of forecasting: (a) Synthetic forecasts: This is based on opinion surveys and this is the most widely used method of forecasting by manufacturers. This is a simple and useful method of forecasting demand for a new product. (b) Analytical estimates: It depends on actual demand data of past few years. Sales analysis of past few years can provide an indication of sales in future. (c) Use of economic indicators: This method of forecasting is done with the help of economic indicators. Though this method of economic indicators is useful and simple, selection of right economic indicator is often causes problem. Conclusion: Thus forecasting is an integral part of planning and decision making activity. In forecasting qualitative methods or quantitative methods are used to predict the future. Forecasting is a very difficult task. Many a practical difficulties are faced while making a forecast.
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

e. Introduction: Line-of-balance (LOB) is a device for planning and monitoring the progress of a project and is a powerful tool for co-ordinating a wide variety of production and purchase activities. The LOB chart indicates the progress of work required at each stage to keep manufacturing in line with the delivery schedule. Text: Steps involved in the technique of LOB: a. Preparation of an objective chart b. Determination of lead time and making of a plan of operation chart c. Making of a progress chart d. Making of a line-of-balance chart e. Recording the actual status of component completion f. Analysis of performance

Conclusion: The LOB is an effective instrument for co-ordinating the activities of different departments. It also helps to prevent production hold up, exercise more control on work-in-progress and maintain the delivery schedule.

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

15. (A) Introduction: Forecasting may be defined as the projection based in past data. Past data though is factual yet rarely may it is reliable and free from errors. Forecasting may be either short term forecast or a long term forecast. Text: Methods of Forecasting: Forecasting is not an easy task. There are three methods of forecasting. They are as follows: (i) Synthetic forecasts: This is based on opinion surveys and this is the most widely used method of forecasting by manufacturers. This is a simple and useful method of forecasting demand for a new product. The sale forecast, under this method may be biased due to: a. Temperament of few salesmen who are either over pessimistic or over optimistic b. Lack of knowledge on marketing strategies of the company c. Lack of sufficient time on the part of salesmen to prepare careful estimates d. Desire of individual salesmen to understate the demand and thereby obtain very low sales quota to achieve Therefore it is necessary that estimates obtained from the sales force should be aggregated, reviewed and adjusted by the top management taking into consideration certain factors like product improvement plans, changes in the levels of income, promotional activities and competitors expected performance etc.

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

(ii) Analytical estimates: It depends on actual demand data of past few years called time series. Sales analysis of past few years can provide an indication of sales in future. A time series consists of four parts: (a) Secular trend (T) is the overall growth or decline of business over a period of time. (b) Cyclical fluctuations (C) are the pattern of increase and decrease around the trend with periodicity equal to the trade cycle. (c) Seasonal fluctuations (S) are the oscillations around the trend with periodicity less than or equal to a year. These fluctuations are caused due to the changes seasons. The products of certain industries are sold only a particular season. (d) Random fluctuations (I) are the unexplained chance variations, which remain when other parts have been identified and removed from the original time series. (iii) Use of economic indicators: This method of forecasting is done with the help of economic indicators. Though this method of economic indicators is useful and simple, selection of right economic indicator is often causes problem.

Conclusion: Thus forecasting is an integral part of planning and decision making activity. In forecasting qualitative methods or quantitative methods are used to predict the future. Forecasting is a very difficult task. Many a practical difficulties are faced while making a forecast.

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

15. (B) Year 1998 1999 2000 2001 2002 n=5 a = y/n Deviation of year from Sale (y) 2000 (x) 800 -2 850 -1 900 0 950 1 1050 2 y=4550 x=0 = 4550/5 = 910 Square of deviation (x2) 4 1 0 1 4 2 x =10 Product of x&y -1600 -850 0 950 2100 xy=600

b = xy/x2 = 600/10 = 60 y = 910 + (60x) By putting x = -2, -1, 0, +1, +2 we get the following:

Year 1998 1999 2000 2001 2002

x -2 -1 0 1 2

Trend values y = 910 + 60 790 850 60 970 1030

For the year 2003, x = 3 [y = 910 + (60 *3)] For the year 2004, x = 4 [y = 910 + (60 *4)] = 1150 = 1090

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

10. a Introduction: Assignment technique is an optimization technique and it is useful in a situation where a certain number of tasks are require to be assigned to equal number of facilities, one task to each facility. Text: Steps in an assignment problem: Step1: Express the problem into (n x n) assignment matrix. Step2: Select the smallest number in each row and subtract it from every element of that row. Step3: Select the smallest number in each column of the reduced matrix and subtract it from every element of that column. Step4: Cover all zero elements by minimum number of straight lines. If the number of lines drawn is equal to n then the solution is optimal, and continues to step 7. If the number of lines drawn is smaller than n then go to step 5. Step5: Select the smallest uncovered element and subtract it from all uncovered elements including itself and add it to the elements covered twice and reproduce other elements as they are. Step6: Repeat step 4 and step 5 until optimum solution is obtained. Step7: Given the optimal solution make the job assignments as follows:

(a) Examine the rows one by one starting with the first row until a row with an exclusive zero is found. Mark the zero by enclosing it in a square indicating assignment of the task to the facility. Strike out all zeros in the column, as they cannot be used to make other assignments.

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

(b) Examine next the columns for any mutual exclusive zero and mark each as mentioned above, striking out the remaining zeros in that row. (c) Repeat (a) and (b) successively until either of the following conditions occur: (i) All zeros have been marked and each row contains one marked zero. This means that the optimal solution has reached. (ii) All zeros have not been marked. The remaining unmarked zeros lay at least two in each row and column. This means that more than one optimal solution exists.

b. Step 1 to Step 3:

Job 1 2 3 4
Step 4:

D1 25 35 25 30 D1 10 20 10 20

D2 25 20 15 10 D2 10 5 0 0

D3 20 15 20 25 D3 5 0 5 15

D4 15 20 18 20 D4 0 5 3 10

Job 1 2 3 4

Step 5:
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

Job 1 2 3 4

D1 10 20 10 20

D2 10 5
0 0

D3 5
0

D4
0

5 3 10

5 15

Step 6: The optimum solution is obtained. Step 7:

Job 1 2 3 4

Assigned to (machine) D4 D3 D2 D2

Processing time (hours) 15 15 15 10

Conclusion: The total processing time = 55 hours 9. A Flow chart

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

Start

Construct a sequencing matrix with jobs and two machines Scrutinize processing time of all jobs on both machines and select the smallest time

Does the smallest time occur on first machine

Schedule the job corresponding to the smallest time as close to the beginning of the job sequence as possible Delete the job scheduled and its corresponding processing times

Schedule the job corresponding to the smallest time as close to the end of the job sequence as possible

Have all jobs been scheduled?

Calculate start and finish time of each job on first machine

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

Calculate start and finish time of each job on second machine Determine total elapsed time to process all jobs though two machines Calculate idle time of each machine Stop

B)

Job A B C D E

Machine 1 4 17 14 9 11

Machine 2 5 7 12 2 6

The smallest processing time in the job array is 2 appears on second machine D

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

Job A B C E

Machine 1 4 17 14 11

Machine 2 5 7 12 6

The smallest processing time in the job array is 4 and it appears on first machine A D

Job

Machine 1

Machine 2

B C E

17 14 11

7 12 6

The smallest processing time in the job array is 6 and it appears in second machine A E D

Job B C

Machine 1 17 14

Machine 2 7 12

The smallest processing time in the job array is 7 and it appears on second machine A
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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

Job C

Machine 1 14

Machine 2 12

The smallest processing time in the job array is 12 and it appears on second machine A C B E D

Elapsed Time

Job Sequence Time In A C B E D 0 4 18 35 46

Machine 1 Time Out 4 18 35 46 55 Time In 4 9 21 28 34

Machine 2 Time Out 9 21 28 34 36

Idle time on machine 2 4 + 19 = 23

Conclusion: Minimum elapsed time = 55 hours Idle time on machine 1 = NIL Idle time on machine 2 = 23 7. A. Introduction:

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

Progressing or follow up is the process of checking actual performance against the production plan and reporting the deviations to the concerned authorities for taking remedial actions.

Text:

Need for progressing: Progressing is required even if the material control and process planning functions are discharged and scheduling is done properly and manufacturing orders are released on time. The need for progressing is also created when the customers do the follow up on their own to know the status of their orders. Methods for collecting information: (i) Perforated route sheets (ii) Detachable tickets (iii) Physical count (iv) Job cards (v) Daily production reports

b. (i) The following diagram represents perforated route sheets:

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

Shop Order No 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003

Op. No. 130 120 110 100 90 80 70 60 50 40 30 20 10

Operation Description Inspect Grinder chamfer Thread grind Grind OD Grind total length Grind bore and face Heat treat Inspect Cut keyway Finish blank Rough blank Drill 50 hole Saw off

Date of Completion

Sign

(ii) The following diagram represents Detachable sheet:


Shop Order Op. No. Operation Description Date of Completion Token No . Date Shift Oty Produced Operator Sign Supervisor

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SCDL- PGDBA- III Semester (Operations) Production Planning & Control Code 138

No 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 2003 120 120 120 120 120 120 120 120 120 120 120 120 120 Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear Shape Gear

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