1. State the objectives of production planning and control.

Objectives of Production Control The success of an enterprise greatly depends on the performance of its production control department. The production control department generally has to perform the following functions: Provision of raw material, equipment, machines and labour. To organize production schedule in conformity with the demand forecasts. 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. Determination of economic production runs with a view to reduce setup costs. Proper co-ordination of the operations of various sections/departments responsible for production. To ensure regular and timely supply of raw material at the desired place and of prescribed quality and quantity to avoid delays in production. To perform inspection of semi-finished and finished goods and use quality control techniques to ascertain that the produced items are of required specifications. It is also responsible for product design and development.

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Thus the fundamental objective of production control is to regulate and control the various operations of production process such a way that orderly flow of material is ensured at different stages of the production and the items are produced of right quality, in right quantity, at the right time with minimum efforts and cost.

The objectives or benefits of a system of production planning and control within a manufacturing firm are: 1. To ensure a system of regular availability and adequacy of labour, machines, and raw materials for production through the preparation of work and materials schedule thus allowing smooth and continuous production runs with reduced possibilities of disruptions and fewer stocking of raw materials. 2. To ensure that orders are met and that production targets and schedules are achieved in quantity, quality and cost. 3. To facilitate the co-ordination of production with other functions of business and ensure harmony with other sectional policies and the corporate objectives of the company. 4. To provide a basis for the maintenance of material and stock records 5. To ensure conformity of output with quality standards by maintaining constant touch between the design and the sales sections and the actual production department. 6. To use the best method of manufacture and minimize costs i.e. to ensure that the resources (costs) budgeted are not exceeded. 7. To make sure that machines and workers are co-ordinated and used efficiently i.e to prevent under and over utilization of equipment and manpower through the preparation of machine utilization schedules otherwise called machine loading. 8. To make sure that production workers understand what they are required to do through

Production of similar components or product (say the gear box of different medium sized cars of different car manufacturer) in moderate volume but with moderate variety in the component or product. an automobile ancillary can produce 15 different gear boxes of mid-size cars but with a volume of only 30. but their exact dimensional design would be very different depending on manufacturer. To point to or specify the actions that are needed to remedy deviation from planned or target output. Typically special purpose machine tools with hard (mechanical nonprogrammable) automation are used.000 per annum per gear box (but note that there are 15 different gear boxes). 13. . 10. 9. 12. Mass Production . Mass production is where loads of identical items are made.what they are required to produce and the pace at which they are to work. finished goods and work in progress are generally maintained at the optimum levels with the cardinal aim of ensuring an uninterrupted system of production to meet demand. Batch Production . To respond to the pattern of demand and prevent unnecessary pilling of stocks at the factory.a clear definition of targets .Production of a particular component or product in a production system that can handle large volume of production but with very little to no variety in the design of the component or product. To ensure that the right raw materials and components are used for producing goods. To avoid delays in production and errors arising form a stampede. an automobile ancillary can produce the tie rod of a particular model of car of a specific manufacturer but the volume would be as much as 500. and batch production is where the product is the same but with a few differences such as colour. A batch production is a limited production of an item. Typically CNC machine tools are used in flexible manufacturing systems for production. 2. For example. To ensure that raw materials. All are gear boxes. For example. Bring out the difference between mass and batch production system. 11.000 per annum. an electronic company might be asked to make say 30 printed circuit boards that would be subjected to extensive testing electronically and environmentally almost to destruction and modified for improvements if they proved satisfactory they would then be mass produced with the modifications embodied. rush or fire brigade approach.

military. The most commonly cited functions of management are planning. and other business functions. Fayol defined organizing as making provision for the structuring of activities and relationships within the firm and also the recruiting. Fayol defined planning in terms of forecasting future conditions. and communicating through meetings and conferences. or elements of management: planning. marketing. and developing means to attain objectives. government. Fayol emphasized the importance of managers understanding the people who worked for them. What are the chief elements to be considered while implementing the production control functions/tasks in an organisation? The functions of management uniquely describe managers' jobs. and controlling. setting objectives. Most later experts did not retain Fayol's coordination function as a separate function of . Fayol saw the function of coordination as harmonizing all of the various activities of the firm. organizing. Fayol was the managing director of a large French coal-mining firm and based his book largely on his experiences as a practitioner of management. setting a good example. organizing. in the sense that all managers performed them in the course of their jobs. These functions provide a useful way of classifying information about management. commanding. commanding as a managerial function concerned the personal supervision of subordinates and involved inspiring them to put forth unified effort to achieve objectives. Fayol defined five functions. although some identify additional functions. Fayol recognized that effective planning must also take into account unexpected contingencies that might arise and did not advocate rigid and inflexible plans. coordinating. whether the managers worked in business. and controlling. and most basic management texts since the 1950s have been organized around a functional framework. The functions of management define the process of management as distinct from accounting.3. leading. delegating. DEVELOPMENT OF THE FUNCTIONAL APPROACH TO MANAGEMENT Henri Fayol was the first person to identify elements or functions of management in his classic 1916 book Administration Industrielle et Generale. Fayol argued that these functions were universal. treating subordinates in a manner consistent with firm policy. According to Fayol. religious. finance. or philanthropic undertakings. evaluation. and training of personnel.

organizing. CRITICISM OF THE FUNCTIONAL APPROACH TO MANAGEMENT By the early 1970s. Nevertheless. his discussion of the practice of management as a process consisting of specific functions had a tremendous influence on early management texts that appeared in the 1950s. engage in the functions of management. these and several other management experts became identified with what came to be known as the process school of management. Fayol's work was not widely known outside Europe until 1949. Management pioneers such as George Terry. management is a distinct intellectual activity consisting of several functions. or level of management. The purpose of control was to identify deviations from objectives and plans and to take corrective action. Chief among the critics of the functional approach was Henry Mintzberg. Collectively. According to the process school. The process theorists believe that all managers. leading. He felt that the functional approach to the managerial job falsely conveyed a sense that managers carefully and deliberately evaluated information before making management decisions. regardless of their industry. Harold Koontz.management but regarded it as a necessary component of all the other management functions. some experts suggested that the functions of management as described by Fayol and others of the process school of management were not an accurate description of the reality of managers' jobs. Mintzberg argued that the functional or process school of management was "folklore" and that functions of management such as planning. . The process school of management became a dominant paradigm for studying management and the functions of management became the most common way of describing the nature of managerial work. when a translation of his work appeared in the United States. Fayol defined the control function in terms of ensuring that everything occurs within the parameters of the plan and accompanying principles. Cyril O'Donnell. and controlling did not accurately depict the chaotic nature of managerial work. organization. and Ralph Davis all published management texts in the 1950s that defined management as a process consisting of a set of interdependent functions.

and spokesperson. their competitors. Planners must then attempt to forecast future conditions. or activities: interpersonal roles. Research by David Lamond suggests that both approaches had some validity. He identified three informational roles: monitor. and negotiator. there was little in the findings that suggested that the functions of management were not a useful way of describing managerial work. leader. which are statements of what needs to be achieved and when. PLANNING Planning is the function of management that involves setting objectives and determining a course of action for achieving these objectives. While this research did indicate that managers performed at least some of the roles Mintzberg identified. Planners must then identify alternative courses of action for achieving objectives. Mintzberg's challenge to the usefulness of the functions of management and the process school attracted a tremendous amount of attention and generated several empirical studies designed to determine whether his or Fayol's description of the managerial job was most accurate. and decision-making roles. He described the interpersonal roles as consisting of figurehead. disseminator. he described four decision-making roles that included entrepreneur. the general conclusion seems to be that while Mintzberg offered a genuine insight into the daily activities of practicing managers. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. resource allocator. These forecasts form the basis for planning.Based upon an observational study of five executives. After . disturbance handler. and their customers. Thus. with Fayol's approach describing the ideal management job and Mintzberg describing the day-to-day activities of managers. It also requires that managers be good decision-makers. and liaison. which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions. Finally. informational roles. The process begins with environmental scanning. Mintzberg concluded that the work managers actually performed could best be represented by three sets of roles. Scholars continue to debate this question. Planners must establish objectives. Planning is a process consisting of several steps. the functions of management still provides a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals.

to three-year time horizon. planners must constantly evaluate the success of their plans and take corrective action when necessary. which provides a graphic . An organization's top management most often conducts strategic planning. There are many different types of plans and planning. Tactical planning often has a one. often three years or more. Operational planning usually has a very short time horizon. which is its fundamental reason for existence. The structure of the organization is the framework within which effort is coordinated. from one week to one year. Strategic planning generally includes the entire organization and includes formulation of objectives. ORGANIZING Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. as well as the strengths and weaknesses of the organization. The structure is usually represented by an organization chart. Strategic planning has a long time frame. STRATEGIC PLANNING Strategic planning involves analyzing competitive opportunities and threats. and then determining how to position the organization to compete effectively in their environment. Finally. OPERATIONAL PLANNING Operational planning generally assumes the existence of objectives and specifies ways to achieve them. They must then formulate necessary steps and ensure effective implementation of plans. planners must make decisions about the best courses of action for achieving objectives. Operational planning is short-range planning that is designed to develop specific action steps that support the strategic and tactical plans. Middle-level managers often engage in tactical planning. TACTICAL PLANNING Tactical planning is intermediate-range planning that is designed to develop relatively concrete and specific means to implement the strategic plan.evaluating the various alternatives. Strategic planning is often based on the organization's mission.

including organizing by function. Therefore. Traditionally. or cluster jobs into departments to effectively coordinate effort. If managers are effective leaders. product.representation of the chain of command within an organization. the behavioral sciences have made many contributions to the understanding of this function of management. Decisions made about the nature of jobs within the organization are generally called "job design" decisions. negative outcomes result. Organizing at the level of job involves how best to design individual jobs to most effectively use human resources. Organizing at the level of the organization involves deciding how best to departmentalize. Decisions made about the structure of an organization are generally referred to as "organizational design" decisions. and emotions. and effectively use power. There are many different ways to departmentalize. attitudes. LEADING Leading involves influencing others toward the attainment of organizational objectives. Organizing also involves the design of individual jobs within the organization. . Many jobs are now designed based on such principles as job enrichment and teamwork. which assumed that the more narrow the job content. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates. Effective leading requires the manager to motivate subordinates. job design was based on principles of division of labor and specialization. To become effective at leading. Decisions must be made about the duties and responsibilities of individual jobs as well as the manner in which the duties should be carried out. the more proficient the individual performing the job could become. geography. experience has shown that it is possible for jobs to become too narrow and specialized. values. or customer. Many larger organizations utilize multiple methods of departmentalization. including decreased job satisfaction and organizational commitment and increased absenteeism and turnover. communicate effectively. However. Recently many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. When this happens. managers must first understand their subordinates' personalities. their subordinates will be enthusiastic about exerting effort toward the attainment of organizational objectives.

The measurement of performance can be done in several ways. comparing actual performance against standards. which include establishing performance standards.Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. depending on the performance standards. managers must also control production/operations processes. or profits. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. . Managers at all levels engage in the managerial function of controlling to some degree. number of defective products. attitudes. Effective controlling requires the existence of plans. and formal performance appraisals. and many other activities within the organization. This function does not imply that managers should attempt to control or manipulate the personalities. Studies of leadership and leadership style provide information regarding questions such as. this function of management concerns the manager's role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives. values. Two traditional control techniques are the budget and the performance audit. The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. costs. procedures for delivery of services. Controlling consists of three steps. such as units produced. Performance standards are often stated in monetary terms such as revenue. Although controlling is often thought of in terms of financial criteria. but may also be stated in other terms. customer satisfaction. Instead. since planning provides the necessary performance standards or objectives. compliance with company policies. production results. including financial statements. "What makes a manager a good leader?" and "In what situations are certain leadership styles most appropriate and effective? CONTROLLING Controlling involves ensuring that performance does not deviate from standards. or emotions of their subordinates. Studies of communication provide direction as to how managers can effectively and persuasively communicate. or levels of customer service. and taking corrective action when necessary. sales reports.

7. It may include even new factors that generated the demand in the factors that may affect future demand. Prediction does not contain error analysis. 5. and sometimes becomes obsolete. It is more governed by personal bias and preferences. 5. Forecasting is objective. is subjective. 4. Forecasting and prediction are two different things. Inventory itself does not create value for customers. 3. Prediction. Forecasting is reproducible. Only limited error analysis is possible in predictions. non-reproducible and contains individual bias. scientific. Error analysis is possible. 8. Beforehand” technique. It is generally called as “Throw Ahead” 6. 4. Forecast involves estimating the level of 2. reproducible. 3. Unfortunately. managers still perform these essential functions. Bring out the differences between forecasting and prediction. Yet for most companies.. 7. it consumes space. on the other hand. past into the future. Forecasting involves the projection of the 1. i. 6. Table Difference between Forecasting and Prediction Forecasting 1. Forecasting is more scientific. mostly intuitive. organizing. Prediction Prediction involves judgment in management after taking all available information into account. 4. past maths. Many businesses underestimate the carrying cost of inventory. and controlling are widely considered to be the best means of describing the manager's job as well as the best way to classify accumulated knowledge about the study of management. It is more objective. inventory is a necessary component of the business cycle and must be carefully managed. time same result would be obtained by any particular technique. It is non-producible. 2. free from individual bias and error analysis is possible in it. It is generally called as “Saying technique. every 8.e. Explain the inventory reduction options and tactics? Inventory is the largest single asset that most companies have. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles. They calculate carrying cost based on the borrowing cost of money alone. Prediction is more intuitive. leading. It is relatively free from personal bias. .The management functions of planning. Other factors can outweigh this cost. Prediction involves the anticipated change demand of a product on the basis of into the future. gets damaged. 5. It is more subjective.

and less cost overall. In general. Top Five Inventory Reduction Techniques Reduce Lead Times for Product Replenishment The most effective way for businesses to reduce inventory is by reducing the supply lead time. Changing your order frequency from twice a month to once a week or even daily can cut total effective lead times substantially. no inventory counting. something to keep in mind when selecting suppliers. no order follow-up. you can expect the following reductions in inventory as lead times are reduced: Note that lead time can be separated into three components: review time. Imagine how simple business would be if lead time was zero and orders were filled instantly. Short lead times with a high degree of uncertainty can force necessary inventories upward. the less complex our inventory management will be. no obsolete inventory. no forecasting. no product damage. but the shorter the lead times. Lead time can be defined as the time it takes from when you first determine a need for a product until it arrives on your doorstep. Obviously this is not possible. greater product damage. Review time is the time it takes for your company to generate an order. Keep in mind that lead time reliability is just as important as lead time itself. manufacture time and transit time. fewer employees. the annual carrying cost of inventory is an astounding 20 percent to 40 percent of the materials cost. For most products. . more frequent product obsolescence.Major costs of high inventory include increased rent expense and handling costs. inventory could be zero. less risk of theft. and walk out happy with no delay. order whatever they want. There would be no warehouse space. A customer could walk through your door. If lead time was zero. and longer delay in noticing quality errors.

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