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MODULE 2
Chapter 3
PRODUCTION PLANNING AND CONTROL

Introduction
Production planning and control is concerned with
implementing the plans, i.e. the detailed scheduling of jobs,
assigning of workloads to machines (and people), and the
actual flow of work through the system. Production is an
organized activity of converting row materials into useful
products. Production activity takes place in a wide range of
manufacturing and service sectors. Production system
requires the optimal utilization of natural resources like
men, money, machine, materials and time. Production
planning and control coordinate with different
departments: such as production, marketing, logistics,
warehouse and other departments depending upon the
nature of organization. Production planning and control
receives data related to orders from marketing departments.
Production plan based on marketing and production data is
prepared in production planning and control. This
production plan provides clear idea about utilization of
manufacturing resources for production. Prepared
production plan is delivered to production department.
Production department manufacture products according to
that plan.
Production planning and control can be viewed as nervous
system of the production operation. This function aims at
efficient utilization of material resources, people and
facilities in any undertaking through planning, coordinating
and controlling the production activities that transform the
raw material into finished products or components as a
most optimal manner. All the activities in manufacturing or
production cycle must be planned, coordinated, organized
and controlling to its objectives. Production planning and
control as a department plays a vital role in manufacturing
organizations. It is clear from name that it is something
about planning. Planning is defined as setting goals.
Production planning and control provides different kinds of
information to different departments. It provides
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information about available manufacturing resources to
marketing department. Marketing department receives
orders according to that information. Similarly, it
coordinates with other departments and provides relevant
information.

PRODUCTION PLANNING
Meaning
According to Ray Wild, “Production Planning is concerned
with the determination, acquisition and arrangement of all
facilities necessary for future operations.”
Alford and Beatty, has defined Production Planning as,
“the technique of forecasting or picturing ahead every step in
a long series of separate operations, each step to be taken
in the right place, at the right degree, and at the right time,
and each operation to be done at maximum efficiency.”
Objectives of Production Planning
1. To achieve coordination among various departments relating to
production.
2. To make adequate arrangement of men, money, materials,
machines tools, implements and equipment relating to
production.
3. To decide about the production targets to be achieved by
keeping in view the sales forecast.
4. To keep production operation continuous.
5. To achieve desired share of the market.
6. To fix right type of man for right type of job.
7. To achieve the desired level of profit.
8. To make all arrangements to remove possible obstacles in the
way of smooth production.
9. To achieve economy in production cost and time.
10. To initiate production on modern lines.
11. To operate the plant at planned level of efficiency.
12. To develop alternative plans in order to meet any emergency or
contingency.
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PRODUCTION CONTROL
Meaning
According to Alford and Beatty “production control is
concerned with the observation of current
happenings, their recording and continuous comparison
with the planned production programme. Deviations from
the established routine are reported promptly to the
person with requisite authority and responsibility for
remedial corrective action”.
According to Henry Fayol, Production Control is the art and
science of ensuring that all which occurs is in accordance
with the rules established and the instructions issued”.
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.
Thus the fundamental objective of production control is to
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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.

Production Planning and Controlling (PPC)

Planning and control are two basic interdependent and
interrelated managerial functions that are treated as
Siamese Twins. Planning is the preparation activity while
control is the post-operation activity. Planning involves
setting up of standards and controlling made by
comparing the actual with the standard and deviations
are ascertained and analyzed. The aim of production
planning is to anticipate possible difficulties and decide in
advance as to how the production should be carried out in
the best and economical way. The aim of production
control is to produce the products of right quality, in right
quantity, at the right time by using the best and least
expensive methods. Planning initiates action while control
is an adjusting process, providing corrective measures
for planned development. Production control
regulates and stimulates the manufacturing process
from the beginning to the end. Thus planning is
meaningless unless control action is taken to ensure the
success of the plan. Control also provides information
feedback which is helpful in modifying the existing plans
and in making new plans.
Definition of Production Planning and Control
According to Alford and Beatty, “Production Planning and
Control involves planning, routing, scheduling,
dispatching, and expediting to coordinate the
movements of materials, machines and manpower as to
quantity, quality, time and place. It is based upon the old
adage of “first plan your work and then work your plan”.
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According to Gorden and Carson, “Production planning
and control involve generally the organization and
planning of manufacturing process. Especially it consists
of the planning of routing, scheduling, dispatching
inspection, and coordination, control of materials,
methods, machines, tools and operating times. The
ultimate objective is the organization of the supply and
movement of materials and labour, machines utilization and
related activities, in order to bring about the desired
manufacturing results in terms of quality, quantity, time
and place.”

2. OBJECTIVES OF PRODUCTION PLANNING AND

CONTROL

a) Nature of Inputs To manufacture a product, different

types of inputs are used. The quality of the product depends
upon the nature of the inputs are used. Hence the planning
is done to determine the nature of various types of inputs
which is a complicated process.
b) Quantity of Inputs To achieve a level of production,
determination of quantity of the inputs and their
composition is very important. A product can be prepared
only when there is an estimate of the required composition
of inputs.
c) Proper Coordination It ensures the proper coordination
among the workforce, machines and equipment. This leads
to avoidance of wastages and smooth flow of production.
d) Better Control Production planning is the method of
control. For a better control, planning is a precondition.
Only then, one can compare the performance and calculate
the deviations which lead control of the production.
e) Ensure Uninterrupted Production The planning of
materials ensures the regular supply of raw materials and
other components. The regular flow of materials and
supplies are helpful in the uninterrupted production.
f) Capacity Utilization
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There is a need to use the available resources effectively. It
is helpful in bringing down various costs of production. g)
Timely Delivered If there is good production planning and
control, there will be timely production and the finished
product will be rushed to the market in time. This also
ensures the better relationship with the customers.

Pre-requisites of PPC
For an effective planning and controlling of production
activities, the executives concerned must have complete
information regarding the following: -
 A sound organization structure with clear cut
authority and responsibility.
 Production plans should be flexible enough to meet
emergencies.
 A complete analysis of the product to be
manufactured, the process through which each
product must pass, the nature of inspection required,
and the method of assembly.
 Machine analysis giving full information regarding
speeds of all available machines and their maximum
capacity to perform certain operations, and the rate of
output per day, week or month, and the maximum
plant capacity per day for each process.
 The various types and classes of standardized tools
and equipment required for production.
 Material analysis giving complete information as to
the type, quality and quantity of the raw material to
be used in each process. Also, information as to raw
materials in stores, how much are in order, and how
much are reserved for current orders.
 The characteristics of each job and the degree of skill
and personnel qualifications required for the effective
performance of each such job.
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 Continuous checking of production system to avoid
wastages.
 Information relating to power production and
consumption, internal transport and material
handling service.
 Feedback from different levels of production, if
deviations are found.
 Job analysis giving information as to what methods of
operation would yield uniformity of output, ease in
production and reduction in costs.
 Information as to the customers’ orders on hand and the
delivery of goods.
FACTORS AFFECTING PRODUCTION PLANNING AND
CONTROL

a) Use of Computers Modern factories are using office

automation equipment like PC, punch cards etc. It helps
accurate computation of required of men and machine.
b) Seasonal Variations Demand of certain products is affected
by seasons, for instance umbrellas and raincoats during the
monsoons and outputs. Production planning and control must
take such changes into consideration while planning and
control activities of inputs and outputs.
c) Test Marketing In an aggressive marketing strategy new
products are to be test marketed in order to know the trends.
This is a short- cycle operation, intermittent in nature and
often upsets regular production.
d) After Sales Service This has become an important parameter
for success. In after sales services, many items are returned for
repair. These are unscheduled work and also overload the
production line.
e) Losses due to Unpredictable Factors Losses occur due to
accidents, fire and theft of production inputs, mainly materials
and components. These are unpredictable. Shortage of input
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due to such factors upset the planned production schedule in
time and quantity.
f) Losses due to Predictable Factors There are losses of
inputs, due to natural d engineering phenomena like
production losses and changes in consumption of materials
and occurrence of defectives.
g) Production of Order There are occasions when last minute
prioritization of existing orders due to external pressure takes
place. These changes in priority are often decided by
sufficiently high level of management.
h) Design Changes Design changes are issued by R & D and
the engineering department. This will necessarily force
production planning control change the input materials and
process.
i) Rejection and Replacement There are occasions when sub-
assemblies or finished goods are rejected during stage or final
inspection. Production planning and control must cater for
contingent plans to take care of rework without affecting
scheduled quality.

Production Planning and Control Organization

It’s obvious that there is no single pattern for the
organization of the production planning and control
activity. In many small plants the routing, loading, and
scheduling functions may be included in the duties of the
shop manager, superintendent, and foremen. As it is
difficult to combine day-to-day work with adequate
planning, the PPC functions and duties must be broken
down and assigned to qualified staff specialists. Depending
upon the design of the PPC system, it can be:-
1) Centralized Production Planning and Control
In a completely centralized setup, analysis of sales, stock,
and orders; preparation of routes, load charts, and
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schedule charts; and dispatching of work to the shop, with
job tickets and all other necessary papers would be
accomplished by a central production planning and control
unit. In addition, as work is completed, a careful analysis
of the actual performance would be made, and if corrective
action were required, it would be initiated by this group.
2) Decentralized Production Planning and Control
No matter how general the planning may be in a central
office, the plan must be developed into a detailed plan on
the shop floor. Some companies are now trying to make
each foreman, a manager of his own departmental operation.
In these cases the foreman is furnished with a complete
staff for the production planning and control of the
activities in the department which involves different
phases like,
Planning Phase where, the personnel are required to
prepare the activity routes, load charts and schedule
charts.
Control Phase is reporting back from the shop floor that
indicates the progress of the job and its completion which
includes submission of completed job ticket, or its
equivalent.
Advantages of PPC
The system of PPC serves as the nervous system in all
plants irrespective of their nature and size. It is a
coordinating agency which co-ordinates the activities of
various departments. An efficient system of PPC helps in
providing better and more economic goods to
customers at lower investment.
(1) Optimum capacity and resources utilisation.
(2) Better inventory control and effective purchasing.
(3) Economy in production time.
(4) Ensure right quality supplies at right time.
(5) Make sure quality standards are followed so that
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quality of output is ensured.
(6) Better service to customers
(7) Effective use of equipment.
(8) Reduced idle time
(9) Good public image
(10) Lower capital requirements.
(11) Steady flow of production which reduces the costs.
(12) Co-ordinates activities of departments.
13) Minimize wastage of raw materials.
(14) Improves the labour productivity and morale.
(15) Helps to capture the market.
(16) Provides a better work environment.
Function or Scope of PPC
Production Planning and Control is a process that
comprises the performance of some critical functions that
are performed by production department, viz., planning
and control. PPC comprise of planning, routing, dispatching
etc. in the manufacturing process. It is the process of
planning the production in advance, setting the exact route
of each item given in “production order” to shops and lastly
to follow up of progress of produces according to order.
Preplanning, Planning & Control phases
The activities of preplanning, planning and control may be
considered to take place in a time sequence. The
preplanning is completed before production commences.
Planning takes place immediately before production starts
and control is exercised during production.
Preplanning : It is the procedure followed in developing and
designing a work or production of a proper layout or tools. It
involves many functions like forecasting, product design, jigs
and tool design, machine selection and estimating to
enable proper design to be made. In short, preplanning
decides what shall be made and how it shall be made.
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Planning : This stage decides where and when the product
shall be made. It includes the sequencing of operations and
the time schedule for manufacturing viz scheduling. It also
states procedures for material planning and supplies,
machine loading and deliveries. To perform these
functions, it will need past records and control statistics
which may be obtained from pre- planning, cost control.
Control : This refers to the stage of ensuring that the planned
action is intact. Control initiate the plan at the right time
using dispatching and thereafter it makes appropriate
adjustments through progressing to take care of any
contingencies that might arise. It includes measurement
of actual results, comparison of the same with the planned
action and feeding back information to the planning stage to
make any adjustments required. The pattern of control is seen
in material control, machine utilization, labour control, cost
control and quality control.
All the functions are categorized in three stages, that is

Pre-planning stage Planning stage Control stages

* Product development Routing
* Process design Materials Estimating
* Sales forecasting
and estimating Methods Scheduling

* Plant location
* Plant layout and Machines Despatching
Layout of facilities
* Equipment policy Manpower Inspection
Expediting
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Steps or Stages in PPC
The principle of production planning and control lies in the
statement ‘First Plan Your Work and then Work on Your
Plan.’ The stages in PPC are as follows
Production Planning and Controlling

Dispatching

I) Production Planning Functions:-

a) The first important step in production planning and control is
concerned with the careful preparation of production plans.
Production plans determine what will be produced and where, at
what type, by whom, and how. For detailed planning of
operations, the relevant information may be obtained from
several sources in the enterprise. Information about quantity and
quality of products to be manufactured may be obtained from
customers orders and the sales budget, and information about
production facilities may be obtained from the management and
the engineering department. Thus, the planning function
formulates production plans, and translates them into
requirements for men, machinery and materials.
b) Routing Routing means, determination of path or route on
which manufacturing operations will travel, establishing the
sequence of operations to be followed in manufacturing a
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particular product. This route path is determined in advance.
Routing information is provided by product or process
engineering function and it is useful to prepare machine loading
charts and schedules. “Routing includes the planning of where
and by whom work shall be done, the determination of the path
that work shall follow, and the necessary sequence of operations”.
To find this path, emphasis is placed on determining operating
data, which usually includes planning of ‘where’ and ‘by whom’
work should be done, the determinations of the path that work
shall follow, and the necessary sequence of operations. These
operating data are contained in the standard process sheet which
helps in making out a routing in the standard process sheet which
helps in making out a routing chart showing the sequence of
operations and the machines to be used. If the machine loan chart
indicates the non-availability of certain machines, alternate
routing may also be included on the routing chart. The most
efficient routing may have to be compromised with the availability
of the machines at a particular time. In other words, “routing
establishes the operations, their path and sequence, and the
proper class of machines and personnel required for these
operations.”From the above, it can be inferred that routing is one
of the highly essential elements and prime considerations of
production control because many production control functions are
closely related processes and are dependent on routing functions.
Thus, it is essential to solve the different problems concerning:
appropriate personnel; full utilization of machines; and
determining with precise degree the time required in the
production process.

c) Scheduling Scheduling involves fixing priorities for each job

and determines the starting time and finishing time for each
operation, the starting dates and finishing dates for each part, sub
assembly and final assembly. Scheduling lays down a time table
for production, indicating the total time required for the
manufacture of a product and also the time required for carrying
out the operation for each part on each machine or equipment.
Scheduling is planning the time element of production – i.e. prior
determination of “when work is to be done”. It consists of the
starting and completion times for the various operations to be
performed. In other words, scheduling function determines when
an operation is to be performed, or when work is to be completed,
the difference lies in the details of the scheduling procedure. To
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work out effectively, the scheduling, as a part of production
control function, determines the time when each operation called
for on the route sheet is to be done on the specified machine in
order to meet the desired delivery dates. Good control function
directs not only the time that each particular operation should
start but also indicates the progress of each manufacturing part,
the amount of work ahead of each machine, and the availability of
each machine for the assignment of new work.

Schedules are of two types: Master schedule and Detailed

schedule. Activities, if recorded on plant-wise basis, would be
preparing master schedule, while mere detailed schedules are
employed to plan the manufacturing and assembly operations
required for each product.

d) Loading Facility loading means loading of facility or work

center and deciding which jobs to be assigned to which work
center or machine. Loading is the process of converting
operation schedules into practice. Loading ensures maximum
possible utilization of productive facilities and avoids bottleneck
in production.
II) Production Control
Production planning cannot be properly achieved without
an effective production control. It refers to ensuring that
all which occurs is in accordance with the rules established
and instructions issued. After the execution or
dispatching of planned action, the actual is compared
with the standards set. If any deviations are found
corrective actions are taken in this stage. Production
control involves the following steps.
a) Dispatching The functions of routing and scheduling as
discussed above are paper work only. No actual production has yet
been started. Dispatching is the part of production control that
translates the paper work into actual production in accordance
with the details worked out under routing and scheduling
functions. Dispatching deals with setting the production activities
in motion through the release of orders and instructions in
accordance with the previously planned timings as embodied in
production schedules. Thus, dispatching implies the issuance or
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work orders. These work orders represent authority to produce.
These orders contain the following information:

 The name of the product;

 The name of the part to be produced, sub-assembly or final
assembly;
 The order number;
 The quantity to be produced;
 Descriptions and numbers of the operations required and their
sequence,
 The departments involved in each operation
 The tools required for particular operation; and
 Machines involved in each operation and starting dates for the
operations.

b) Expediting/ Follow-up/ Progressing Expediting or progressing

ensures that, the work is carried out as per the plan and delivery
schedules are met. Expediting includes activities such as status
reporting, attending to bottlenecks or holdups in production
removing the same, controlling variations or deviations from
planned performance levels, following up and monitoring progress
of work through all stages of production, coordinating with
purchase, stores, tool room and maintenance departments and
modifying the production plans and re-plan if necessary. The main
idea behind expedition is to see that promise is backed up by
performance”. It includes the following functions:

1. Check-up to ensure that all materials, tools, component parts, and

accessories are available at all work centers in specified quantities
for starting and carrying out manufacturing operations.
2. Check-up on the status of work-in-progress and completed work at
various work stations. This includes collecting information
relating to the starting and completion time and date of work
completed, status of work-in-progress relative to scheduled
completion dates, position of movements of materials, component
parts, and sub-assemblies within the plant, and inspection results.
3. Preparation of progress records and keeping the control boards
up-to-date.
4. Reporting to manufacturing management on all significant
deviations so that corrective action may be taken. It also includes
reporting to production planning department so that future plans
may be adjusted.
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c) Inspection Inspection is the process of examining an object for
identification or checking it for verification of quality and quantity
in any of its characteristics. It is an important tool for ascertain
and controlling the quality of a product. Inspection is an appraisal
activity that compares goods or services to a standard.
d)Corrective action: It is the keystone of any
production planning and control activity. Corrective action
involves any activities for

 adjusting the route

 rescheduling of work
 changing the workloads
 repairs and maintenance of machinery or equipment
 control over inventories
 poor performance of the employees that cause
deviations.
It provides a feedback mechanism on a long term basis so
that past experience can be used to improve methods,
facilities and resources in future period.

Measurement of Effectiveness
In a study of benefits and costs of production planning and
control systems, list of the following performance criteria
can form a base on which production planning and control
systems might be judged:
1. Inventory turnover
2. Delivery lead time
3. Percentage of time in meeting delivery promises
4. Percentage of orders requiring “splits” because of
unavailable material.
5. Number of expeditors.
6. Average unit cost.
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MODEL QUESTIONS
SECTION A
I Fill in the blanks
1. ________ determines, acquires and make all
arrangements for all the facilities necessary for future
operation.
2. ________ refers to implementation of production plan.
3. PPC is based on the adage principle of
4. ________ is essential for efficient and economical period
or required level of output.
5. Preparation of machine utilisation schedule is called
.
6. An effective PPC can bring about .
II Choose the correct answer
7. Reporting back from shop floor about the progress of
job on its completion is known as
1. Organising phase 2. Directing phase
3. Control phase 4. Planning phase

8. Which of the following is not an advantage of PPC

1. Reduce idle time 2. Good public image
3. Better work management 4. Sound organization structure
9. takes place immediately before production
starts.
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1. Planning 2. Pre-planning 3. Organising

4. Control
10. ________ consists of fixing flow lines for raw materials, components etc.
1. Loading 2. Routing
3. Dispatching 4. Scheduling
11. is followed by operator schedule.
1. Production schedule 2. Operation schedule
3. Master schedule 4. Manufacturing schedule
12. Machine break down causing interruption in production schedule can be rectified
in ________ stage.
1. Scheduling 2. Expediting,
3. Corrective action 4. Loading
III State whether true or false
13. Organising factors of production is done at pre planning stage
14. Production control means working out your plans.
15. Loading gives importance to time element of job.
16. Scheduling is the green light given to start production.
17. Inventory turnover can be one of the factors for measuring effectiveness of PPC.
SECTION B
18. Define production planning and control.
19. How will you measure the effectiveness of PPC?
20. What do you mean by scheduling?
21. What is dispatching?
22. What is expediting?
SECTION C
23. What are the objectives of production planning?
24. What are the objectives of production control?
25. What are the objectives of PPC?
26. What the different types of PPC?
27. What are the advantages of PPC?
28. Write short note on loading and routing.
29. What are the different types of schedules?
SECTION D
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30. Explain the stages of PPC.

Answers
1. Production planning 2. Production control 3. Plan your work and work your plan 4.
PPC 5. Machine loading 6. Cost control 7. Control phase 8. Sound organization
structure 9. Planning 10. Routing 11. Master schedule 12.Expediting stage 13.
False 14. True 15. False 16. False 17. True