4.

6 (Aggregate Planning and Production Planning)

Production Planning and Control (PPC)

Planning includes the consideration of all inputs variable so that the pre determined output goal can be
achieved. On the other hand, control means to take a remedial action to prevent the variation of actual output
from the desired one.

Benefit of Production Planning and Control

 Higher quality
 Better utilization of resource
 Reduced inventory
 Reduced manufacturing cycle time
 Faster delivery
 Better customer services
 Lower production cost
 Lower capital investment
 Higher customer services
 Improve sales turnover
 Improve profitability
 Flexibility
 Dependability

Functions of Production Planning

 Production selection and design

 Process selection and planning
 Facility layout
 Facility location
 Capacity planning
 Estimating
 Routing
 Scheduling
 Loading
Elements of Production control

 Inventory control
 Time management
 Quality control
 Maintenance and replacement
 Cost reduction and cost control
 Expediting / follow up / progressing
 Control of information
 Control of due dates
 Control of material handling
 Control of activities
 Control of manufacturing capacity

Scope of Production Planning and Control

 Aggregate planning
 Master Production Scheduling (MPS)
 Materials
 Methods
 Machine and equipment
 Manpower
 Routing – Determining the flow of work material handling in the plant and sequence of operation or
processing steps.
 Estimating - Establishing operation times leading to fixation of performance standard both for worker
and machine.
 Loading – machine loading is allocation of job to machine in conjunction with routing.
 Scheduling – it provide a time table of manufacturing activities.
 Dispatching – dispatching is release order and instruction for the starting of production in accordance
with the route sheet and schedule chart.
 Expediting – it means chasing, follow up or progressing which is done after dispatching function.
 Inspection – this function is related to maintenance of quality in production and of evaluating the
efficiency of the process.
 Evaluating – the objective of evaluation is to improve performance.
 Cost control – manufacturing cost is controlling by wastage reduction, value analysis, inventory control
Factors determent Production Planning Procedures

 Volume of production
 Nature of production processes
 Natures of operations

Level of Production Planning

(i) Strategic Planning – A process of thinking through the organization current mission and environment and
setting forth a guide for future decisions and results. Strategic planning is done by top management to develop
long term plans.

(ii)Tactical planning – Planning over a medium ranges time horizon by middle level management.

(iii)Operation Planning – It is done over a short – time span by the junior level management mainly concerned
with the utilization of facilities.

Aggregate Planning

Aggregate planning may be defined as “Intermediate Planning” which is normally done for a period of up to
one year time. The word “Aggregate” symbolizes that the planning is done at the broadest level.

Objective of Aggregate Planning

 To make use of the available facilities and resources to ensure their optimum use.
 Aggregate Planning increase the range of alternatives for capacity use through various techniques.
 More time is devoted to provide to produce more from the same machinery capacity through properly
employing the sequencing and scheduling technique.

Various strategy involved in Aggregate Planning

Aggregate planning is not long term planning. The objective of the various strategies of Aggregate planning is
to smooth out the peaks and voltage of demand during the planning horizon. This is achieved through action
briefed below.

 Without changing production output rate

 Varying production output rate
 Appropriate inventory level
 Subcontracting
 Capacity utilization