Operation

Management
Chapter 7
Planning and Control in Operation
Management

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What is planning and control?

Planning and control is concerned with the activities that attempt to

reconcile the demands of the market and the ability of the operation’s
resources to deliver.

Planning and controlling are inter-related to each other. Planning sets

the goals for the organization and controlling ensures their
accomplishment.

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What is planning and control?
Planning and control involve
scheduling, co-ordinating
and organizing operations
activities.
Planning decides the control
process and controlling
provides sound basis for
planning. In reality, planning
and controlling are both
dependent on each other.
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Planning vs Controlling

Planning is a formalization of what is intended to happen at some time in the future.

A plan is a course of actions which need to be done in order to achive pre-set goals.

Plan is made based on forecasting and expectations. But the environments change
thus plan can not guarantee goals achievement.

Controlling is activities ensuring that goals can be achieved by monitoring changes of

environment and implementing necessary actions to keep everything in the right way.

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 • Operations which produce a high variety of services or
products in relatively low volume will have customers with
different requirements and use different processes from
The volume– operations which create standardized services or products in
high volume.
variety
effect on
planning and
control

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How do supply and demand affect planning

and control

Uncertainty in supply and demand:

• Uncertainty makes it more difficult for planning and control.

• Planning and control systems should be able to cope with uncertainty in demand.

Dependent and independent demand:

• Dependent demand: Some operations can predict demand with relative certainty because
demand for their services or products is dependent upon some other factor which is known well.
• Independent demand: future demand is supplied without knowing exactly what that demand will
be; or in the terminology of planning and control, they do not have firm ‘forward visibility’ of
customer orders.

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Responding to demand
• Demand can be responded in various ways depending
on types of products or services.

• The planning and control activity will vary depending

on how much work is done before demand is known.

• The process of planning and controlling can start as

soon as the customers confirm the contract with the
company or before that.

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 P: throughput time
D: the amount of time from
ordering to receiving

Responding
to demand
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• P : D ratio contrasts the total length of time customers have

to wait between asking for the service or product and
receiving it, called the demand time, D , and the total
throughput time from start to finish, P.
• Throughput time is how long the operation takes to design
the service or product (if it is customized), obtain the
resources, create and deliver it.
P : D ratios • The larger the P : D ratio the more speculative the
operation’s planning and control activities will be.
• By reducing their P : D ratio, operations reduce their
degree of speculative activity and also reduce their
dependence on forecasting (although bad forecasting will
lead to other problems).

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P and D
times
depend on
the
operation

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What are the
activities of planning
and control?
• Planning and control
activities include loading,
sequencing, scheduling, and
monitoring and control.

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Loading

Loading is the amount of work that is allocated to a work centre.

The valuable operating time available for productive working, even in the
best operations, can be significantly below the maximum time available
because of many reasons.

For any given level of demand a planning and control system should be
able to indicate the implications for the loading on any part of the
operation.
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Finite and infinite loading

Finite loading is an approach which only allocates work to a work centre (a person, a
machine, or perhaps a group of people or machines) up to a set limit. This limit is the
estimate of capacity for the work centre (based on the times available for loading).

Infinite loading is an approach to loading work which does not limit accepting work, but
instead tries to cope with it.

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Finite and infinite loading

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 • When work arrives, decisions must be taken
on the order in which the work will be
tackled. This activity is termed ‘sequencing’.
The priorities given to work in an operation
are often determined by some predefined
set of rules:
Sequencing • Physical constraints
• Customer priority
• Due date (DD)
• Last in first out (LIFO)
• First in first out (FIFO)
• Longest operation time (LOT)
• Shortest operation time first (SOT)

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 • Steve Smith is a website designer in a business
school. Returning from his annual vacation, five
design jobs are given to him upon arrival at work
(he finished all outstanding jobs before he left).
He gives them the codes A to E. Steve has to
decide in which sequence to undertake the jobs.
Example: He wants both to minimize the average time the
jobs are tied up in his office and, if possible, to
meet the deadlines (delivery times) allocated to
each job.

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Example:
Scheduling

Some operations require a detailed timetable showing at what time or

date jobs should start and when they should end – this is scheduling.

Schedules of work are used in operations where some planning is

required to ensure that customer demand is met.

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 • Supposed a coffee shop opens from 8:00am
- 10:00pm
• Peak hours: 10:00am - 1:00pm; 6:00pm-
9:00pm.
• Normally: 100 customers/ hour
Exercise: • Peak hour: 150 customers/ hour
• 1 staff can serve 25 customers/hour.

• How many staff do we need for 1 day? Make

a working schedule for waiting staff.

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 • Forward scheduling involves starting work as soon as it
Forward and arrives.
backward • Backward scheduling involves starting jobs at the last
possible moment to prevent them from being late.
scheduling

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Gantt charts

• Gantt chart is a simple device

which represents time as a bar, or
channel, on a chart. The start and
finish times for activities can be
indicated on the chart and
sometimes the actual progress of
the job is also indicated.

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 • Where the dominant resource in an operation is its
staff, then the schedule of work times effectively
determines the capacity of the operation itself.
Scheduling work
patterns • The main task of scheduling is to make sure that
sufficient numbers of people are working at any
point in time to provide a capacity appropriate for
the level of demand at that point in time. This is
often called staff rostering.

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Scheduling
work
patterns
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Requirements for scheduling work

• Capacity matches demand;

• The length of each shift is neither excessively long nor too short to be attractive to staff;
• Working at unsocial hours is minimized;
• Days off match agreed staff conditions – in this example, staff prefer two consecutive days
off every week;
• Vacation and other ‘time-off’ blocks are accommodated;
• Sufficient flexibility is built into the schedule to cover for unexpected changes in supply
(staff illness) and demand (surge in customer calls).

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Monitoring and controlling the operation

Each part of the operation has to be monitored to ensure that planned activities are
indeed happening. Any deviation from the plans can then be rectified through some kind
of intervention in the operation, which itself will probably involve some re-planning

Controlling methods:

Push and pull control Drum, buffer, rope

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 Push and
pull control

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 Drum, buffer, rope

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 Thank you!

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