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Department of Mechanical Engineering

IV B. Tech II Semester
PRODUCTION PLANNING AND CONTROL
Unit - 1
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Unit 1
Day 1
Topics to be covered: Introduction to Production, Introduction to Production
Planning and Control
Production is the process by which goods and services are created. Production
systems combine materials, labors, and capital resources in an organized way
with the objective of producing some goods or service. Production system
may occur in factories, banks, stores, hospitals etc. It is a
Combination,of manufacturing technology, engineering sciences,with manage
ment science. A production engineer typically has a wide knowledge
of engineering practices and is aware of the management challenges related
to production. The goal is to accomplish the production process in the
smoothest, most-judicious and most-economic way.
Aspects of production:
1. Predict and analyze the demand. Select among scientific and technological
appropriate knowledge in order to design, redesign or improve
product/service functionality;
2. Incorporate concepts and quality techniques along all the productive
system. Deploy organizational standards for control proceedings and
auditing;
3. Stay up-to-date with technological developments, enabling them to
enterprises and society;
4. Understand the relation between production systems and the
environment. This relates to the use of scarce resources, production
rejects and sustainability;
5. Manage and optimize flow (information and production flow).
Planning: Planning is exercise of intelligent anticipation in order to establish
how an objective can be achieved, or a need fulfilled, in circumstances which
are invariable restrictive. Production planning is the planning of production
and manufacturing modules in a company or industry. It utilizes the resource
allocation of activities of employees, materials and production capacity, in
order to serve different customers.
Modern production planning methods and tools have been developed since
late 19th century. Under Scientific Management, the work for each man or
each machine is mapped out in advance (see image). The origin of production
planning back goes another century. Kaplan (1986) summarized that "the
demand for information for internal planning and control apparently arose in
the first half of the 19th century when firms, such as textile mills and
railroads, had to devise internal administrative procedures to coordinate the
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multiple processes involved in the performance of the basic activity (the
conversion of raw materials into finished goods by textile mills, the
transportation of passengers and freight by the railroads.
In 1923 Industrial Management cited a Mr. Owens who had observed:
"Production planning is rapidly becoming one of the most vital necessities of
management. It is true that every establishment, no matter how large or how
small has production planning in some form; but a large percentage of these
do not have planning that makes for an even flow of material, and a minimum
amount of money tied up in inventories."
PRODUCTION CONTROL: The principles of control are the same for
production control, quality control, budgetary control, cost control and other
managerial controls. The basic cycles of events in the control are Action,
Feedback, Evaluation and Adjustment. Since these events are dynamically in
continuous they take the form of a closed-loop circuit. There are seven
essential steps in the establishment and application of operating controls.
These steps will be discussed in their normal sequence.
Production control is the activity of monitoring and controlling a large physical
facility or physically dispersed service. It is a "set of actions and decision taken
during production to regulate output and obtain reasonable assurance that
the specification will be met." The American Production and Inventory Control
Society, nowadays APICS, defined production control in 1959 as:
“Production control is the task of predicting, planning and scheduling
work, taking into account manpower, materials availability and other
capacity restrictions, and cost so as to achieve proper quality and
quantity at the time it is needed and then following up the schedule to
see that the plan is carried out, using whatever systems have proven
satisfactory for the purpose.”
Production control is just one of multiple types of control in organizations.
Most commons other types are:
 Management control, one of the managerial functions like planning,
organizing, staffing and directing. It is an important function because it
helps to check the errors and to take the corrective action so that deviation
from standards are minimized and stated goals of the organization are
achieved in a desired manner.
 Inventory control, the supervision of supply, storage and accessibility of
items in order to ensure an adequate supply without excessive oversupply.
 Quality control, the process by which entities review the quality of all
factors involved in production.

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Fig 1.1 Role of production Planning and control

Important and previous JNTUK examination questions:
1) Describe the role of production planning and control. (R-13, Set-1,
July/Augst-2017) 8m.
Day 2
Topics to be covered: The Functions of PPC
The highest efficiency in production is obtained by manufacturing the
required quantity of product of required quality, at the required time by best
and cheapest method. To certain this objective management employs PPC
tool which coordinates all manufacturing activities. The main functions of PPC
are the coordination of all the activities, which exist during production or
manufacturing.
(I) Materials: Raw material, standard finished parts, finished parts of
products must be available while starting the operation within the time.
(II) Methods: The purpose of this function is to analyze all methods of
manufacture and select the best method according to the given set of
circumstances and facilities. It determines the sequence of operations
and the division of product into the assemblies and sub-assemblies,
modified by the limitation of existing layout and work flow.
(III) Machines and Equipments: Methods of manufacturing have to be
related to the available production facilities coupled with a detail study
of equipment replacement policy. Maintenance policy, procedure and
schedules are also functions connected with managerial responsibilities

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for equipment. Design of economy of jigs and fixtures constitutes some
of major duties of PPC.
(IV) Routing: Production Planning and Control “The specification of the flow
of sequence of operation and processes to be followed in producing a
particular manufacturing a lot is routing”. Routing determines that work
will be done on the product of parts as well as where and how it will be
done. It estimates the operations, their path, sequence proper class of
machines and personnel required for these operations. An analysis of
the article does determine what to make and what to purchase.
Decision as whether to fabricate a component or purchase it from
elsewhere. These are based on relative cost, technical consideration
purchasing policies, availability of equipment, personnel, skill. An
analysis of article to determine what material is needed. It depends
upon the drawing, specifications, standard of quality, identification
symbol, and application in product. A determination of manufacturing
operation and the sequence. This section establishes the operation
necessary to manufacture the proper sequence on route sheet and
operation sheet.
(V) Estimating: Production Planning And Control When production orders
and detailed operation sheet available with specification feeds, speed
and use of auxiliary attachments and method, the operation time can be
worked out. It may be consequently results in wide scatter of operation
times and unduly large fluctuation and perhaps instabilities in time
schedules.

Fig 1.2 Models of Routing and Scheduling

Important and previous JNTUK examination questions:
1) Describe the functions of production planning and control. (R-13, Set-1,
April/May-2017) 8m.
2) Describe the functions of production planning and control in detail. (R-
13, Set-1, July/August -2017) 8m.

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Day 3
Topics to be covered: Loading and scheduling
Loading &Scheduling: Machines have to be loaded according to their
capabilities performance the given and according to the capacity. Machine
loading is carried out in connection with routing to ensure smooth work flow
work estimating, to ensure that the prescribed methods feeds and speed are
best utilized. Careful analysis of process capacities so that flow rates along
the various production lines can be suitable coordinated. The distinction
between planning and scheduling is largely semantically and based upon
difference in detail and time period.
Scheduling is the process of arranging, controlling and optimizing work and
workloads in a production process. Companies use backward and forward
scheduling to allocate plant and machinery resources, plan human resources,
plan production processes and purchase materials.
 Forward scheduling is planning the tasks from the date resources become
available to determine the shipping date or the due date.
 Backward scheduling is planning the tasks from the due date or required-
by date to determine the start date and/or any changes in capacity
required.
The benefits of production scheduling include:
 Process change-over reduction
 Inventory reduction, leveling
 Reduced scheduling effort
 Increased production efficiency
 Labor load leveling
 Accurate delivery date quotes
 Real time information
Production scheduling tools greatly outperform older manual scheduling
methods. These provide the production scheduler with powerful graphical
interfaces which can be used to visually optimize real-time work loads in
various stages of production, and pattern recognition allows the software
to automatically create scheduling opportunities which might not be apparent
without this view into the data. For example, an airline might wish to
minimize the number of airport gates required for its aircraft, in order to
reduce costs, and scheduling software can allow the planners to see how this
can be done, by analyzing time tables, aircraft usage, or the flow of
passengers.

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Dispatching: It is important mechanism of production control. Meaning of this
term is sending to destination or starting something on way. When applied to
production control, it means the assignment of work to different machines or
work places which involve insurance of order and production form in order of
their priority as determined by scheduling. In dispatching translated into
reality or physical work which has been planned scheduling.
Expediting: Follow up which regulates the progress of materials and parts
through the production process. This closely inter elated with activities of
dispatcher to whom is delegated scheduling responsibility. 16 Production
Planning And Control Follow up is that novel tool which acts as a regulator of
material and components parts when they are traveling on the path of
performance as laid down by sheets and schedule charts. It serves as a
catalytic agent to fuse the various separate an unrelated production activities
into the unified whole that means progress.
Inspection: Another major control is inspection. Its finding land criticism are
of the importance both in execution of current program and both in planning
stage of fibre undertaking when the limitations of the processor, method and
manpower are known. These limitations canform a basis for future
investigations in evaluating the showed improving production. Inspection in
manufacturing includes measuring, examining, testing, or gauging one or
more characteristics of a product or process and comparing the results with
specified requirements to determine whether is the requirements are met for
each characteristic.[3][4] Common examples of inspection by measurement
or gauging include using a caliper or micrometer to determine if a dimension
of a manufactured part is within the dimensional tolerance specified in a
drawing for that part, and is thus acceptable for use.
Evaluating: Perhaps the most neglected, but on an essential link between
control and forwarding is that of evaluating. The essential task of dispatching
and evaluating are concerned with the immediate issue of production and
with measures that will be as certain fulfillment target. Valuable information
is gathered limited in nature and unless provision is made so that all the
accumulated information can be properly digested and analyzed data may be
irretrievable lost. Thus here the evaluating function comes in to provide a
feedback mechanism on the longer term basis so that the past experience can
be evaluated with the view to improving utilization of method and facilities.
Homework:
1) Action, Feedback, Evaluation and Adjustment are the basic cycle of
events in_________.
2) Materials, Methods and Machine equipments are functions of________.
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Important and previous JNTUK examination questions:
1) What are the functions of PPC? Explain in detail. (Set-2, Feb-201) 8m
2) Describe the activities in follow up or control phase of PPC. R-13, set -2,
April/ May -2017} M8.
3) Describe production scheduling.{R-13,set -3, April/ May -2017}M4.
4) Define Production and Control.{R-13,set -3, July/ August -2017}
Day 4
Topics to be covered: Objectives of PPC, Advantages of PPC
Q1. What are the objectives of PPC?
1) To determine capacity of all manufacturing departments and to plan
systematically coordinated and related production activities within the
scope of the enterprise to meet sales requirements.
2) To translate orders received from sales department into orders on the
works department and to ensure steady plans of production activities.
3) To find ways and means through which product manufacturing
requirements such as materials and their necessary constituents such
may be available in right quality and quantity at the right time.
4) To coordinate a number of different department groups so that a fine
balances of activities may be maintained.
5) To promote fuller utilization of plants.
6) To assist labor towards right and greater earnings.
7) To train staff in the effective performance of their duties.
Q2. What are the advantages of PPC?
1) Production management aspect.
Production control
It facilitates in receipts, shipment and delivery
It helps in production time predictable
It helps in setting up production centers
It reduces the number of parts and their cost and helps mismatched
part
Reduces the number of stock chasers
Reduces the production control expenses
Minimizing the wastes, scrap and rework
Minimizing the rectification hours
Cost of inspection is reduced
Reduction of variations in manufactured goods
Decreased tool replacement cost
Decreased maintenance cost
Reduced raw material wastage
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Reducing setup time
Reduced number of operations
Reduced number of handling
Reduced labor waiting time.
Important and previous JNTUK examination questions:
1) What are the objectives of PPC? (R-13, Set-4, April/May 2017) 4M.
2) State the advantages of better production planning and control. (R-13,
Set-4, April/May 2017) 8M.
Day 5
Topics to be covered: Product design
Q2. What is meant by Product design and list out the factors?
Ans: Product design is a strategic decision as the image and profit earning
capacity of a small firm depends largely on product design. Once the product
to be produced is decided by the entrepreneur the next step is to prepare its
design. Product design consists of form and function. The form designing
includes decisions regarding its shape, size, color and appearance of the
product. The functional design involves the working conditions of the product.
Once a product is designed, it prevails for a long time therefore various
factors are to be considered before designing it. Product design process: the
set of strategic and tactical activities, from idea generation to
commercialization, used to create a product design. In a systematic approach,
product designers conceptualize and evaluate ideas, turning them into
tangible inventions and products. The product designer's role is to combine
art, science, and technology to create new products that people can use.
Their evolving role has been facilitated by digital tools that now allow
designers to communicate, visualize, analyze and actually produce tangible
ideas in a way that would have taken greater manpower in the past. These
factors are listed below: -
a) Standardization b) Reliability c) Maintainability
d) Servicing e) Reproducibility f) Sustainability
g) Product simplification h) Quality Commensuration with cost
i) Product value j) Consumer quality
k) Needs and tastes of consumers.
Above all, the product design should be dictated by the market demand. It is
an important decision and therefore the entrepreneur should pay due effort,
time, energy and attention in order to get the best results.
Homework:
1) The image and profit earning capacity of a small firm depends largely on
________.
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2) Same type of product is manufactured to meet the continuous demand
of the product is known as ________.
Important and previous JNTUK examination questions:
1) What is product design? {R-10, Set-1, Nov-2011} 4m
Day 6
Topics to be covered: Characteristics of product design
Product design process: the set of strategic and tactical activities, from idea
generation to commercialization, used to create a product design. In a
systematic approach, product designers conceptualize and evaluate ideas,
turning them into tangible inventions and products. The product designer's
role is to combine art, science, and technology to create new products that
people can use. Their evolving role has been facilitated by digital tools that
now allow designers to communicate, visualize, analyze and actually produce
tangible ideas in a way that would have taken greater manpower in the past.
Analysis:
 Accept Situation: Here, the designers decide on committing to the project
and finding a solution to the problem. They pool their resources into
figuring out how to solve the task most efficiently.
 Analyze: In this stage, everyone in the team begins research. They gather
general and specific materials which will help to figure out how their
problem might be solved. This can range from statistics, questionnaires,
and articles, among many other sources.
Concept:
 Define: This is where the key issue of the matter is defined. The conditions
of the problem become objectives, and restraints on the situation become
the parameters within which the new design must be constructed. [6]
Synthesis:
 Ideate: The designers here brainstorm different ideas, solutions for their
design problem. The ideal brainstorming session does not involve any bias
or judgment, but instead builds on original ideas.
 Select: By now, the designers have narrowed down their ideas to a select
few, which can be guaranteed successes and from there they can outline
their plan to make the product.
 Implement: This is where the prototypes are built, the plan outlined in the
previous step is realized and the product starts to become an actual object.
 Evaluate: In the last stage, the product is tested, and from there,
improvements are made. Although this is the last stage, it does not mean
that the process is over. The finished prototype may not work as well as
hoped so new ideas need to be brainstormed.
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Characteristics:
The mass or flow production possesses the following characteristics.
1) The units flow from one operation point to another throughout the
whole process.
2) There will be one type of machine for each process.
3) The products, tools, materials and methods are standardized.
4) Production is done in anticipation of demand.
5) Production volume is usually high.
6) Machine set ups remain unchanged for a considerable long period.
7) Any fault in flow of production is immediately corrected otherwise it will
stop the whole production process.

Fig 1.3 Product development process

Important and previous JNTUK examination questions:
1) Explain briefly the new product development process. {R-07, Set-1, Nov-
2011} 8m.
Day 7
Topics to be covered: Production systems.
Q1. Explain the types of Production system.
TYPES OF PRODUCTION SYSTEM: Broadly one can think of three types of
production systems which are mentioned here under: a) Continuous
production (b) Job or unit production c) Intermittent production
a) Continuous production: - It refers to the production of standardized
products with a standard set of process and operation sequence in
anticipation of demand. It is also known as mass flow production or assembly
line production. This system ensures less work in process inventory and high
product quality but involves large investment in machinery and equipment.
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The system is suitable in 117plants involving large volume and small variety of
output e.g. oil refineries reform cement manufacturing etc.
b) Job or Unit production: - It involves production as per customer's
specification each batch or order consists of a small lot of identical products
and is different from other batches. The system requires comparatively
smaller investment in machines and equipment. It is flexible and can be
adapted to changes in product design and order size without much
inconvenience. This system is most suitable where heterogeneous products
are produced against specific orders.
c) Intermittent Production: Under this system the goods are produced partly
for inventory and partly for customer's orders. E.g. components are made for
inventory but they are combined differently for different customers. .
Automobile plants, printing presses, electrical goods plant are examples of
this type of manufacturing.
Q2. Elaborate the Job production system.
The final decision regarding any particular method of production is very
much affected by the nature of the products and the quantity to be produced.
Production methods may be broadly classified as Job Production, Batch
production and Mass or Flow Production. It, sometimes called jobbing or one-
off production, involves producing custom work, such as a one-off product for
a specific customer or a small batch of work in quantities usually less than
those of mass-market products. Together with batch production and mass
production (flow production) it is one of the three main production methods
Job Production:
Under this method peculiar, special or non-standardized products are
produced in accordance with the orders received from the customers. As each
product is non- standardized varying in size and nature, it requires separate
job for production. The machines and equipment’s are adjusted in such a
manner so as to suit the requirement of a particular job.Job production
involves intermittent process as the work is carried as and when the order is
received. It consists of bringing together of material, parts and components in
order to assemble and commission a single piece of equipment or
product.Ship building, dam construction, bridge building, book printing are
some of the examples of job production. Third method of plant layout viz.,
Stationery Material Layout is suitable for job production.
Key benefits of job production include:
 can provide emergency parts or services, such as quickly making a machine
part that would take a long time to acquire otherwise

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 can provide parts or services for machinery or systems that are otherwise
not available, as when the original supplier no longer supports the product
or goes out of business (orphaned)
 work is generally of a high quality
 a high level of customization is possible to meet the customer's exact
requirements
 significant flexibility is possible, especially when compared to mass
production
 workers can be easily motivated due to the skilled nature of the work they
are performing
Disadvantages include:
 higher cost of production
 re-engineering: sometimes engineering drawings or an engineering
assessment, including calculations or specifications, needs to be made
before the work can be done
 requires the use of specialist labor (compared with the repetitive, low-
skilled jobs in mass production)
 slow compared to other methods (batch production and mass production)
Homework:
1) _________production refers to the production of standardized products
with a standard set of process.
2) _______system is most suitable where heterogeneous products are
produced against specific orders.
Important and previous JNTUK examination questions:
1) Explain about intermittent production. [Set-1, set4, Nov 10 8M]
2) Define the continuous production system. [Set 1 July/ August 2017, 3M].
3) What is batch production? Set no.2 R.13, April / May 2017, 3M}.
4) Explain about continuous production? (R05,set-3,nov-10)
5) Describe the functions of production planning and control in detail.
6) What is job order production?{Set no.1 R.13 April / May 2017, 3M}
7) What is internal organization of a department? Explain it briefly by
taking an example.{Set no.1 R.13 July / August 2017}
Day 8
Topics to be covered: Factors Affecting Production Planning and Control
Market Forecast – It will indicate future trends in demand for manufactured
products. Work shift policies, plans for an increase or decrease in
manufacturing activity are based upon the market forecast and in turn affect
the production planning and control.

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Sales Order – It is a rewrite of the customer order specifying what has been
purchased (product, quantity and authorizing shipment of the goods to the
customer). Variation or changes in sales order will drastically affect
production planning and control.
Standard Process Sheet – It is prepared by process engineering group or
process owner and it is the source of basic data which may include type of
machine to be used, time required for processing, etc. For e.g. if any machine
is under breakdown, the standard process sheet will be disturbed which in
turn affect production planning and control.
Load Charts – These charts are prepared for each workstation or machine in
the plant or may be for groups of machines or departments.
Project Planning Method – The product to be produced are manufactured in
quantities and their total processing time can be measured. The best known
methods are Critical Path Method (CPM) and Program Evaluation and Review
Technique (PERT).
Planning is the process of selecting and sequencing activities such that they
achieve one or more goals and satisfy a set of domain constraints. Schedules
should reflect the temporal relationships between activities and the capacity
limitations of a set of shared resources. Master Production Schedule is main
driver and information source for further material requirements planning and
accompanying calls or supplies and allows making detailed production
schedules for production system. The high re-planning frequency in order to
overcome the uncertainty induces the system nervousness. The system
nervousness can be defined as – State of a system when a minor changes in
Master Production Schedule creates significant changes in Materials
Requirement Planning (MRP).
The following critical points can be considered in Master Production Schedule:
 Frequent changes in MPS result in due-date changes in open orders,
quantity and timing for planned order of end products.
 Mentioned changes are translated into gross requirements changes for
products and timing of their delivery.
 Unexpected changes in MPS effect that materials, needed for a
particular order may not be available. The availability of materials is
often limited due to the fact that suppliers have similar bottlenecks and
schedules variations transmitted from sub-tier suppliers.
The following questions can be considered while scheduling MPS:
 How to make initial MPS that is as feasible as possible?
 How to limit the number of re-planning activities?
 How to be reactive to disturbances in materials flow?

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 How to provide planners with accurate information about material
resources available which often lead to bloated inventory and in
accurately promised delivery dates to the customers?
Important and previous JNTUK examination questions:
1) Write the factors affecting the production planning and control. {R-13,
Set-1, April/May2016} 8M
Day 9
Topics to be covered: Organization of Production planning & control-
organization of department
Activities in Production planning section includes:
1. Production budget office: In this office, incoming orders are recorded in
order book. Budget allocation is done to execute each order. In case the
customer gives a required date of delivery, the date is noted for further
action.
2. Material Requirement planning: No sooner the planning engineer receives
the product to be produced, the production planning department prepares
material requirement plan. Material can be applied either internally from
the store or ordered from outside.
3. Methods planning office: The responsibility of this office is to assess the
potentialities of available methods & to select the best method for
producing components.
4. Capacity planning office: This office checks the status of each of the facility
& allocates them as per requirement of jobs.
5. Tool & jig design office: The planner tries to provide simple & cost effective
tools & jigs for performing the operation. The selection of suitable tool &
jig is advised by industrial engineers.
6. Operation layout & routing office: The responsibility of this office is to
prepare several forms & documents so that the production people can
work with ease.
7. Scheduling office: The planner is accepted to prepare a time table of
machine allocation for different jobs. Individual capacity of the machine
indicates to the planner that with the existing number of machines how
much work can be cleared & time taken to complete the work.
Internal organization of department
The Department for Internal Organization is responsible for the management
and coordination of the entire administration and is involved in all
fundamental issues. It is subdivided into the subject areas of Main
administration, schools and sports, EDP and Real Estate Office.

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Additionally, the institutions of the archive and the town museum, the public
library, the adult education center (VHS), the Käthe Zang music school and the
Freizeitheim are part of the Department for Internal Organization.
The main ways of structuring an departments are by:
1. Function 2. Product 3. Process 4. Geographical area 5. Type of customer
1) By function: This is the most common way of grouping employees,
particularly in manufacturing companies. Functional organization meant
that a company is divided into broad sectors each with its own particular
specialism or function, for example, marketing, accounts or human
resources. Every company will have its own way of structuring its functions.
Traditionally, functional organization is hierarchical, with some form of line
management, e.g. in a factory:
2) By product: When a large organization produces a range of different
products, it might find it convenient to create an organizational structure
based on product lines. For example, a firm in the publishing industry
might have a newspaper division, a magazine and periodicals division and a
book publishing division. Each division will then contain a mixture of all the
specialist ingredients required to enable it to work independently. A great
advantage of this form of structure is that divisions can concentrate on
their own market areas. It also becomes possible to assess the profitability
and effectiveness of each sector. At the same time it is still possible to
share expertise between divisions and to share combined services such as
a combined transport fleet. By identifying the various parts of a business
organization it becomes possible to cut out loss making divisions and to
amalgams divisions by merging them with similar divisions in other
companies.
3) Grouping by process: Where a product requires a series of processes,
departments will be set up to perform each process. To take the example
of the publishing company, within each of the divisions departments are
responsible for carrying out the various stages for example the editing of
copy, page layout and design, buying of print, etc. The illustration below
shows the way in which process departments might take the responsibility
for each stage:
The advantages of organizing on a process basis are that:
 it is possible to set up teams of similar minded specialists
it becomes easy to identify points in the production process at which
things go well or badly
 it is easy to introduce new technology at a given stage of production (i.e.
a given process).
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4. Grouping by geographical area: Many companies will have branches spread
throughout the country and sometimes overseas. Multiple retailing
companies are a good example. A company like Marks and Spencer will have
shops on most High Streets in the United Kingdom; groups of shops will be
organized into a regional division which will have overall supervision of such
features as training of staff and distribution policy. The illustration below
shows a company with five domestic divisions and two overseas divisions:
There are a number of advantages of organizing on a geographical basis:
 Setting up distinct regional divisions makes it possible to respond quickly to
local needs, issues and problems. The organization thus becomes more
sensitive to customers, employees and other groups. At the same time it
might be able to cut through a lot of red tape if the regional groups are
allowed to make their own decisions.
 Setting up national and regional divisions makes it possible to tailor the
operation of an organization to local conditions. Differences would include
those of language, law and custom. Local knowledge is best gained by
hiring local specialists.
5. Grouping by type of customer: Organizations will often set up different
structures to deal with different sets of customers. This is because they will
often give some groups more time and attention than others. An obvious
example would be in a hospital where casualty patients would require a
different type of attention to those requiring a routine X-ray.
In a department store the restaurant department will operate in a different
way and have different procedures to a department selling underwear. The
furniture department will need to set out a process of documentation and
make arrangements for delivery to customers which contrast with purchase
procedures for toys. In a bank, new customers opening accounts will be dealt
with separately from existing customers, etc.
Many businesses will have different procedures for dealing with large and
small customers. Separate departments might handle these accounts, using
different types of paperwork, offering different rates of discount, and treat
customers in different ways.
The advantages of organizing in a pattern based on having different sets of
customers are:
 Different types of customers can be dealt with by separate departments.
 Customers will be more inclined to deal with a business with
departments concentrating on their particular needs.
 It is easier to check on the performance of individual products.
A matrix structure
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Many organizations today employ what is known as a matrix structure where
individual employees may report to two or more line managers at the same
time. This is common when organizations are made up of teams, drawing on
individuals from a range of specialism. BIC is a good example, of an
organization employing a matrix structure - an individual employee may be
part of their French (geographical) division, and the razors manufacturing
division at the same time.
Distribution: Getting products from the point of production into the hands of
the end-user with the help of various transport modes, together with the
cooperation of wholesalers and retailers.
Matrix: A personnel structure based on 'teams' across specialist boundaries,
with upward reporting reduced to a minimum. Individuals take responsibility
for improving their own work and helping fellow team members improve the
quality of their work. The role of senior management is to guide and integrate
rather than direct.
The number of employees of small and middle sized food processing
industries typically ranges between 30 and 150 for the production floor.
Production mostly stops at nights and in weekends but sometimes production
also proceeds then. The organizational structure depends mostly on the
history and ownership of the firms. Most of these companies have an origin
as a family business that has grown throughout the years. This has
consequences for the way that such organizations are managed. Decisions in
firms that are owned by the managing director are usually taken in a more
centralized way than in firms that are a division of a large corporation. There
is a trend of concentration in the food processing industries, although not as
extreme as in retail. We will use the categorization that is described by Mint
berg (1979) to illustrate how food processing firms are mostly organized. Mint
berg distinguishes the strategic apex, the middle line, the techno structure,
the support staff, and the operating core. The strategic apex generally
consists of the board of directors, led by the managing director. Common
functions in the board of directors are a marketing manager, a financial or
accounting manager, and a plant or production manager. Depending on the
size and complexity of the firm, there could also be managers for research
and development, logistics, and other functional areas. Purchasing of critical
raw material that needs to be bought with long term contracts might also be
a task of the board of directors. The firms in this research are mostly too small
to have a separate middle management. Often, foremen or team managers
are the link between the strategic apex and the operating core. The operating
core deals with the primary process. Functional areas with respect to the flow
and transformation of goods are purchasing, warehousing, production, sales,
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and shipping. The support staff consists of functions such as legal counseling,
public relations, research and development, quality control, etc. Finally, the
techno structure’s purpose is to make the work of others more effective.
Here, apparent functions are strategic planning, training, maintenance,
process control, and production planning. Due to the size of many companies
in the food processing industries, employees often perform multiple functions
(e.g., there could be someone who performs research and development,
quality control, and process control), or functions are not performed at all
(e.g., training and legal counseling). Formal authority relations and
coordination of work are mostly organized by process and function. This
means that work is organized in a traditional hierarchical way. For example, in
production departments, there can be a straight hierarchy with operators that
function under the responsibility of a team leader, the team leader’s work
under a shift leader, and the shift leaders report to a production manager.
Figure given below depicts an example of an organizational structure in food
processing industries. Planning is often the link between marketing or sales
and production. Therefore, the placement in the hierarchy has an impact on
the power balance. The appropriate place of production planning in the
hierarchy is, both in organization theory and in practice, not clear. In most
cases, the planning department is positioned in one of four possible settings:
there is a planning department next to the production and sales departments;
the whole planning department falls under the production manager; the
whole planning department falls under the sales manager; or some people in
the planning department fall under the production manager and some people
fall under the responsibility of the sales manager.

Fig.1.4 Departmental structure in a food processing industries

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Important and previous JNTUK examination questions:
1) Explain organization structure of a manufacturing industry. [R13, set-1,
April/May 2017, 8M]
Web links:
https://www.youtube.com/watch?v=yYIVumq6sVM
https://www.youtube.com/watch?v=vEj--mKUO2Q
https://www.youtube.com/watch?v=b143Y7dTfIA
https://www.youtube.com/watch?v=XQB4tRAQxDU

Raghu Engineering College Dept. of MECH PPC Unit - 1