Production and Operations Management
 The process which combines and transforms
various resources used in the
production/operations subsystem of the
organization into value added
product/services in a controlled manner as
per the policies of the organization
 A process of planning, organizing,
directing, and controlling the activities of
the production function.
 E. S. Buffa defines it as it deals with
decision-making related to production
processes so that the resulting goods or
services are produced according to
specifications, in the amount and by the
schedule demanded and out of minimum
cost.
 18th Century – Adam Smith recognized the
economic benefit of specialization of labor
and recommended breaking of jobs down
into subtasks and recognizes workers in
specialized tasks.
 Frederick W. Taylor – Implemented
Smith’s theories and developed scientific
management.
 1930-1950 – The term “production
management” became popular.
Concept of Production
 Production is defined as “the step-by-step
conversion of one form of material into
another form through chemical or
mechanical process to create or enhance the
utility of the product of the user.”
 Edwood Buffa defines production as “a
process by which goods and services are
created.”
 Production is the process of gradually
transforming raw resources into a finished
product while increasing the product’s
usefulness for the end customer.
(Side Note: The capital is considered to be the
backbone of an organization.)
Production System
 In charge of making things.
 It entails the planned transformation of
resources within a specified system to
provide value.
Characteristics of a Production System
 Organized Activity with an Objective
 Transformation of Inputs to Useful Outputs
 Integration with Other Organizational
Systems
 Feedback for Control and Improvement
Job Shop Production
 Characterized by manufacturing of one or
few quantities of products designed and
produced as per the specification of
customers within prefixed time and cost.
Characteristics of Job Shop Production
 High variety of products and low volume.
 Use of general-purpose machines and
facilities.
 Lage inventory of materials, tools, parts.
 Detailed planning is essential for
sequencing the requirements f each product,
capacities for each work center and order
priorities.
Batch Production
 Defined by American Production and
Inventory Control Society (APICS) as “a
form of manufacturing in which the job
passes through the functional departments in
lots or batches and each lot may have a
different routing.
Characteristics of Batch Production
 When there are shorter production runs.
 When plant and machinery are flexible.
 When plant and machinery set up is used for
the production of item in a batch and change
of set up is required for processing the next
batch.
 When manufacturing lead time and cost are
lower as compared to job order production.
Mass Production
 Manufacture of discrete parts or assemblies
using a continuous process are called mass
production.
 This production system is justified by very
large volume of production.
Characteristics of Mass Production
 Standardization of product and process
sequence.
 Dedicated special purpose machines having
higher production capacities and output
rates,
 Large volume of products.
 Shorter cycle of production.
 Lower in process inventory.
 Perfectly balanced production lines.
 Flow of materials, components and parts is
continuous and without any back training,
 Production planning and control is easy.
 Material handling can be completely
automatic
Continuous Production
 Production facilities are arranged as per the
sequence of production operations from the
first operations to the finished product.
Characteristics of Continuous Production
 Dedicated plant and equipment with zero
flexibility.
 Material handling is fully automated.
  Process follows a predetermined sequence
of operations.
 Component materials cannot be readily
identified with final product.
 Planning and scheduling is a routine action.
Objectives of Production Management
 Right Quality – The quality of a product is
established based upon the customer’s
needs.
 Right Quantity – The manufacturing
organization should produce the products in
right number.
 Right Time – Timeliness of delivery is one
of the important parameters to judge the
effectiveness of production department.
 Right Manufacturing Cost – Established
before the product is actually manufactured.
Operating System
 Converts inputs to provide outputs which
are required by a customer.
 Everett E. Adam & Ronald J. Ebert
defines operating system as “an operating
system of an organization is the part of an
organization that produces the
organization’s physical goods and services.”
 Ray Wild defines operating system as, “An
operating system is a configuration of
resources combined for the provision of
goods or services.”
Concept of Operations
 An operation is defined in terms of the
mission it serves for the organization,
technology it employs and the human and
managerial processes it involves.
 Manufacturing operations involve a
conversion process that yields a tangible
output; a product,
Distinguishing Manufacturing and Service
Operations
 Tangible/Intangible Nature of Output
o Manufacturing Operations: Involve
the creation of tangible outputs,
such as physical products.
o Service Operations: Yield intangible
outputs, including deeds,
performances, and efforts.
 Consumption of Output
o Manufacturing Operations: tangible
products are typically consumed
over time by the end user.
o Service Operations: Intangible
services are often consumed
immediately during the service
encounter.
 Nature of Work (Job)
o Manufacturing Operations: Often
involve a standardized and
repetitive nature of work.
o Service Operations: Tend to be
more varied and can involve
customized or personalized
interactions.
 Degree of Customer Contact
o Manufacturing Operations:
Generally, have limited direct
contact with customers during the
production process.
o Service Operations: Often require
direct and frequent interactions with
customers.
 Customer Participation in Conversion
o Manufacturing Operations:
Customers are typically not directly
involved in the production process.
o Service Operations: Customer
participation is often integral to the
service delivery process.
 Measurement of Performance
o Manufacturing Operations:
Performance can be measure
through production metrics such as
efficiency, quality, and output
volume.
o Service Operations: Performance is
often measured through customer
satisfaction, service quality, and
responsiveness.
Operations Management
 Operations managers are concerned with
planning, organizing, and controlling the
activities which affect human behavior
through models.
Objectives of Operations Management
 Customer Service
o To provide adequate levels of
customer service (and hence
customer satisfaction) by providing
goods or services with the right
specification, at the right cost and at
the right time.
o “Right thing at a right price at a
right time.”
 Resource Utilization
o To achieve levels of resource
utilization (or productivity) e.g., to
achieve agreed levels of utilization
of materials, machine, and labor.
o Obtaining maximum effect from
resources or minimizing their loss,
underutilization or loss.
Module 2
Plant Location
 The selection of a location is a key decision,
involving substantial investments in
constructing buildings, installing machinery,
and setting up equipment.
Need for Selecting a Suitable Location
 In case of Location Choice for the First
Time or New Organizations
o Identification of region – proximity,
suppliers, target markets, and
relevant infrastructure.
o Choice of a site within a region –
accessibility, local regulations, and
proximity.
o Dimensional analysis – physical
dimensions of the site, potential for
future expansion, and compatibility
with the organization’s growth
trajectory.
 In case of Location Choice for Existing
Organizations
o Plants manufacturing distinct
products – Each plant services the
entire market area for the
organization.
o Manufacture plants supplying a
specific market area – Each plant
manufactures almost all of the
company’s products.
o Plants divided on the basis of the
process or stages in manufacturing
– Each production process or stage
of manufacturing may require
distinctively different equipment
capabilities, labor skills,
technologies, and managerial
policies and emphasis.
o Plants emphasizing flexibility –
This requires much coordination
between plants to meet the changing
needs and at the same time ensure
efficient use of the facilities and
resources.
 In case of Global Location
o Virtual Proximity – Organizations
strategically position themselves in
locations that foster virtual
proximity, leveraging digital
platforms, real-time
communication, and collaborative
tools to bridge the gap between
geographically dispersed teams.
o Virtual Factory – They embrace the
idea of a virtual factory, where
manufacturing capabilities are
distributed across different global
locations.
Factors Influencing Plant Location/Facility
Location
General locational factors
 Controllable factors – facility design,
technology adoption, and workforce
management.
 Uncontrollable factors – economic climate,
government regulations, and socio-cultural
aspects.
Specific locational factor
 Manufacturing Organizations
o Proximity to Raw Materials
o Transportation Infrastructure
o Workforce Skill Set
o Utilities and Infrastructure
 Service Organizations
o Proximity to Market
o Labor Availability
o Technology Infrastructure
o Quality of Life for Employee
Classification of Location Factors
Dominant Factors
 Derived from Competitive Priorities
 Strong Impact on Sales of Costs
 Strategic Consideration
Secondary Factors
 Also Important, but Varied Impact
 Management Flexibility
 Balancing Act
Location Theories
 Alfred Weber (1868-1958) =
Revolutionized the understanding of
industrial location with the groundbreaking
publication of Theory of the Location of
Industries in 1909.
 The point of optimal transportation
o Based on the costs of distance to the
“material index” – the ratio of
weight to intermediate products
(raw materials) to finished products.
 The labor distortion
o In which more favorable sources of
lower cost labor may justify greater
transport distances.
 Agglomeration and Deagglomerating
o Agglomeration or concentration of
firms in a locale occurs when there
is a sufficient demand for support
services for the company and labor
force.
o Deagglomeration occurs when
companies and services leave
because of over concentration of
industries or of the wrong types of
 industries, or shortages of labor,
capital, affordable land, etc.
Plant Layout
 Refers to the physical arrangement of
productions facilities.
Principles of Plant Layout
1. Principle of Integration – A good layout
that integrates men, materials, machines,
and supporting services and others in order
to get the optimum utilization of resources
and maximum effectiveness.
2. Principle of minimum distance –
Concerned with the minimum travel (or
movement) of man and materials.
3. Principle of cubic space utilization – A
good layout is one that utilize both
horizontal and vertical space.
4. Principle of flow – A good layout is one
that makes the material to move in forward
direction towards the completion stage, i.e.,
there should not be any backtracking.
5. Principle of maximum flexibility – A good
layout is one that can be altered without
much cost and time, i.e., future requirements
should be taken into account while
designing the present layout.
6. Principle of safety, security, and
satisfaction – A good layout is one that
gives the consideration to workers’ safety
and satisfaction and safeguards the plant and
machinery against fire, theft, etc.
7. Principle of minimum handling – A good
layout is one that reduces the material
handling to the minimum.
Classification of Layout
 Process Layout
o Recommended for batch
production.
o All machines performing similar
type of operations are grouped at
one location in the process layout.
 Production Layout
o Machines and auxiliary services are
located according to the processing
sequence of the product.
 Combination Layout
o A combination of process and
product layouts and combines the
advantages of both types.
o It is possible where an item is being
made in different types and sizes.
 Fixed position Layout
o Also called the project type of
layout.
o The material, or major components
remain in a fixed location and tools,
machinery, men and other materials
are brought to this location.
 Group Layout
o Came from a trend of bringing
element of flexibility into
manufacturing system as regards to
variation in batch sizes and
sequence of operations.
Service Facility Layouts
 Designed based on degree of customer
contact and the service needed by the
customer.
Significance of Service Facility Layout
 Degree of Customer Contact
 Adaptation of Process Layout
 Independent Service Paths in Hospitals
 Customization of Service Layouts
 Importance of Customer Experience
 Efficiency in Service Delivery
 Consideration for Future Expansion
Organization of Physical Facilities
Factory Building
 A factor which is the most important
consideration for every industrial enterprise.
Design of the Building
 Flexibility
 Product and equipment
 Expansibility
 Employee facilities and service area
 Lighting
 Climate conditions
 Ventilation
Work-Related Welfare Facilities
 Drinking Water
 Sanitary Facilities
 First-aid and Medical Facilities
 Rest Facilities
 Feeding Facilities
 Child-care Facilities
 Recreational Facilities
Module 3 – Material Handling
Material Handling
 Haynes defines material handling “it
handles the basic operations in connection
with the movement of bulk, packaged and
individual products in a semi-solid or solid
state by means of gravity manually or
power-actuated equipment and within the
limits of individual producing, fabricating,
processing or service establishment.
 The function dealing with the preparation,
placing and positioning of materials to
facilitate their movement or storage.
Objectives of Material Handling
  Minimize cost of material handling
 Minimize delays and interruptions by
making available the materials at the point
of use at right quantity and at right-time.
 Increase the productive capacity of the
production facilities by effective utilization
of capacity and enhancing productivity.
 Safety in material handling through
improvement in working condition.
 Maximum utilization of material handling
equipment.
 Prevention of damages to materials.
 Lower investment in process inventory.
Principles of Material Handling
 Planning principle
o It’s not just moving stuff; it’s about
having a vision.
 Systems principle
o This principle encourages looking
at the big picture.
 Space utilization principle
o This principle reminds you to
maximize your valuable space.
 Unit load principle
o This principle encourages handling
larger quantities at once.
 Gravity principle
o Utilize gravity to move a material
wherever practicable.
 Material flow principle
o This principle emphasizes
optimizing the flow of materials.
 Simplification principle
o This principle promotes
eliminating unnecessary steps and
equipment.
 Safety principle
o This principle prioritizes safe
handling practices and
equipment.
 Mechanization principle
o This principle encourages utilizing
technology to your advantage.
 Standardization principle
o Standardize methods, types, size of
material handling equipment.
 Flexibility principle
o This principle encourages using
methods and equipment that can
perform a variety of task and
applications.
 Equipment selection principle
o This principle emphasizes
considering all aspect of material,
move and method to be utilized.
 Dead weight principle
o This principle encourages reducing
the ratio of dead weight to pay load
to mobile equipment.
 Motion principle
o This principle reminds you that
idling equipment is wasted
potential.
 Idle time principle
o This principle focuses on reducing
idle time/unproductive time of
both MH equipment and manpower.
 Maintenance principle
o Plan for preventive maintenance or
scheduled repair of all handling
equipment.
 Obsolescence principle
o This principle encourages replacing
obsolete handling methods or
equipment when more efficient
method/equipment will improve
operation.
 Capacity principle
o Use handling equipment to help
achieve its full capacity.
 Control principle
o This principle emphasizes using
material handling equipment to
improve production control,
inventory control and other
handling.
 Performance principle
o Determine efficiency of handling
performance in terms of cost per
unit handled which is the primary
criteria.
Selection of Material Handling Equipment
Factors in Selecting Material Handling
Equipment
 Properties of the Material
o Is it solid, liquid, or gas?
o In what size, shape and weight it is
to be moved.
 Layout and Characteristics of the
Building
o Availability of space for handling.
 Production Flow
o How your materials move within
your operation.
o Constant flow – Fixed equipment:
streamlined and efficient for high-
volume production of the same
product.
o Unpredictable flow – Mobile
equipment: adaptable and versatile
for handling diverse products and
changing needs.
 Cost Consideration
o Costing can help in taking a final
decision.
 o Initial Investment – The initial
capital required to acquire
equipment is a significant factor.
o Operating costs – Ongoing
operational expenses, such as fuel,
energy consumption, and other
direct operational costs, add
significantly to the total cost of
equipment ownership.
o Maintenance cost – Regular
maintenance is required to ensure
that equipment continues to
function properly.
o Total Cost Analysis – To make an
informed decision, a thorough
analysis of the total cost of
ownership for each equipment
option is required.
o This includes not only the initial
investment, operating costs,
maintenance costs but also any
potential costs associated with
downtime, repairs, or unanticipated
events.
 Nature of Operations
o Temporary vs. Permanent
Handling – For short term
requirements, equipment that is
adaptable and easy to mobilize may
be preferred. Permanent operations,
on the other hand, may require more
robust and specialized solutions
designed for long-term stability and
efficiency.
o Continuous and Intermittent
Flow – Some operations require a
continuous and uninterrupted flow,
while other may necessitate
intermittent handling.
o Material Flor Patterns – Vertical
or horizontal; materials may be
moved vertically or horizontally
during operations.
 Engineering Factors
o Door and Ceiling Dimensions
o Floor Space
o Flooring Conditions
o Structural Strength
Material Handling Equipment
Classification of Material Handling Equipment
 Lifting Equipment
o Overhead (Cranes) – Suspended
from ceiling, these cranes move
horizontally and vertically,
efficiently lifting and transporting
heavy loads.
o Forklifts – Essential for lifting and
relocating palletized loads, forklifts
come in various types, including
counterbalance and reach trucks.
 Conveying Equipment
o Belt Conveyors – Utilizing
continuous belts, these systems
transport materials horizontally or
on inclines. Optimizing material
flow.
o Roller Conveyors – Driven by
roller, these conveyors are suitable
for moving heavy items along a
path.
 Storage Equipment
o Racking Systems – Including pallet
racks, cantilever racks, and drive-in
racks, these structures efficiently
store materials in a systematic
manner.
o Shelving Systems – Adjustable and
static shelving units cater to the
storage of smaller items in
organized configurations.
 Industrial Tracks
o Hand Tracks and Dollies –
Manually operated, these tools aid
in the manual movement of smaller
loads.
o Tow Tractors – Used for towing
multiple carts or trailers, tow
tractors streamline material
transport within a facility.
 Automated Guided Vehicles
o AGVs – Self guided vehicles
equipped with sensors and
controllers.
 Hoisting Equipment
o Hoists and Winches – Employed
for vertical lifting, hoists and
winches come in various
configurations, such as chain hoists
and wire rope winches.
 Bulk Material Handling Equipment
o Bucket Elevators – Used for
vertical conveying of bulk materials
like grains and powders.
o Conveyor Belts for Bulk
Materials – Specifically designed
belts for transporting large
quantities of materials.
 Dock Equipment
o Dock Levelers – Facilitate the
smooth transfer of materials
between loading docks and trucks.
o Dock Seats and Shelters –
Enhance the efficiency of loading
and unloading operations by sealing
the dock area.
 Pallet Jacks
 o Manual Pallet Jacks – Manually
operated for moving palletized
loads over short distances.
o Electric Pallet Jacks – Motorized
versions designed for increased
efficiency in handling pallets.
 Sorting and Pick Systems
o Automated Sorting Systems –
Mechanized systems that streamline
the sorting and distribution of
materials.
o Pick to Light Systems – Utilize
lights to guide operators in
accurately picking items for order
fulfillment.
Relationship Between Plant Layout and Material
Handling
 Minimization of Material Handling
o Material movement does not add
any value to the product so, the
material handling should be kept at
minimum though not avoid it.
 Reduced Travel Distances for Workers
o The productive time of workers will
go without production if they are
required to travel long distance to
get the material tools, etc.
 Optimization of Space
o Plant layout integrates all the
movements of men, material
through a well-designed layout with
material handling system, ensures
that space is utilized optimally,
minimizing congestion and
promoting smooth flow.
 Building an Efficient Material Handling
System
o Good plant layout helps in building
efficient material handling system.
Module 4 – Materials Management
Materials Management
 A function, which aims for integrated
approach towards the management of
materials in an industrial undertaking.
 Defined as “function responsible for the
coordination of planning, sourcing,
purchasing, moving, storing, and
controlling materials in an optimum
manner so as to provide a pre-decided
service to the customer of a minimum
cost.”
The Functions of Material Management
 Material Planning and Control – The way
to plan for any material which is going to
serve the end customers need within the
specific time &money.
o Required Estimation - Determine
the exact amount of each material
required for a given product or
period based on production
schedules and sales estimates.
o Budgeting – Setting aside money
for material purchases in
accordance with needs assessment
and cost analyses.
o Inventory Forecasting – Estimate
future supply levels by taking lead
times and usage trends into account.
o Order Scheduling – Plan orders
with suppliers in advance to
guarantee that supplies arrive when
needed and prevent stock outs and
wasteful storage expenses.
o Performance Monitoring –
Keeping an eye on how material
utilization fits into plans and
budgets, spotting irregularities, and
making adjustments when needed.
 Purchasing
o Supplier Selection – Determine
and evaluate potential suppliers
according to criteria such as
affordability, dependability,
sustainability, and quality.
o Negotiation - Negotiable terms and
conditions with suppliers, trying to
get the best deal on terms of
payment. delivery, and cost.
o Order – Monitor order status, get in
touch with suppliers, and resolve
any delays or discrepancies.
o Supplier relationship
management – Build strong
relationships with suppliers through
open communication, timely
payments, and fair cooperation.
o Payment approval – Check
invoices for completeness and
authorize payments to vendors in
accordance with the terms specified.
o Supplier evaluations and rating –
Evaluate the performance of your
suppliers in terms of quality,
delivery, and service, and use this
information for future decision-
making.
 Store Management or Management -This
involves physical control of materials,
preservation of stores, minimization of
obsolescence and damage through timely
disposal ad efficient handling, maintenance
of store records, proper location and
stocking.
 o Physical Contact
o Preservation
o Obsolescence minimization
o Efficient handling
o Record maintenance
o Proper location and stocking
o Stock verification
 Inventory Control or Management –
Generally refers to the materials in stock.
o Balancing inventory levels
o Demand forecasting
o Order quantity analysis
o ABC Classification
o Safety stock
 Other related activities
o 3S
 Standardization – Means
producing maximum
variety of products from the
minimum variety of
materials, parts, tools and
processes.
 Simplification – Is closely
related to standardization;
simplification is the process
of reducing the variety of
products manufactured.
 Specifications – It refers to
the precise statement that
formalizes the requirements
of the customer.
o Value Analysis – Concerned with
the costs added due to the
inefficient or unnecessary
specifications and features.
o Ergonomics (Human
Engineering)
 Human engineering focuses
on human beings and their
interaction with products,
equipment facilities and  Efficient record keeping and management
environments used in the reporting.
work. Parameters of Purchasing
 The word “Ergonomics”  Right Price
has its origin in two Greek  Right Quality
words “Ergon” meaning  Right Time
work and “Nomos”  Right Source
meaning natural law.  Right Quantity
 Right Attitude
Material Planning and Control
 Right Contracts
 A scientific technique of determining in
 Right Material
advance the requirements of raw materials,
ancillary parts and components, spares etc.,  Right Transportation
as directed by the production program.  Right Place of Delivery
o Macro Factors – Price trends,
business cycles, government import Stores Management
policy, etc.  The most important purpose served by the
o Micro Factors – Plant capacity stores is to provide uninterrupted service to
utilization, rejection rates, lead the manufacturing divisions.
times, inventory levels, working The Functions of Stores
capital, delegation of powers and  To receive raw materials, components, tools,
communication. equipment and other items and account for
them.
Purchasing  To provide adequate and proper storage and
 An important function of materials preservation to the various items.
management. In any industry purchase  To meet the demands of the consuming
means buying of equipment, materials, departments by proper issues and account
tools, parts etc. for the consumption.
The Objectives of Purchasing  To minimize obsolescence, surplus and
 To avail the materials, suppliers and scrap through proper codification,
equipment at the minimum possible cost. preservation and handling.
 To increase the asset turnover. o Codification – A process of
 To ensure the continuous flow of representing each item by a number,
production. the digit of which indicates the
 To develop an alternative source of supply. group, sub-group, the type and the
dimension of the item.
 To establish and maintain the good relations
with the suppliers.  To highlight stock accumulation,
discrepancies and abnormal consumption
 To achieve maximum integration with other
and effect control measures.
department of the company.
 To train and develop the personnel.
  To assist in verification and provide
supporting information for effective
purchase action.
Inventory Control or Management
 Inventory control is a planned approach of
determining what to order, when to order,
how much to order and how much stock
so that the costs associated with buying
and storing are optimal without
interrupting production and sales.
Techniques of Inventory Control
 ABC Analysis – The classification of
existing inventory is based on annual
consumption and the annual value of the
items.
 HML Analysis – Based on unit price of the
items.
 VED Analysis – Based on the criticality of
the items.
 ESN Analysis – Based on the consumption
of the items.
 SDE Analysis – Based on the items.
 GOLF Analysis – Based on the sources of
the items.
 SOS Analysis – Based on the nature of the
items.
Just-In-Time Manufacturing (JIT)
 A philosophy rather than a technique.
 By eliminating all waste and seeking
continuous improvement, it aims at creating
manufacturing system that is response to the
market needs.
Seven Wastes
 Waste of overproduction eliminate by
reducing set-up times, synchronizing
quantities and timing between processes,
layout problems.
 Waste on waiting eliminate bottlenecks and
balance uneven load by flexible work force
and equipment.
 Waste of transportation establish layouts and
locations to make handling and transport
unnecessary if possible.
 Waste of processing itself question
regarding the reasons for existence of the
product and then why each process is
necessary.
 Waster of stocks reducing all other wastes
reduces stocks.
 Waste of motion study for economy and
consistency.
 Waste of making defective products develop
 the production process to prevent defects
from being produced, so as to eliminate
inspection.
Module 5 – Production Planning and Control
Production Planning and Control
 A tool available to the management to
achieve the stated objectives.
 A production system is encompassed by the
four factors. i.e., quantity, quality, cost and
time.
 Can be defined as the “direction and
coordination of firms’ resources towards
attaining the prefixed goals.”
Need for Production Planning and Control
 Effective utilization of firms’ resources
 To achieve the production of objectives with
respect to quality, quantity, cost and
timeliness of delivery.
 To obtain the uninterrupted production flow
in order to meet customers varied demand
with respect to quality and committed
delivery schedule.
 To help the company to supply good quality
products to the customer on the continuous
basis at competitive rates.
Production Control
 Involves monitoring and regulating
production activities to ensure that they
align with the planned objectives.
Challenges in Production Control
 Non-availability of materials (due to
shortage, etc.)
 Plant, equipment and machine breakdown;
 Changes in demand and rush orders;
 Absenteeism of workers;
 Lack of coordination and communication
between various functional areas of
business.
Essential Step in Control Activity
 Initiating Production – Starting
manufacturing activities as per plans,
allocating resources, and issuing wok
orders.
 Progress Monitoring – Continuous
tracking production progress, analyzing
performance metrics, and identifying
deviations from plans.
 Implementing Corrective Actions –
Taking prompt measure to address
deviations, optimize processes, and prevent
recurrence based on feedback and reporting.
Objectives of Production Planning and Control
 Systematic Planning of Production
Activities
o Systematic planning involves
organizing production activities in a
structured manner to achieve
 optimal efficiency in the production
of goods or services.
 Organizing Production Facilities
o Production planning and control
aim to organize production facilities
such as machinery. labor, and
materials to meet stated production
objectives regarding quantity,
quality, time, and cost.
 Optimum Scheduling of Resources
o Optimum scheduling involves
allocating resources such as
machinery, manpower, and
materials in a way that maximizes
productivity and minimizes idle
time.
 Coordination with Other Departments
o Production planning and control
coordinate with other departments
such as procurement, logistics, and
sales to ensure a regular, balanced,
and uninterrupted flow of
production activities.
 Conforming to Delivery Commitments
o Production planning and control
aim to meet delivery commitments
by ensuring that production
schedules align with customer
demand and delivery deadlines.
 Materials Planning and Control
o Materials planning and control
involve forecasting material
requirements, managing inventory
levels, and ensuring the availability
of materials needed for production.
 Making Adjustments for Changes in
Demand
o Production planning and control
enable companies to adjust
production schedules, allocate
resources, and respond effectively o Time ticket is nothing but a card
to changes in demand and rush which is designed to note down the
orders. STR. actual time take at various
processes.
Phases of Production of Planning and Control  Control Phase
 Planning Phase o Progress Reporting
o Prior Planning  In progress reporting, the
 It means pre-production data regarding what is
planning. This includes all happening with the job is
the planning efforts, which collected. The various data
are taking place prior to the pertaining to materials
active planning. rejection, process
o Active Planning variations, equipment
 This is the actual failures, operator efficiency,
production planning which operator absenteeism, tool
includes various activities life, etc., are collected and
directly related to the analyzed for the purpose of
production at micro level progress reporting
immediately following prior o Corrective Action
planning. Active planning  The tasks under corrective
involves process planning, action primarily make
tools planning, materials provisions for an
planning, routing, loading unexpected event. Some
and scheduling. examples of corrective
 Action Phase actions are creating
o Action phase has the major step of schedule flexibility,
dispatching. schedule modifications,
o Dispatching is the transition from capacity modifications,
planning phase to action phase. make or buy decisions,
o In this phase, the worker is ordered expediting the work,
to start manufacturing the product. preplanning, and so on.
o Job order number is the key item
which is to be mentioned in all
other reports/orders. Functions of Production Planning and Control
o Store issues order gives instruction  Pre-Planning Function – A macro level
to stores to issue materials for planning and deals with analysis of data and
manufacturing the product as per is an outline of the planning policy based
product specifications. upon the forecasted demand, market
o Tool order instructs the tool room analysis, and product and design
to issue necessary tools. development.
  Planning Function – The planning function
starts once the task to be accomplished is
specified, with the analysis of four M’s, i.e.,
Machines, Methods, Materials, and
Manpower.
 Control Function – Affected y dispatching,
inspection and expediting materials control,
analysis of work-in-process.
Parameters for PPC
 Materials – Raw materials.
 Machines and equipment – Detailed
analysis of available production facilities,
equipment down time, maintenance policy
procedure, and schedules.
 Methods – Concerned with the analysis of
alternatives and selection of the best method
with due consideration to constraints
imposed.
 Process Planning (Routing) – It is
concerned with selection of path or route
which the raw material should follow to get
transformed into finished product.
 Estimating – Operation times are estimated.
 Loading and scheduling – Scheduling is
concerned with preparation of machine
loads and fixation of starting and
completion dates for each of the operations.
 Dispatching – The process of setting
production activities in motion through
release of orders and instructions.
 Expediting – This is the control tool that
keeps a close observation on the progress of
the work. It is logical step after dispatching
which is called "follow-up.”
 Inspection - It is a major control tool.
Though the aspects of quality control are the
separate function, this is of very much
important to PPC both for the execution of
the current plans and its scope for future
planning.
 Evaluation - This stage though neglected is
a crucial to the improvement of productive
efficiency. The success of this step depends
on the communication, data and information
gathering and analysis.
Operations Planning and Scheduling Systems
 Concern with the volume and timing of
outputs, the utilization of operations
capacity at desired levels for competitive
effectiveness.
Components of Operations Planning and
Scheduling System
 The Business Plan – A statement of the
organization's overall level of business
activity for the coming six to eighteen
months, usually expressed in terms of
output. It also specifies the overall inventory
and backlog levels that will be maintained
during the planning period.
 Aggregate Production (Output) Planning
– The process of determining output levels
of product groups over the coming six to
eighteen months on a weekly or monthly
basis. It identifies the overall level of
outputs in support of the business plan.
 Aggregate Capacity Planning – it is the
process of testing the feasibility of
aggregate output plans and evaluating
overall capacity utilization. A statement of
desired output is useful only if it is feasible.
 Master Production Scheduling (MPS) – A
schedule showing week by week how many
of each product must be produced according
to customer orders and demand forecasts. Its
purpose is to meet the demand for
individual products in the product group.
 Resource Requirement Planning – Or
Rough-Cut Planning is the process of testing
the feasibility of a master production
schedule in terms of capacity.
 Material Requirement Planning (MRP) –
A system of planning and scheduling the
time-phased material requirements for
releasing materials and receiving materials
that enable the master production schedule
to be implemented.
 Capacity Requirement Planning (CRP) –
Is an iterative process of modifying the MPS
or planned resources to make capacity
consistent with the production schedule.
 Shop Floor Control – Involves the
activities that execute and control shop
operations namely loading, sequencing, and
detailed scheduling and expediting jobs in
production. It coordinates the weekly and
daily activities that get jobs done.
 Loading – Each job (customer order) may
have its unique product specification and,
hence, it is unique through various work
centers in the facility.
 Sequencing – This stage establishes the
priorities for jobs in the queues (waiting
lines) at the work centers. Priority
sequencing specifies the order in which the
waiting jobs are processed; it requires the
adoption of a priority sequencing rule.
 Detailed Scheduling – Determines start
times, finish times and work assignments
for all jobs at each work center.
 Expediting – A process of tracking a job's
progress and taking special actions to move
it through the facility.
 Input/Output Control – Related to the
activities to monitor actual versus planned
utilization of a work center's capacity.
Output plans and schedules call for certain
levels of capacity at a work center, but
 actual utilization may differ from what was
planned.

Capacity Planning – is to be carried out keeping in

mind future growth and expansion plans, market
trends, sales forecasting, etc. It is a simple task to
plan the capacity in case of stable demand.
Routing - may be defined as the selection of path
which each part of the product will follow while
being transformed from raw materials to finished
products.
Scheduling – can be defined as "prescribing of
when and where each operation necessary to
manufacture the product is to be performed."