Production Planning

& Control(PPC) and

Material
Management

Abu Bashar
 Introduction
Planned production is an important feature of
the small industry.
Planning and control involve generally the
organization and planning of manufacturing
process.
The ultimate objective is the organization of
the supply and movement of materials and
labour, machines utilization and related
activities, in order to bring about the desired
manufacturing results in terms of quality,
quantity, time and place.
 Objective of PPC
Optimum Utilization of Capacity
Inventory control
Economy in production time
Ensure quality
To sum up we may say that PPC is of immense
value to the entrepreneur in capacity utilization
and inventory control.
More importantly it improves his response time
and quality. As such effective PPC contributes to
time, quality and cost parameters of
entrepreneurial success.
Process of PPC
 Planning
Production planning may be defined as the
technique of foreseeing every step in a long
series of separate operations, each step to be
taken at the right time and in the right place
and each operation to be performed in
maximum efficiency.
It helps entrepreneur to work out the quantity
of material manpower, machine and money
requires for producing predetermined level of
output in given period of time.
 Routing
Under this, the operations, their path and sequence are
established.
To perform these operations the proper class of machines and
personnel required are also worked out. The main aim of
routing is to determine the best and cheapest sequence of
operations and to ensure that this sequence is strictly followed.
Routing procedure involves following different activities.
An analysis of the article to determine what to make and what
to buy.
To determine the quality and type of material
Determining the manufacturing operations and their sequence.
A determination of lot sizes
Determination of scrap factors
An analysis of cost of the article
Organization of production control forms.
 Scheduling
It means working out of time that should be required to
perform each operation and also the time necessary to
perform the entire series as routed, making allowances for all
factors concerned.
It mainly concerns with time element and priorities of a job.
The pattern of scheduling differs from one job to another
Production schedule: The main aim is to schedule that amount
of work which can easily be handled by plant and equipment
without interference.
Its not independent decision as it takes into account following
factors.
(1) Physical plant facilities of the type required to process the
material being scheduled.
(2) Personnel who possess the desired skills and experience to
operate the equipment and perform the type of work involved.
(3) Necessary materials and purchased parts.
 Loading
The next step is the execution of the schedule
plan as per the route chalked out it includes the
assignment of the work to the operators at their
machines or work places.
So loading determines who will do the work as
routing determines where and scheduling
determines when it shall be done.
Production control
Production control is the process of planning
production in advance of operations,
establishing the exact route of each individual
item part or assembly, setting, starting and
finishing for each important item, assembly or
the finishing production and releasing the
necessary orders as well as initiating the
necessary follow-up to have the smooth
function of the enterprise.
 Dispatching
Dispatching involves issue of production orders
for starting the operations. Necessary authority
and conformation is given for:
Movement of materials to different workstations.
Movement of tools and fixtures necessary for
each operation.
Beginning of work on each operation.
Recording of time and cost involved in each
operation.
Movement of work from one operation to
another in accordance with the route sheet.
Inspecting or supervision of work
 Follow up
Every production programme involves
determination of the progress of work,
removing bottlenecks in the flow of work and
ensuring that the productive operations are
taking place in accordance with the plans.
It spots delays or deviations from the
production plans. It helps to reveal detects in
routing and scheduling, misunderstanding of
orders and instruction, under loading or
overloading of work etc.
All problems or deviations are investigated and
remedial measurer are undertaken to ensure
the completion of work by the planned date.
 Inspection
This is mainly to ensure the quality of goods.
It can be required as effective agency of
production control.
Corrective measures
Corrective action may involve any of those
activities of
adjusting the route,
rescheduling of work
changing the workloads,
repairs and
maintenance of machinery or equipment,
control over inventories of the cause of deviation
is the poor performance of the employees.
Certain personnel decisions like training,
transfer, demotion etc. may have to be taken.
Alternate methods may be suggested to handle
peak loads.
Material Management
We can define Materials Management as the
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 at a minimum
cost.
Planning and controlling the flow of materials
Objectives:
Maximize the use of the firms resources
Provide the required level of customer service
SCOPE OF MATERIALS MANAGEMENT
Materials Management strives to ensure that the
material cost component of the total product cost be
the least. In order to achieve this, the control is
exercised in the following fields.
1. Materials Planning.
2. Purchasing.
3. Store Keeping.
4. Inventory Control.
5. Receiving, Inspection and Dispatching.
6. Value Analysis, Standardization and Variety
Reduction.
7. Materials Handling & Traffic.
8. Disposal of Scrap and Surplus, Material
Preservation.
The function of material planning department
is to plan for the future procurement of all the
required materials as per the production
schedule.
At the time of material planning, the budget
allocated for the materials will also be
critically reviewed, for better control.
Objectives
However, within the broader management
objectives of any industry or business,
Materials Managements contribution towards
objectives may be divided into two categories:
1) Primary and
2) Secondary
The former contributes directly to the
Materials Management function and the latter,
helps other departments to achieve their
objectives.
 Objective of material management
Primary
Right price
High turnover Secondary
Low procurement & storage Forecasting
Inter-departmental harmony
cost
Continuity of supply Product improvement
Consistency in quality Standardization
Good supplier relations Make or buy decision
Development of personnel New materials & products
Good information system
 Four basic needs of Material
management
1. To have adequate materials on hand when needed
2. To pay the lowest possible prices, consistent with quality
and value requirement for purchases materials
3. To minimize the inventory investment
4. To operate efficiently
Basic principles of material
management
1.Effective management & supervision
It depends on managerial functions of
Planning
Organizing
Staffing
Directing
Controlling
Reporting
Budgeting
2. Sound purchasing methods
3.Skillful & hard poised negotiations
4.Effective purchase system
5.Should be simple
6.Must not increase other costs
7.Simple inventory control programme
Functional areas of material
management
1. Purchasing

2. Central service supply

3. Central stores

4. The print shops

5. The pharmacy

6. Dietary
Purchasing
After material planning, purchasing is to be done.
Purchasing department buys material based on the
purchase requisitions from user departments and
stores departments and annual production plan.
There are four basic purchasing activities.
a) Selecting suppliers, negotiating and issuing
purchase orders.
b) Expediting delivery from suppliers.
c) Acting as liaison between suppliers and other
company departments.
d) Looking for new products, materials, and
suppliers that can contribute to company
objectives.
Points to remember while purchasing
Proper specification

Invite quotations from reputed firms

Comparison of offers based on basic price, freight &

insurance, taxes and levies

Quantity & payment discounts

Payment terms

Delivery period, guarantee

Vendor reputation

(reliability, technical capabilities, Convenience,

Availability, after-sales service, sales assistance)
Short listing for better negotiation terms

Seek order acknowledgement

Purchase Management
Parameters
Purchasing items with right
price.
Purchasing with right quality.
At right time.
Purchasing from right
source(Vendor).
Purchasing items in right
quantity.
Purchase Management
Purchase systems
Pre-purchase system
Requirement Programs.
Selection of Suppliers.
Obtain quotation & later
evaluating.
Making Requisition.
Purchase Management
Purchase systems
Ordering Systems
Once the rates are fixed.
The order is placed with
selected vendors.
Purchase Management
Purchase systems
Post Purchase System
Includes follow up
procedures.
Receipt.
Checking invoices.
Stores Management
Receives raw material, tools, equipments
& other necessary materials & accounts
them.
Preservation of items in good condition for
later use.
Minimization of obsolescence and damage
through handling.
Disposal & efficient handling.
Stores Management
Maintenance of stores record.

Proper location & stocks of Material.

Reconciling the material with book

figures.

Maintains a proper account on issue of

items on demand from shop floor /
production division.

Information reports to support

Stores Management
System
Receipt System
Maintains proper document
about item which are received at
the store.
Details on pending orders
arranged in chronological order
of dates.
Accordingly schedule the labour
force unload items when they
are received at stores.
Stores Management
System
Stocking System
Necessary measures are taken
to check quality, quantity &
weight of the items before
accepted in the store.
Stores Management
System
Issue System
For maintaining accounts of
issues made to internal division
or external divisions.
Helps timely reordering to
replenish stock.
In issuing to external divisions
(sub contract), controls are
formal and adequate enough to
take care of payments and
claims.
Storage
Store must be of adequate space

Materials must be stored in an appropriate place

in a correct way

Group wise & alphabetical arrangement helps in

identification & retrieval

First-in, first-out principle to be followed

Monitor expiry date

Follow two bin or double shelf system, to avoid

Stock outs

Reserve bin should contain stock that will cover

lead time and a small safety stock

Thank you Very
Much