Operations Planning and Control

Module : 1

Concepts of OPC

Course: Mech (Sem VIII)

 Concepts of PPC

Production Production Planning & Control

• It is the process by which goods, products or services are created.
• It can also be defined as a means of converting the raw materials into finished products by performing a
set of manufacturing operations in a predetermined sequence that transforms given material to a desired
shape.

Operation

• It is the process by which value is created to the product or service.

• Operations Management is a business function responsible for planning, coordinating and controlling the
resources needed to produce products and services for a company.

Production Planning and Control

 Concepts of PPC

Planning Production Planning & Control

• It means preparing the scheme in advance before the actual work is started.
• It is a pre-production activity.

Production Planning and Control

 Concepts of PPC

Control Production Planning & Control

It means the supervision of all the relevant operations with the help of a control mechanism that feeds
back the progress of the work.

Production Planning and Control

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Operation Planning Production Planning & Control

• It is a pre-production activity.

• It is the determination of manufacturing requirements such as manpower, materials, machines and

manufacturing processes.

Production Planning and Control

 Concepts of PPC

Production Planning & Control

Operation Control
• It reviews the progress of the work and takes corrective steps in order to ensure that programmed
production takes place.

Production Planning and Control

 Concepts of PPC

Operation Planning and Control

It is defined as the direction and co-ordination of the firm's material and physical facilities towards the
attainment of pre-specified production goals in the most efficient and economical manner.

Production Planning and Control

 Concepts of PPC

Need for OPC

• Effective utilisation of firms resources.

• To achieve the production 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 a good quality product to the customer on the continuous basis at competitive rate.

Production Planning and Control

 Concepts of PPC

Phases of OPC
Forecasting

Order Writing
Prior Planning
Product Design

Planning Phase Process Planning and Routing

Material Control

Action Planning Tool Control

Loading

Scheduling

Production Planning and Control

 Concepts of PPC

Action Phase Dispatching

Data Collection
Progress Reporting
Data Interpretation
Control Phase

Expediting
Corrective Action
Replanning

Production Planning and Control

 Concepts of PPC

Production Management
 Production management is a part of operations management.
 It focuses solely on the production of goods and services, rather than on planning, designing and
supervising business activities.

Production Planning and Control

 Concepts of PPC

Factors Influencing OPC (Objectives of OPC)

• Coordinating input resources helps ensure that said inputs are ready where and when they are needed.
• Forecasting demand helps in making decisions on how much labor (manpower), space and materials are
needed.
• Capacity planning is linked to forecasting, and it is the process of making long-term decisions about
what the organization wants to be capable of delivering.
• Demand management is about actively influencing your demand keeping it within the capabilities of the
organization, smoothing it to keep a regular flow of work that can be efficiently delivered.
• Scheduling requires making plans and decisions about when and in what sequence jobs should be carried
out.
• Systems design is in charge of deciding—even before the factory gets built—the type of equipment,
layout, staffing, and processes that will be needed to get the best possible results.
• Operations Strategy entails aligning the operations strategy with the overall business strategy, to offer a
business winning competitive advantage.
• Performance management requires designing essential metrics, collecting, analyzing, presenting,
sharing and acting on relevant data.
• Resources requirements planning requires determining what resources are needed and when.

Production Planning and Control

 Concepts of PPC

Production and Operation Systems

 Production function deals with the transformation of a range of inputs into the required outputs (products)
having the requisite quality level.
 An operating system is a configuration of resources combined for the provision of goods or services.
 Operations in an organization can be categorized into manufacturing operations and service operations.
 Following characteristics can be considered for distinguishing manufacturing operations with service
operations:
1. Tangible/Intangible nature of output
2. Consumption of output
3. Nature of work (job)
4. Degree of customer contact
5. Customer participation in conversion
6. Measurement of performance.
Production Planning and Control
 Concepts of PPC

CLASSIFICATION OF PRODUCTION SYSTEMS

• Production systems can be classified as Job-shop, Batch, Mass and Continuous production systems.

Production Planning and Control

 Concepts of PPC
CLASSIFICATION OF PRODUCTION SYSTEMS - Job-shop Production
• Job-shop production are characterized by manufacturing one or few quantity of products designed and produced as per the specification
of customers within prefixed time and cost. The distinguishing feature of this is low volume and high variety of products.
• A job-shop comprises of general-purpose machines arranged into different departments. Each job demands unique technological
requirements, demands processing on machines in a certain sequence.
• Job-shop Production is characterized by:
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as a challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements of each product, capacities for each work centre and order priorities.
Advantages
Following are the advantages of Job-shop Production: Limitations
1. Because of general purpose machines and facilities variety of Following are the limitations of Job-shop Production:
products can be produced. 1. Higher cost due to frequent set up changes.
2. Operators will become more skilled and competent, as each job 2. Higher level of inventory at all levels and hence higher
gives them learning opportunities. inventory cost.
3. Full potential of operators can be utilized. 3. Production planning is complicated.
4. Opportunity exists for Creative methods and innovative ideas. 4. Larger space requirements.
Production Planning and Control
 Concepts of PPC
CLASSIFICATION OF PRODUCTION SYSTEMS – Batch Production
• American Production and Inventory Control Society (APICS) defines Batch Production as a form of manufacturing in which the
job pass through the functional departments in lots or batches and each lot may have a different routing. It is characterized by
the manufacture of limited number of products produced at regular intervals and stocked awaiting sales.
• Batch Production is characterized by
1. Shorter production runs.
2. Plant and machinery are flexible.
3. 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.
4. Manufacturing lead-time and cost are lower as compared to job order production.
Advantages Limitations
Following are the advantages of Batch Production: Following are the limitations of Batch Production:
1. Better utilization of plant and machinery. 1. Material handling is complex because of irregular and longer
2. Promotes functional specialization. flows.
3. Cost per unit is lower as compared to job order production. 2. Production planning and control is complex.
4. Lower investment in plant and machinery. 3. Work in process inventory is higher compared to continuous
5. Flexibility to accommodate and process number of products. production.
6. Job satisfaction exists for operators. 4. Higher set up costs due to frequent changes in set up.
Production Planning and Control
 Concepts of PPC
CLASSIFICATION OF PRODUCTION SYSTEMS – 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. The machines are arranged in a line or product layout.
Product and process standardization exists and all outputs follow the same path.
• Mass Production is characterized by
1. Standardization of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.
Limitations
Advantages Following are the limitations of Mass Production:
Following are the advantages of Mass Production: 1. Breakdown of one machine will stop an entire production
1. Higher rate of production with reduced cycle time. line.
2. Higher capacity utilization due to line balancing. 2. Line layout needs major change with the changes in the
3. Less skilled operators are required. product design.
4. Low process inventory. 3. High investment in production facilities.
5. Manufacturing cost per unit is low. 4. The cycle time is determined by the slowest operation.
Production Planning and Control
 Concepts of PPC
CLASSIFICATION OF PRODUCTION SYSTEMS – Continuous Production
• Production facilities are arranged as per the sequence of production operations from the first operations to the
finished product. The items are made to flow through the sequence of operations through material handling devices
such as conveyors, transfer devices, etc.
• Continuous Production is characterized by
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final product.
5. Planning and scheduling is a routine action.
Advantages Limitations
Following are the advantages of Continuous Production: Following are the limitations of Continuous
1. Standardization of product and process sequence. Production:
2. Higher rate of production with reduced cycle time. 1. Flexibility to accommodate and process
3. Higher capacity utilization due to line balancing. number of products does not exist.
4. Manpower is not required for material handling as it is completely automatic. 2. Very high investment for setting flow lines.
5. Person with limited skills can be used on the production line. 3. Product differentiation is limited.
6. Unit cost is lower due to high volume of production.
Production Planning and Control
 Concepts of PPC
• A Job type Project takes a long time to complete, involves a large investment of resources and produces one item at a time to a
customer order.
Examples include • roads, • construction projects, • aircraft manufacturing • new product development e.g. iPhone where
the outcome of the project is a prototype iPhone.
• Batch Production involves moving groups of the product through the manufacturing process in groups or batches. The volume is
relatively low and demand for the items can fluctuate.
Examples of batch production are • bakeries, • furniture making • cheese making etc
• Mass Production produces large volumes of a standard product for a mass market. The demand for the product is stable and the
demand is high. Most consumer goods are produced using this method.
Examples are • cars, • computers • fast food such as burgers There is usually a degree of automation involved.
• Continuous Production is used for very high volume products. These are highly standardised and are produced using highly
automated systems.
Examples of this are • electricity, • treated water, • foodstuffs, • paper

Production Planning and Control

 Concepts of PPC
Characteristics of Production Systems
Characteristics Job Batch Mass & Flow Continuous
Production Runs Small Short Long Long
Flow of Materials Discontinuous Continuous Continuous Continuous
Manufacturing Cycle Time Long delays Smaller Smaller Almost Zero
Plant Layout Process Pocess Product Product
Skill of Labour High Knowledge of at least one process Relatively Low Semi-skilled

Quality of Supervision High Knowledge of at least one process Relatively Low Semi-skilled
Material Handling More Relatively Less Relatively Less Mechanised
Flexibility in Production Schedule More Relatively Less Less Less
Cost of Production High Relatively Low Low Low

Production Planning and Control

 Concepts of PPC

Type of Production or manufacturing methods:

 Make to Stock (MTS)
• In MTS is a push approach where the inventory is manufactured and stocked in warehouses.
• MTS is the most common manufacturing method prevalent in fast moving consumer goods (FMCG),
garments and other similar industries.
• In MTS, the bill of materials (BOM) remains the same for one type of product.
• The important factors to consider when manufacturing items to stock are -
 Forecasting
 Seasonality
 Market demand
 Product expiry dates
 Available warehouse space
Production Planning and Control
 Concepts of PPC

 Make to Order (MTO)

• Make to order (MTO) is a pull approach where production begins only on receiving a customer order.

• It is used in industries like aircraft, luxury or large vehicles and large machine tool manufacturing where

holding inventory is expensive.

• Factors to consider for MTO are:

 Cost of holding inventory

 Total production time for an item

 Customer patience with respect to lead time

Production Planning and Control

 Concepts of PPC

 Engineer to Order (ETO)

• Similar to MTO, in engineer to order (ETO) the product is designed, engineered and produced only after

receiving a customer order with one key difference — Product Specifications vary depending on

unique requirements of customer.

• Items are produced with low frequency in ETO.

• Since the specifications are customized, every product will also have a different BOM.

• Some examples are Power plant boilers, electrical switchgear, commercial HVAC equipment, industrial

cranes, fire trucks, etc.

Production Planning and Control

 Concepts of PPC

 Assemble to Order (ATO)

• Products that are ordered by customers are produced quickly and are customizable to a certain extent.

• Once an order is received, the parts are assembled quickly and the final product is sent to the customer.

• Consider a manufacturer of personal computers. It might have all of the essential parts of a computer—

motherboards, graphic cards, processors, monitors, keyboards—in stock and already manufactured.

• When orders for new PC’s arrive, it is easy for the company to assemble and customize the computers

using the various components.

• The process is driven by customer demand, however, and until the order arrives, the components remain

on shelves.
Production Planning and Control
 Concepts of PPC

Status of PPC Department

It depends upon the company's manufacturing process.

Production Planning and Control

 Concepts of PPC

Prerequisites of PPC

 Data pertaining to design

 Equipment
 Raw materials
 Tooling
 Performance Standard
 Labour
 Operating systems

Production Planning and Control

 Concepts of PPC
Plant Layout
• Plant layout is a plan of optimum arrangement of facilities including personnel, equipment’s, storage space, material
handling equipment and all other supporting services along with the decision of best structure to contain all these facilities.
• Plant Layout is a plan of an optimum arrangement of facilities including
 personnel
 operating equipment
 storage space
 material handling equipment and
 all other supporting services along with the design of best structure to contain all these facilities.

Production Planning and Control

 Process Layout (Functional layout)
• Process layout is recommended for batch production.

• All machines performing similar type of operations are grouped at one location according to their functions.

• The flow paths of material through the facilities from one functional area to another vary from product to product.

• Usually the paths are long and there will be possibility of backtracking.

• Typically, job shops employ process layouts due to the variety of products manufactured and their low production volumes.
Product Layout
• In this type of layout, machines and auxiliary services are located according to the processing sequence of the product.

• If the volume of production (of one or more products) is large, the facilities can be arranged to achieve efficient flow of materials and

lower cost per unit.

• Special purpose machines are used which perform the required function quickly and reliably.

• Automobile and appliance manufacturers, as well as food-processing plants, usually use a product layout.

• Service companies may also use a product layout for routine processing operations.

• Product layout is designed based on a technique called line balancing.

Combination Layout
• A combination layout combines the advantages of both process and product layout.

• A combination layout is possible where a product is being made in different types and sizes.

• In such cases, machinery is arranged in a process layout but the process grouping (a group of number of similar machines)

is then arranged in a sequence (product layout) to manufacture various types and sizes of products.

• Files, hacksaws, circular metal saws, wood saws, etc. can be manufactured on a combination type of layout.
 Fixed Position Layout
• This is also called the project type of layout.

• In this type of layout, the material or major components

remain in a fixed location and tools, machinery, men and other

materials are brought to this location.

• This type of layout is suitable when only one or a few pieces

of identical heavy products are to be manufactured.

• Helps in job enlargement and upgrades the skills of the

operators.

• Greater flexibility is obtained with this type of layout.

Group Technology (Cellular) Layout
• Group technology or Cellular layout is a technique through

which it is feasible to identify and group similar or related

parts involved in the process of production.

• Groups that are formed in such a way are termed as cells.

• In this type of layout, cells are formed by grouping

different processes.

• In group technology or cellular layout, workers are given

cross-training in order to enhance their skills to operate

different equipment in a particular cell and be responsible

for the output of that cell.

Job Shop after
GT layout
Group Technology (Cellular) Layout

Job Shop after

GT layout