PRODUCTION PLANNING AND CONTROL--UNIT-I- INTRODUCTION to PPC

INTRODUCTION OF PRODUCTION PLANNING AND CONTROL
INTRODUCTION OF PRODUCTION PLANNING AND CONTROL
UNIT - 1

PRODUCTION PLANNING AND CONTROL
PRODUCTION PLANNING AND CONTROL
 PPC is aimed to achieving the efficient
PPC is aimed to achieving the efficient
utilization of resources (material, men ,
utilization of resources (material, men ,
facility) in the manufacturing organizations
facility) in the manufacturing organizations
through planning , coordinating and control
through planning , coordinating and control
the production activities that transform the raw
the production activities that transform the raw
materials in to finished product
materials in to finished product

PRODUCTION PLANNING AND
CONTROL
CONTROL

PPC = Production Planning +
PPC = Production Planning +
Production Control
Production Control

OBJECTIVES OF PPC
OBJECTIVES OF PPC
 To design the production system to meet with
To design the production system to meet with
minimum cost and quality standard
minimum cost and quality standard
 To ensure maximum utilization of resources
To ensure maximum utilization of resources
 To ensure production of quality products
To ensure production of quality products

To maintain inventory controls
To maintain inventory controls

To maintain flexibility in manufacturing
To maintain flexibility in manufacturing
operations
operations

OBJECTIVES OF PPC
OBJECTIVES OF PPC
 To plan the plant capacities for future
To plan the plant capacities for future
requirements
requirements
 To establish targets and checking them against
To establish targets and checking them against
peformance
peformance

To ensure effective cost reduction and cost
To ensure effective cost reduction and cost
control.
control.

PRODUCTION PLANNING
PRODUCTION PLANNING
Meaning:-
Meaning:-
Production planning involves management decisions on the resources
Production planning involves management decisions on the resources
that the firm will require for its manufacturing operations and the
that the firm will require for its manufacturing operations and the
selection of these resources to produce the desired goods at the
selection of these resources to produce the desired goods at the
appropriate time and at the least possible cost.
appropriate time and at the least possible cost.
Definition:-
Definition:-
"The planning of industrial operations involves three considerations,
"The planning of industrial operations involves three considerations,
namely, what work shall be done, how the work shall be done and
namely, what work shall be done, how the work shall be done and
lastly, when the work shall be done
lastly, when the work shall be done - kimball
- kimball

OBJECTIVES OF PRODUCTION
PLANNING
PLANNING
1.To determine the requirements of men, material and
1.To determine the requirements of men, material and
equipment.
equipment.
2.Arranging production schedules according to the
2.Arranging production schedules according to the
needs of marketing demand.
needs of marketing demand.
3.Arranging various inputs at a right time and in right
3.Arranging various inputs at a right time and in right
quantity.
quantity.
4.Making most economical use of various inputs.
4.Making most economical use of various inputs.
5.To achieve coordination among various departments
5.To achieve coordination among various departments
relating to production.
relating to production.

6.To make all arrangements to remove possible
6.To make all arrangements to remove possible
obstacles in the way of smooth production.
obstacles in the way of smooth production.
7.To achieve economy in production cost and
7.To achieve economy in production cost and
time.
time.
8.To operate plant at planned level of efficiency.
8.To operate plant at planned level of efficiency.
9.Making efforts to achieve production targets in
9.Making efforts to achieve production targets in
time.
time.
10.Providing for adequate stocks for meeting
10.Providing for adequate stocks for meeting
contingencies.
contingencies.

LEVELS OF PRODUCTION
LEVELS OF PRODUCTION
PLANNING
PLANNING
1.
1. Factory planning (Availability of machines,
Factory planning (Availability of machines,
buildings, and goods)
buildings, and goods)
2.
2. Process planning (Operations involved)
Process planning (Operations involved)
3.
3. Operation planning (Tools required)
Operation planning (Tools required)

FACTORS DETERMINING
FACTORS DETERMINING
PRODUCTION PLANNING
PRODUCTION PLANNING
1.
1. Volume of production
Volume of production
2.
2. Nature of production process
Nature of production process
3.
3. Nature of operations
Nature of operations

PRODUCTION CONTROL
PRODUCTION CONTROL
Meaning:-
Meaning:-
Production control guides and directs flow of production so that products
Production control guides and directs flow of production so that products
are manufactured in a best way and conform to a planned schedule and
are manufactured in a best way and conform to a planned schedule and
are of the right quality. Control facilitates the task of manufacturing and
are of the right quality. Control facilitates the task of manufacturing and
see that every theme goes as per the plan.
see that every theme goes as per the plan.
Definition:-
Definition:-
"Production control refers to ensuring that all which occurs is in
"Production control refers to ensuring that all which occurs is in
accordance with the rules established and instructions issued.“
accordance with the rules established and instructions issued.“
-HENRY FAYOL
-HENRY FAYOL

ESSENTIAL STEPS FOR
ESSENTIAL STEPS FOR
CONTROL PROCESS
CONTROL PROCESS
1.
1. Initiation the production
Initiation the production
2.
2. Progressing
Progressing
3.
3. Corrective action based up on the feed back
Corrective action based up on the feed back

CONTROL
CONTROL
1.To implement production plans by issuing
orders to those who are supposed to implement
them.
2.To ensure that various inputs like men,
machine, materials etc. are available in the
required quantity and quality.
3.Making efforts to adhere to the production
schedules.
4.To ensure that goods are produced according
to the prescribed standards and quality norms.

5.To undertake the best and most economic
production policies.
6.To introduce a proper system of quality
control.
7.To ensure rapid turnover of production and
minimizing of inventories of raw materials and
finished products.

SCOPE OF PRODUCTION
SCOPE OF PRODUCTION
CONTROL
CONTROL
1.
1. Control of planning
Control of planning
2.
2. Control of tooling
Control of tooling
3.
3. Control of materials
Control of materials
4.
4. Control of activities
Control of activities
5.
5. Control of material handling
Control of material handling
6.
6. Control of information
Control of information
7.
7. Control of quantity
Control of quantity
8.
8. Control of due dates
Control of due dates
9.
9. Control of quality
Control of quality
10.
10. Control of manufacturing capacity
Control of manufacturing capacity

CONTROL
CONTROL
Meaning:-
Production planning and control is concerned with directing
production along the lines set by the planning department.
Definition:-
"Production planning and control is the co-ordination of series of
functions according to a plan which will economically utilize the
plant facilities and regulate the orderly movement of goods through
the entire manufacturing cycle from the procurement of all
materials to the shipping of finished goods at a predetermined rate."

PHASES OF PRODUCTION
PHASES OF PRODUCTION
PLANNING AND CONTROL
PLANNING AND CONTROL
1.
1. PRE – PLANNING PHASE
PRE – PLANNING PHASE
2.
2. PLANNING PHASE
PLANNING PHASE
3.
3. CONTROL PHASE
CONTROL PHASE


Micro planning
Micro planning

Analysis of data
Analysis of data

Out line of basic planning (Demand , Market
Out line of basic planning (Demand , Market
analysis, and product design and development)
analysis, and product design and development)

Pre planning concern with 4’M’s
Pre planning concern with 4’M’s
Material, Machine, Methods, Manpower
Material, Machine, Methods, Manpower

Pre planning contents are given below:
Pre planning contents are given below:

PRE PLANNING CONTENTS
PRE PLANNING CONTENTS
1.
1. Product development and design
Product development and design
2.
2. Process design
Process design
3.
3. Work station design
Work station design
4.
4. Sales forecasting
Sales forecasting
5.
5. Estimating
Estimating
6.
6. Factory outlet and location
Factory outlet and location
7.
7. Equipment policy
Equipment policy
8.
8. Pre – planning production
Pre – planning production

2. PLANNING PHASE
2. PLANNING PHASE
 Analysis of 4’M’s (Material, Machine,
Analysis of 4’M’s (Material, Machine,
Methods, Manpower) to undertake the above
Methods, Manpower) to undertake the above
“M”s
“M”s

Phase for Planning, Estimating, & Scheduling
Phase for Planning, Estimating, & Scheduling

Short-term planning
Short-term planning
 Long-term planning
Long-term planning

3. CONTROL PHASE
3. CONTROL PHASE

This involves Dispatching, Inspection,
This involves Dispatching, Inspection,
Expediting, and evaluation.
Expediting, and evaluation.
 Control of scrap, control of transportation.
Control of scrap, control of transportation.

Feed back information for the corrective
Feed back information for the corrective
actions.
actions.

FUNCTIONS OF PPC
FUNCTIONS OF PPC

MATERIAL PLANNING
MATERIAL PLANNING(Batch, delivery
(Batch, delivery
rates, etc,.)
rates, etc,.)

METHODS PLANNING
METHODS PLANNING(Identify the
(Identify the
alternate methods and select the best methods)
alternate methods and select the best methods)

MACHINES AND EQUIPMENT
MACHINES AND EQUIPMENT(Tools and
(Tools and
machines checking for requirements)
machines checking for requirements)
 PROCESS PLANNING
PROCESS PLANNING(Sequence of
(Sequence of
operation in the production)
operation in the production)
 ESTIMATING
ESTIMATING (Production orders and
detailed root sheets)

 SCHEDULING AND LOADING (Fixing priorities and
machine loading)
 DISPATCHING (Release the orders for customers)
 EXPENDITING(Tracking of the progress of work
according to the planned schedule)
 INSPECTION AND TESTING (Quality of the products
meet the specification)
 EVALUATION ( Link between the control and future
planning)

PRODUCTION SYSTEM
PRODUCTION SYSTEM
 PRODUCTION – sequence of operations
PRODUCTION – sequence of operations
 Transform given materials to desired products.
Transform given materials to desired products.

Combination of different manufacturing
Combination of different manufacturing
process.
process.

SYSTEM- Logical arrangement of
SYSTEM- Logical arrangement of
components according to the plan.
components according to the plan.
 PRODUCTION SYSTEMS- Inputs to outputs.
PRODUCTION SYSTEMS- Inputs to outputs.

TYPES OF PRODUCTION
TYPES OF PRODUCTION
SYSTEMS
SYSTEMS
1.
1. Job shop production
Job shop production (units of customer orders)
(units of customer orders)
2.
2. Batch production
Batch production(Small batches in large variety)
(Small batches in large variety)
3.
3. Mass production
Mass production( Large quantities of products)
( Large quantities of products)
4.
4. Process or continuous production
Process or continuous production (Manufacture
(Manufacture
the products where the demand is high)
the products where the demand is high)

PRODUCT DESIGN AND
PRODUCT DESIGN AND
DEVELOPMENT
DEVELOPMENT

PRODUCT DESIGN:
PRODUCT DESIGN:

It deals with FORM and FUNCTION
It deals with FORM and FUNCTION
 FORM- Shape and Appearance
FORM- Shape and Appearance
 FUNCTION- Working of the product.
FUNCTION- Working of the product.

PRODUCT DEVELOPMENT:
PRODUCT DEVELOPMENT:

Devising the product to meet the changing requirements
Devising the product to meet the changing requirements
of the market (UPDATION)
of the market (UPDATION)

PRODUCT ANALYSIS
PRODUCT ANALYSIS
 Objectives of product analysis to obtain the
Objectives of product analysis to obtain the
qualitative and quantitave products influencing
qualitative and quantitave products influencing
factors to success of manufacturing products.
factors to success of manufacturing products.

FACTORS INFLUENCING PRODUCT ANALYSIS:
FACTORS INFLUENCING PRODUCT ANALYSIS:
1.
1. Marketing aspects
Marketing aspects
2.
2. Product characteristics
Product characteristics
1.
1. Functional aspects
Functional aspects
2.
2. Operational aspects
Operational aspects
3.
3. Durability and dependability
Durability and dependability
4.
4. Aesthetic aspects
Aesthetic aspects

3. Economic analysis
3. Economic analysis
4. Production aspects( Design for Manufactures)
4. Production aspects( Design for Manufactures)
1.Guidelines for general approach for DPM
1.Guidelines for general approach for DPM
2. Guidelines for the selection of production
2. Guidelines for the selection of production
process
process
3. Guidelines for particular process
3. Guidelines for particular process
4. Guidelines for assembly
4. Guidelines for assembly

BASIC PRINCIPLES OF PRODUCT
BASIC PRINCIPLES OF PRODUCT
DEVELOPMENT(PRODUCT DEVELOPMENT
DEVELOPMENT(PRODUCT DEVELOPMENT
TECHNIQUES) (16 mark)
TECHNIQUES) (16 mark)

Standardisation
Standardisation
 Simplification
Simplification

Specilisation
Specilisation
 Diversification
Diversification

Miniaturisation, etc.
Miniaturisation, etc.

STANDARDISATION
STANDARDISATION
 Setting up standards
Setting up standards
 Measuring by Quality, Quantity, Value,
Measuring by Quality, Quantity, Value,
Peformance
Peformance
 Definition:
Definition:

Process of defining and
Process of defining and applying the conditions
applying the conditions
necessary to ensure that
necessary to ensure that given range of
given range of
requirements
requirements can normally be
can normally be met with a
met with a
minimum variety
minimum variety and in a
and in a reproducible and
reproducible and
economic manner based on current techniques
economic manner based on current techniques.
.

STANDARDISATION
STANDARDISATION

It means fixation of size, shape, quality and
It means fixation of size, shape, quality and
manufacturing process
manufacturing process

Example: shaving blades, television etc.,
Example: shaving blades, television etc.,

It applicable for all factors such as, Men machines
It applicable for all factors such as, Men machines
and materials
and materials

It is an instrument to maximum variety of
It is an instrument to maximum variety of
products
products
 Standardization implies non-standard items are
Standardization implies non-standard items are
not to be manufactured expect when customers
not to be manufactured expect when customers
order especially
order especially

OBJECTIVES OF STANDARDISATION
OBJECTIVES OF STANDARDISATION
1.
1. To achieve maximum overall economy by,
To achieve maximum overall economy by,
1.
1. Cost
Cost
2.
2. Human effort
Human effort
3.
3. Materials
Materials
2.
2. Maximum use of changing( repair)
Maximum use of changing( repair)
3.
3. To adopt best possible solutions
To adopt best possible solutions
4.
4. To define the levels of quality
To define the levels of quality
5.
5. To exchange goods by national and international
To exchange goods by national and international
levels (because of standardisation)
levels (because of standardisation)

CLASSIFICATION OF STANDARDISATION
1.
1. Basic Standardizations( weight, voltages , numbers, sizes )
Basic Standardizations( weight, voltages , numbers, sizes )
2.
2. Dimensional standardization (Nuts, Bolts)
Dimensional standardization (Nuts, Bolts)
3.
3. Material standardization (Raw materials , coolants,
Material standardization (Raw materials , coolants,
Lubricants)
Lubricants)
4.
4. Equipment standardisation (Specifications , performance,
Equipment standardisation (Specifications , performance,
ratings)
ratings)
5.
5. Process standardisation (Maximum benefit and cheapness
Process standardisation (Maximum benefit and cheapness
in production)
in production)

6.
6. Quantity standardisation (Decided earlier based up on
Quantity standardisation (Decided earlier based up on
dealer)
dealer)
7.
7. Safety measures standardization ( Rules and
Safety measures standardization ( Rules and
regulations)
regulations)
8.
8. Personnel standardisation (Workers selection ,
Personnel standardisation (Workers selection ,
training, wages rates)
training, wages rates)
9.
9. Administrative standardisation (Office methods and
Administrative standardisation (Office methods and
procedures)
procedures)

BENEFITS OF STANDARDISATION
BENEFITS OF STANDARDISATION
1.
1. Reduction in material waste.
Reduction in material waste.
2.
2. Reduction in manufacturing cost per unit
Reduction in manufacturing cost per unit
automatically reduces cost of the product.
automatically reduces cost of the product.
3.
3. Uniform quality of product
Uniform quality of product
4.
4. Reduce servicing , replacement and
Reduce servicing , replacement and
maintenance of parts
maintenance of parts
5.
5. Better and quicker service deliveries
Better and quicker service deliveries

LIMITATIONS OF STANDARDISATION
LIMITATIONS OF STANDARDISATION
1.
1. Reduced choice of customers because reduce
Reduced choice of customers because reduce
variety
variety
2.
2. Changes in product design or new product design
Changes in product design or new product design
may take a very long time
may take a very long time
3.
3. Standardisation of operations and procedure will
Standardisation of operations and procedure will
reduce interest of workers
reduce interest of workers

SIMPLIFICATION
SIMPLIFICATION

Simplification is the process of reducing the
Simplification is the process of reducing the
variety of products manufactured
variety of products manufactured

Elimination of excessive and un desirable waste
Elimination of excessive and un desirable waste
for achieve economy
for achieve economy

It reduction in
It reduction in

Product range
Product range

Assembly and
Assembly and

Parts
Parts
 Other wise called as “PRODUCT LINE
Other wise called as “PRODUCT LINE
CONTRACT”
CONTRACT”

CONSIDERATION IN
CONSIDERATION IN
SIMPLIFICATION
SIMPLIFICATION
 Before simplifying any product
Before simplifying any product

Simplification should done effectively for the
Simplification should done effectively for the
given product
given product
 How many simplification will affect customer
How many simplification will affect customer
demand?
demand?
 Does market competition permit simplification ?
Does market competition permit simplification ?

EFFECT OF
EFFECT OF
SIMPLIFICATION
SIMPLIFICATION

BENEFITS OF
BENEFITS OF
SIMPLIFICATION
SIMPLIFICATION
1.
1. Reduce manufacturing operations
Reduce manufacturing operations
2.
2. Possible effective utilisation
Possible effective utilisation
3.
3. Simplifies production planning and
Simplifies production planning and
supervision
supervision
4.
4. Lower manufacturing costs and higher sales
Lower manufacturing costs and higher sales
5.
5. Provides quick delivery
Provides quick delivery

LIMITATIONS OF
LIMITATIONS OF
SIMPLIFICATION
SIMPLIFICATION
 Cannot satisfy wide range of demand
Cannot satisfy wide range of demand
 Cannot enable better contact in demand to
Cannot enable better contact in demand to
satisfy taste
satisfy taste
 It cannot create demand
It cannot create demand

SPECIALISATION
SPECIALISATION
 Name itself shows specialization means
Name itself shows specialization means
EXPERT In particular product line, instead of
EXPERT In particular product line, instead of
diversion.
diversion.

Concentrate limited number of products in a
Concentrate limited number of products in a
particular area.
particular area.

Combination of simplification and
Combination of simplification and
standardisation leads specialisation.
standardisation leads specialisation.

ADVANTAGES AND DISADVANTAGES OF
SPECIALISATION
1.
1. Better utilization of equipments
Better utilization of equipments
2.
2. Higher productivity
Higher productivity
3.
3. Greater efficiency
Greater efficiency
4.
4. Better quality
Better quality
5.
5. Use of Standardized methods
Use of Standardized methods
DIS ADVANTAGES:
DIS ADVANTAGES:
1.
1. Lesser flexibility
Lesser flexibility
2.
2. Same work in special loss of
Same work in special loss of
initiative(Invention)
initiative(Invention)

ECONOMIC ANALYSIS
ECONOMIC ANALYSIS
 Management decision in product decision policy.
Management decision in product decision policy.

Capital expenditure in terms of fixed and variable
Capital expenditure in terms of fixed and variable
costs
costs
 Production cost per price
Production cost per price

Price (cost+profit)
Price (cost+profit)
 Quantity manufactured
Quantity manufactured
 Requirements of direct and indirect materials
Requirements of direct and indirect materials

PROFIT CONSIDERATION
PROFIT CONSIDERATION
1.
1. PURE PRICING STRATERGY
PURE PRICING STRATERGY

Increase the total profit by increasing the profit
Increase the total profit by increasing the profit
by unit price.
by unit price.
 Sales volume remain same total profit would
Sales volume remain same total profit would
proportional to increase the margin profit
proportional to increase the margin profit
 Due to the competitors products ,profit may
Due to the competitors products ,profit may
shrink.
shrink.

2.
2. MARKETING STRATERGIES
MARKETING STRATERGIES

Through design, advertisement and pricing
Through design, advertisement and pricing
 More attractive product by reducing costs
More attractive product by reducing costs
 Too low margin cause in stabilities in market
Too low margin cause in stabilities in market
3.
3. REDUCTION IN HOUSE PRODUCTION
REDUCTION IN HOUSE PRODUCTION
COSTS:
COSTS:
 Increase the total profit by reducing the total
Increase the total profit by reducing the total
production costs
production costs

BREAK - EVEN ANALYSIS
BREAK - EVEN ANALYSIS
(8 mark)
(8 mark)
 It is otherwise called as Cost volume profit
It is otherwise called as Cost volume profit
analysis
analysis
 It deals with Company's Sales , profit, and
It deals with Company's Sales , profit, and
Costs
Costs

Simple method of presenting to management
Simple method of presenting to management
the effect of changes in volume of production.
the effect of changes in volume of production.

AIMS OF BREAK EVEN
AIMS OF BREAK EVEN
ANALYSIS
ANALYSIS
 Help to deciding profitable level of output
Help to deciding profitable level of output
 To take decision regarding make or buy
To take decision regarding make or buy

To decide product mix or promotion mix
To decide product mix or promotion mix
 To take plant expansions decisions
To take plant expansions decisions
 To indicate margin of safety
To indicate margin of safety

To compare a number of business enterprise
To compare a number of business enterprise

ASSUMPTIONS OF BREAK
ASSUMPTIONS OF BREAK
EVEN ANALYSIS
EVEN ANALYSIS
 Selling price remain constant for all sales( no
Selling price remain constant for all sales( no
discount)
discount)
 Relation ship between sales volume and costs
Relation ship between sales volume and costs
 Assumes it as Fixed and variable costs
Assumes it as Fixed and variable costs

Production is equal to sales
Production is equal to sales

DETERMINATION OF BREAK
DETERMINATION OF BREAK
EVEN POINT
EVEN POINT
1.
1. THE ALGEBRIC METHOD
THE ALGEBRIC METHOD
2.
2. THE GRAPHICAL METHOD
THE GRAPHICAL METHOD
THE ALGEBRIC METHOD
THE ALGEBRIC METHOD
Total costs= fixed cost + variable costs
Total costs= fixed cost + variable costs
Break even Quantity= FIXED COSTS by
Break even Quantity= FIXED COSTS by
(SELLING PRICE – VARIABLE COSTS)
(SELLING PRICE – VARIABLE COSTS)

2) THE GRAPHICAL METHOD
2) THE GRAPHICAL METHOD
It is break even chart Graphical representation of
It is break even chart Graphical representation of
relation ship between Cost and revenue at given
relation ship between Cost and revenue at given
time.
time.

ECONOMICS OF A NEW PRODUCT DESIGN
(SAMUEL EILON MODEL)
 When launching of a new design or model, a
When launching of a new design or model, a
careful analysis of a proposed project.
careful analysis of a proposed project.
 Introduction of the new model to the market.
Introduction of the new model to the market.
 To increase the profit of the organization.
To increase the profit of the organization.

To avoid decline the sales of execution due to stiff
To avoid decline the sales of execution due to stiff
competition
competition
PIE = (PROFIT + FIXED COSTS) by (QUANITY
PIE = (PROFIT + FIXED COSTS) by (QUANITY
SOLD).
SOLD).

PRODUCTION PLANNING AND CONTROL--UNIT-I- INTRODUCTION to PPC

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