Production Planning and

Control

Presented by: Anishek Poudel

Production is the process by which goods and services are created. It can also be defined as a
means of converting raw materials into finished products by performing a set of manufacturing
operations in a pre-determined sequence that done in one or in a combination of the following
ways.
 Transformation by integration.
 Transformation by assembly.

Planning means preparing the scheme in advance before the actual work is started. It may be
defined as the predetermination of future achievement to meet the desired objectives. Planning
begins with an analysis of the given data on how the desired target may be most effectively
attained. Planning in facts set up the standards of performance.

Controlling means the supervision of all the relevant operations with the help of control
mechanism that feed back the progress of the work. Controlling is made by comparing the
actual performance with the present standards (plans) and deviations are analyzed. The control
mechanism is also responsible for subsequently adjusting, modifying and redefining plans and
targets, in order to ensure attainment of pre-specified production goals, in the most efficient and
effective manner.
Production planning and control may be defined as the direction and coordination of the firm’s
material and physical facilities towards the attainment of pre-specified goals, in the most
efficient and economical manner.

The various functions of production planning and control can be classified into three main
categories or phases as follows:
1. Planning phase
i. Prior planning
a) Forecasting
b) Order writing
c) Product design
ii. Action planning
a) Process planning and routing
b) Material control
c) Tool control
d) Loading
e) scheduling
 2. Action phase - Producing and Dispatching
3. Control phase
i. Progress reporting
a) Data collection
b) Data interpretation
ii. Corrective action
a) Expediting
b) Replanning
Production system
 A collection of workstations that perform operations such as manufacturing, assembly,
inspection, finishing, testing, etc. to create products.
Production system design
 The general arrangement of workstations, dictating the pattern of flow of the products, and
the resource requirements at each workstation.
 Workstation
 A collection of machines/operators that perform the same operation for the same set of
products.
 A machine/operator may be:
• An automated machine
• A machine operated by a human
• A human operator performing a manual operation The production systems to be addressed
are discrete part production systems
 Each part produced is a distinct entity
• Vehicle, computer, hamburger, etc.
 This is in contrast to continuous goods production such as fluids, powders, etc.
• Often in the domain of chemical process engineers Thus, the product being produced will be
referred to generically as a part or job.
The different types of production system are:
1. Job production 2. Batch production 3. Continuous production
 Forecasting is an interference of what is likely to happen in the future. It is not absolutely
certain prophesy but is fundamental to management.
 The basic forecasting techniques are
I. Qualitative techniques
a. The Delphi method. b. Market survey. c. Sales force composite. d. Executive judgment.

II. Quantitative (time series models) techniques

a. Naive b. Moving average c. Exponential smoothing

III. Casual quantitative techniques

a. Regression analysis. b. Correlation analysis.
 I. Qualitative techniques
Executive Judgment:
Opinion of a group of high level experts or managers is pooled.

Sales Force Composite:

Each regional salesperson provides his/her sales estimates. Those forecasts are then reviewed
to make sure they are realistic. All regional forecasts are then pooled at the district and
national levels to obtain an overall forecast. Market

Research/Survey:
Solicits input from customers pertaining to their future purchasing plans. It involves the use of
questionnaires, consumer panels and tests of new products and services.
 Delphi Method:
As opposed to regular panels where the individuals involved are in direct communication, this
method eliminates the effects of group potential dominance of the most vocal members. The
group involves individuals from inside as well as outside the organization. Typically, the
procedure consists of the following steps:
Each expert in the group makes his/her own forecasts in form of statements
 The coordinator collects all group statements and summarizes them
 The coordinator provides this summary and gives another set of questions to each group
member including feedback as to the input of other experts.
 The above steps are repeated until a consensus is reached.
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Inventory control
Inventory is defined as the list of movable goods which helps directly or indirectly in the
production for sale. Inventory is a service to production. It is just a sort of investment in
the form of raw materials, tools, gauges, supplies etc.
Classification of inventories
1. Direct inventories
a. Raw materials.
b. In process inventories (work in progress).
c. Purchased parts.
d. Finished goods.
2. Indirect inventories
a. Tools (standard and hand tools).
b. Supplies (miscellaneous).
Inventory control may be defined as the scientific method of finding how much stock
should be maintained in order to meet the production demands and be able to provide right
type of material at right time in the right quantities and at competitive price.
 5.6 Network Technique:
The schedules based on above criteria can be prepared with the help of following techniques:
1. CPM
2. PERT

 The Critical Path Method or Critical Path Analysis, is a mathematically based algorithm for
scheduling a set of project activities.
 It is commonly used with all forms of projects, including construction, software
development, research projects, product development, engineering, and plant maintenance,
among others. Any project with interdependent activities can apply this method of
scheduling.
Definitions
 Event
An event is a specific instant of time which indicates the beginning or end of the activity.

 Activity
An activity is any time or resource consuming part of the project which has definable start and
finish.
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Program Evaluation and Review Technique (PERT):
 PERT is mainly concerned with events and it is thus event oriented system .
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5.7 Definition and Concept of Quality, Quality Control and Quality Assurance:

 Quality refers to the standard or degree of excellence of something, encompassing its

characteristics, features, or attributes that fulfill or exceed the expectations of its users or
consumers.
 It's a multidimensional concept that involves various aspects such as performance,
durability, reliability, aesthetics, safety, and conformance to specifications or standards.

However, some common principles and dimensions associated with quality include:

1. Fitness for Purpose: The extent to which a product or service meets the needs and
requirements of its intended users or customers. This involves functionality, usability,
and suitability for the intended use.

2. Conformance to Requirements: Ensuring that a product or service adheres to specified

standards, regulations, or customer expectations. This involves consistency and compliance
with established criteria or specifications.
5.7 Definition and Concept of Quality, Quality Control and Quality Assurance:

3. Reliability: The ability of a product or service to perform consistently and predictably

under normal conditions over a specified period of time. Reliability reflects the absence of
defects or failures and is crucial for building trust and confidence among users.

4. Durability: The longevity or resistance to wear, deterioration, or damage over time.

Durability is essential for ensuring that products maintain their performance and quality
throughout their expected lifespan.

5. Performance: The ability of a product or service to deliver the intended results or

outcomes efficiently and effectively. This includes aspects such as speed, accuracy,
precision, and capacity.

6. Aesthetics: The visual appeal, design, and attractiveness of a product or service. Aesthetic
quality influences perceptions of value, brand image, and user satisfaction.
5.7 Definition and Concept of Quality, Quality Control and Quality Assurance:

7. Safety: Ensuring that a product or service does not pose any risks or hazards to users or
the environment during its use, handling, or disposal. Safety is a critical aspect of quality,
particularly for products or services with potential safety implications.

8. Customer Satisfaction: The degree to which a product or service meets or exceeds

customer expectations and preferences. Customer satisfaction is a key indicator of quality
and is often measured through feedback, surveys, and ratings.
5.7 Definition and Concept of Quality, Quality Control and Quality Assurance:
 Quality control (QC) is a process used in manufacturing, production, and service
industries to ensure that products or services meet specified requirements and standards.
It involves monitoring and inspecting various aspects of the production process to
identify and correct any deviations or defects that may occur.
 The goal of quality control is to maintain consistency and reliability in the final output,
thereby ensuring customer satisfaction and compliance with regulatory standards.
The concept of quality control revolves around several key principles:
• Standards and Specifications: Quality control begins with establishing clear standards
and specifications for the product or service. These standards outline the desired
attributes, characteristics, and performance criteria that must be met.
• Quality Assurance: Quality control is part of a broader framework of quality assurance
(QA), which encompasses all activities and processes aimed at ensuring that quality
requirements are met. QA involves planning, implementing, and evaluating quality
control measures to prevent defects and non-conformities.
• Process Monitoring: Quality control involves continuous monitoring and measurement of
various stages of the production process to identify any deviations from the established
standards.
5.7 Definition and Concept of Quality, Quality Control and Quality Assurance:
• Corrective Action: When deviations or defects are detected, quality control procedures
dictate taking appropriate corrective action to address the issues and prevent their
recurrence. This may involve adjusting processes, reworking defective products, or
implementing procedural changes.
• Documentation and Record-keeping: Quality control activities are typically well-
documented, with records maintained to track inspection results, corrective actions taken,
and any other relevant information. Documentation is essential for traceability, analysis,
and continuous improvement efforts.
• Continuous Improvement: Quality control is not a one-time activity but rather an
ongoing process of improvement. Feedback from quality control activities is used to
identify opportunities for enhancing processes, reducing defects, and optimizing product
quality over time.
5.7 Definition and Concept of Quality, Quality Control and Quality Assurance:
 Quality assurance (QA) is a systematic process implemented within an organization to ensure that products
or services meet specified quality standards and fulfill customer expectations. It involves creating and
maintaining processes and procedures to prevent defects and errors in the development, manufacturing, or
delivery of products or services.
Key components of quality assurance include:
• Quality Planning: Establishing quality objectives and determining the processes required to deliver
products or services that meet those objectives.
• Quality Control: Monitoring and inspecting processes and outputs to ensure they meet predefined quality
standards. This involves activities such as testing, inspection, and measurement.
• Quality Improvement: Continuously analyzing processes and outcomes to identify areas for improvement
and implementing changes to enhance quality.
• Documentation: Maintaining detailed documentation of quality standards, procedures, and results to ensure
transparency and accountability.
• Training and Education: Providing training and education to employees to ensure they understand quality
standards, procedures, and their roles in maintaining quality.
• Auditing: Conducting regular audits to assess adherence to quality standards and identify areas for
improvement
 5.8 Definition and concept of productivity:
 Productivity refers to the measure of efficiency by which inputs (such as labor, capital, materials, or energy) are converted
into outputs (goods or services). It reflects the ratio between the amount of output produced and the amount of input
required to produce it. Essentially, productivity measures how effectively resources are utilized to generate desired results.
 Measurement of productivity:
Productivity can be measured using various methods and metrics, depending on the context and the specific inputs and
outputs being considered. Here are some common ways to measure productivity:
• Labor Productivity: This measures the output produced per unit of labor input. It is often calculated as:
Labor Productivity = Output / Labor Input
Output can be measured in terms of units produced, services delivered, revenue generated, etc. Labor input is typically
measured in terms of hours worked, number of employees, or labor costs.

• Capital Productivity: This measures the output produced per unit of capital input, which includes machinery, equipment,
and other physical assets. It can be calculated as:
Capital Productivity = Output / Capital Input
Output and capital input are measured similarly to labor productivity, but capital input refers to the value of physical assets
used in production.

• Total Factor Productivity (TFP): TFP measures the efficiency of all inputs combined, including labor, capital, materials,
and energy. It is often calculated as the ratio of total output to the total of all inputs:
TFP = Total Output / (Labor Input + Capital Input + Material Input + Energy Input + ...)

TFP provides a comprehensive measure of overall efficiency and technological progress.

 5.8 Definition and concept of productivity:
Factors affecting productivity
 Technological Advancements: Advances in technology can significantly impact productivity by
streamlining processes, automating tasks, and enabling greater efficiency in production or service
delivery.
 Workforce Skills and Training: The skills, knowledge, and training levels of employees play a vital
role in productivity. Well-trained and skilled workers are often more efficient and effective in their
roles, leading to higher productivity levels.
 Work Environment: Factors such as workplace culture, morale, safety, and ergonomic
considerations can affect productivity. A positive work environment that fosters collaboration,
communication, and employee well-being can contribute to higher productivity levels.
 Management and Leadership: Effective management practices, leadership styles, and organizational
structures can have a significant impact on productivity. Clear goals, effective communication, and
strong leadership can help align employees' efforts toward achieving organizational objectives.
 Resource Allocation: Efficient allocation of resources, including labor, capital, materials, and
technology, is essential for maximizing productivity. Proper planning, budgeting, and resource
management strategies can help optimize resource utilization and minimize waste.
 Innovation and Research and Development (R&D): Investments in innovation, R&D, and product
development can lead to the creation of new products, processes, and technologies that enhance
productivity and competitiveness.
 5.8 Definition and concept of productivity:
Productivity Improvement Techniques
 Performance Measurement and Analysis: Establish clear performance metrics and key performance indicators (KPIs) to
track productivity levels and identify areas for improvement. Regularly analyze performance data to pinpoint inefficiencies
and opportunities for optimization.

 Process Optimization: Streamline workflows and eliminate unnecessary steps or bottlenecks in processes. Conduct process
mapping exercises to identify inefficiencies and implement changes to improve workflow efficiency.

 Technology Adoption: Invest in technology solutions that automate repetitive tasks, improve communication and
collaboration, and enhance operational efficiency. Examples include project management software, customer relationship
management (CRM) systems, and enterprise resource planning (ERP) software.
 Employee Training and Development: Provide ongoing training and development opportunities to enhance employee skills
and knowledge. Invest in cross-training to ensure that employees are proficient in multiple roles and can adapt to changing
business needs.
 Empowerment and Delegation: Empower employees by delegating decision-making authority and providing them with the
autonomy to take ownership of their work. Encourage innovation and creativity by fostering a culture of empowerment
and trust.
 Workplace Flexibility: Implement flexible work arrangements such as telecommuting, flexible scheduling, and remote
work options to accommodate diverse employee needs and preferences. Flexible work arrangements can improve work-
life balance, reduce absenteeism, and boost morale.
 5.8 Definition and concept of productivity:
Productivity Improvement Techniques

Employee Engagement and Recognition: Foster a positive work environment by recognizing and rewarding employee
contributions. Encourage open communication, solicit feedback, and involve employees in decision-making processes to
increase engagement and motivation.

Continuous Improvement Initiatives: Implement lean manufacturing principles, Six Sigma methodologies, or other
continuous improvement frameworks to systematically identify and eliminate waste, reduce defects, and improve processes.

Supply Chain Optimization: Collaborate closely with suppliers and partners to optimize the supply chain and reduce lead
times, inventory levels, and transportation costs. Implement just-in-time (JIT) inventory management and establish strategic
partnerships to improve supply chain efficiency.

Quality Assurance and Quality Control: Prioritize quality assurance and quality control measures to ensure that products or
services meet or exceed customer expectations. Implement quality management systems, conduct regular inspections, and
solicit customer feedback to continuously improve quality.
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