TXE-409

Production Planning & Control

Introduction to
Production Planning & Control

Sowmitro Lahiri
Lecturer
Department of Textile Engineering
Primeasia University
Contents

Introduction Production Production

Planning Control
Introduction

Production
Planning + Production
Control = Production
Management
 Introduction
Production:
The action of making or manufacturing from components or raw materials, or the process
of being so manufactured. It is the process by which goods or services are created
through a sequence of processes to transform into the desired form.

Transformation Processes
Inputs (Adding value) Outputs
Process Of Transformation

1. Transformation by Disintegration
: One input (raw material) is used to 2. Transformation by Integration :
many inputs are used to produce
produce many types of output. For
only one output. For e.g. many
e.g. Steel (Input) is used to produce different inputs are used to produce
many types of outputs like spoons, a car.
knives, plates, etc.

3. Transformation by Service: the

value of the product is increased by
providing services, for e.g. after sale
service for a TV set.
 Production Planning
It is a technique which helps in planning & scheduling the work in the manufacturing plant to obtain
the desired quality of products with optimum efficiency & at minimum cost.

Men

Method Machine
5 M’s of
Planning

Money Material
 Production Planning

Production planning gives answer to :

1)
2)
3)
What to produce
How much to produce
How to produce
} Product Planning

4)
5)
When to produce
What to be used to produce } Process Planning
 Production Control
Control means the supervision of all the relevant operations with the help of control mechanism that
feeds back the progress of the work. Controlling is made by comparing the actual performance with
present standards and deviations are analyzed.
 Objectives of P.P.C

1. To design a system & plan

2. To ensure efficient utilization of production facilities to maximize productivity
3. To coordinate the production activities of different departments
4. To ensure safe and economical production process
5. To maximize efficiency by proper coordination in production process
6. To ensure proper delivery of goods
7. To place the right man for the right job, at right time for right wages.
8. To minimize labor turnover
9. To reduce the waiting time
Function Of Production Planning & Control
1. Routing
• Sequencing of machines and flow of materials matching to the required product.
• The main objective of routing is to determine the best and cheapest sequence of operations and to
ensure that this sequence is strictly followed.

2. Scheduling
• Determination of time that should be required to perform each operation.
• The main aim is to schedule that amount of work which can easily be handled by plant and equipment
without interference

3. Dispatching
• Transition from planning into action according to scheduling
• Involves movement of materials & tools, beginning of work on each operation, recording time & cost
in each operation, movement of work from one operation to another in accordance.

4. Loading
• Loading of material in the sequence of requirement in the flow to ensure supply of materials
• Loading determines who will do the work as determined in routing and scheduling determines when
it shall be done.
Function Of Production Planning & Control
5. Follow-up
• Determines the progress of work, removing bottlenecks in the flow of work and ensuring that
the production operations are running in accordance with the plans

6. Evaluating
• Evaluating the plan and output to ensure the supply and fulfilling the demand of the market

7. Control
• Maintaining optimum level of inventory to avoid shortage as well as over stocking

8. Corrective Measures
• Involves changing the workloads, repairs & maintenance of machinery or equipment, control
over inventories & monitoring deviation in poor performance of the employees.
 Productivity
Productivity is commonly defined as a ratio between the output volume and the volume of
inputs. In other words, it measures how efficiently production inputs, such as labor and
capital, are being used in an economy to produce a given level of output.
Productivity = output / input (bigger is better)

Single-factor productivity
output / labor hours
output / labor $
sales / sales rep
sales / retail outlet, etc.

Multi-factor productivity
output / (labor + material + overhead)
Single Factor Productivity
Three employees process 600 insurance policies in a week. They work 8 hours per
day, 5 days/week. Calculate the productivity in policies per hour

Labor productivity = Policies Processed

Employee Hours

= 600 Policies
(3 people) x (40 hours/person)

= 5 policies/hour
 Multi Factor Productivity
A team of workers makes 400 units of a product, valued by its standard cost of $10 each (before markups
for other expenses and profit). The accounting department reports that the actual costs are $400 for
labor, $1,000 for materials, and $300 for
overhead. Calculate the productivity.

MFP = Quantity at standard cost

Labor cost + Materials Cost + Overhead cost

(400 units) ($10/unit)

=
$400 + $1000 + $300

$4,000
= = 2.35
$1,700
 Practice Problem
Long Beach Bank employs three loan officers, each working eight hours per day. Each
officer processes an average of five loans per day. The bank’s payroll cost for the officers is
$820 per day, and there is a daily overhead expense of $500.
a. Compute the labor productivity.
b. Compute the multifactor productivity, using loans per dollar cost as the measure.
 Practice Problem
The bank is considering the purchase of new computer software for the loan operation. The software will
enable each loan officer to process eight loans per day, although the overhead expense will increase to
$550.
c. Compute the new labor productivity.
d. Compute the new multifactor productivity.
e. Should the bank proceed with the purchase of the new software? Explain.
 Practice Problem
Modern Lumber, Inc. (MLI) produces apple crates, which it sells to growers. With the current
equipment, MLI produces 240 crates per 100 logs. It currently purchases 100 logs per day,
and each log requires three labor hours to process. MLI is considering the hire of a
professional buyer who can buy better quality logs at the same cost. If this is the case, MLI
can increase production to 260 crates per 100 logs, and the labor hours required will increase
by eight hours per day (for the buyer).
a. Compute the labor productivity for the current method (i.e., no buyer).
b. What will the labor productivity be if MLI hires the professional buyer?
 Practice Problem
Suppose that MLI spends $12 per hour for each worker who constructs the crates. The buyer, however, is
paid $24 per hour. The material cost is $10 per log (regardless of who purchases them).
c. Compute the multifactor productivity for the current method, using crates per dollar cost (labor
+materials) as the measure.
d. How does the multifactor productivity change if the professional buyer is hired?
 Factors Affecting Productivity
Methods Standardization Scrap Rate Labor Turnover
Capital Quality Difference New Worker Workspace Design
Quality Use of Internet Safety Incentive Plan
Technology Computer Virus Shortage of Technical Worker Layoff
Management Search For Lost Object

Use of Productivity:
• To judge performance of industry or country
• To track performance over time
• Serve as scorecards of the effective use of resources
 Productivity Improvement Procedures

 Improving the existing method of plant operation

 Purpose of operation
 Design of part
 Tolerance and specification
 Effective utilization of material
 Process of manufacturing
 Setup & tools
 Work conditions
 Material handling
 Plant layout
THANK YOU