Production Planning &

Management
Module 1
INTRODUCTION-MEANING, FEATURES, OBJECTIVES, SCOPE,
FUNCTIONS, DECISIONS, PRODUCTION SYSTEM-TYPES, ROLE
OF PRODUCTION MANAGER, BENEFITS OF GOOD PRODUCTION
MANAGEMENT

Introduction to Production Management

Production/operations management is the process,

which combines and transforms various resources used

in the production/operations subsystem of the
organization into value added product/services in a
controlled manner as per the policies of the
organization.
It is that part of an organization, which is concerned
with the transformation of a range of inputs into the
required (products/services) having the requisite
quality level.

The set of interrelated management activities, which

are involved in manufacturing certain products, is

called as production management.
If the same concept is extended to services

management, then the corresponding set of

management activities is called as operations
management

Concept Of Production
Production is defined as the step-by-step conversion

of one form of material into another form through

chemical or mechanical process to create or enhance
the utility of the product to the user.
Inputs:
Men
Material
Machine
Information
Capital

Transformational Process
Product Design
Process Planning
Production Control
Maintenance

Continuous
Inventory
Quality
Cost

Output
Product
Services

Production System
The production system of an organization is that part,

which produces products of an organization. It is that

activity whereby resources, flowing within a defined
system, are combined and transformed in a controlled
manner to add value in accordance with the policies
communicated by management.

Characteristics of Production System

The production system has the following characteristics:
1. Production is an organized activity, so every
production system has an objective.
2. The system transforms the various inputs to useful
outputs.
3. It does not operate in isolation from the other
organization system.
4. There exists a feedback about the activities, which is
essential to control and improve system performance.

Classification of Production System

P
R
O
D
U
C
T
I
O
N
V
O
L
U
M
E

Continuous Production

Mass Production

Batch Production

Job Shop Production

Output/Product Varity

JOB SHOP PRODUCTION

Job

shop
production
are
characterized
by
manufacturing of 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.

Characteristics of Job Shop Production

The Job-shop production system is followed when there

is:
High variety of products and low volume.
Use of general purpose machines and facilities.
Highly skilled operators who can take up each job as a
challenge because of uniqueness.
Large inventory of materials, tools, parts.
Detailed planning is essential for sequencing the
requirements of each product, capacities for each work
centre and order priorities.

BATCH PRODUCTION
Batch production is defined by American Production

and Inventory Control Society (APICS) as a form of

manufacturing in which the job passes 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.

Characteristics of Batch Production

When there is shorter production runs.
When plant and machinery are flexible.
When 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.
When manufacturing lead time and cost are lower as

compared to job order production.

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.

Characteristics of Mass Production

Standardization of product and process sequence.
Dedicated special purpose machines having higher

production capacities and output rates.

Large volume of products.
Shorter cycle time of production.
Lower in process inventory.
Perfectly balanced production lines.
Flow of materials, components and parts is continuous
and without any back tracking.
Production planning and control is easy.
Material handling can be completely automatic

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.

Characteristics of Continuous Production

Dedicated plant and equipment with zero flexibility.
Material handling is fully automated.
Process follows a predetermined sequence of

operations.
Component materials cannot be readily identified with

final product.
Planning and scheduling is a routine action.

Objectives of Production Management

RIGHT QUALITY
The quality of product is established based upon the
customers needs. The right quality is not necessarily
best quality. It is determined by the cost of the
product and the technical characteristics as suited to
the specific requirements.
RIGHT QUANTITY
The manufacturing organization should produce the
products in right number. If they are produced in
excess of demand the capital will block up in the form
of inventory and if the quantity is produced in short of
demand, leads to shortage of products.

RIGHT TIME
Timeliness of delivery is one of the important
parameter to judge the effectiveness of production
department. So, the production department has to make
the optimal utilization of input resources to achieve its
objective.
RIGHT MANUFACTURING COST
Manufacturing costs are established before the product
is actually manufactured. Hence, all attempts should be
made to produce the products at pre-established cost,
so as to reduce the variation between actual and the
standard (pre-established) cost.

SCOPE OF PRODUCTION AND OPERATIONS

MANAGEMENT
Location of facilities
Plant layouts and material handling
Product design
Process design
Production and planning control
Quality control
Materials management
Maintenance management

LOCATION OF FACILITIES- Location of facilities for

operations is a long-term capacity decision which involves

a long term commitment about the geographically static
factors that affect a business organization. It is an
important strategic level decision-making for an
organization.
PLANT LAYOUT AND MATERIAL HANDLING Plant
layout refers to the physical arrangement of facilities. It is
the configuration of departments, work centers and
equipment in the conversion process. The overall objective
of the plant layout is to design a physical arrangement that
meets the required output quality and quantity most
economically.

PRODUCT

DESIGN-Product design deals with

conversion of ideas into reality. Every business
organization have to design, develop and introduce new
products as a survival and growth strategy. Developing
the new products and launching them in the market is
the biggest challenge faced by the organizations. The
entire process of need identification to physical
manufactures of product involves three functions:
marketing, product development, manufacturing.

PROCESS

DESIGN- Process design is a

macroscopic decision-making of an overall process
route for converting the raw material into finished
goods. These decisions encompass the selection of a
process, choice of technology, process flow analysis
and layout of the facilities. Hence, the important
decisions in process design are to analyze the
workflow for converting raw material into finished
product and to select the workstation for each
included in the workflow.

PRODUCTION PLANNING AND CONTROL

Production planning and control can be defined as

the process of planning the production in advance,
setting the exact route of each item, fixing the
starting and finishing dates for each item, to give
production orders to shops and to follow up the
progress of products according to orders.

Planning-is deciding in advance what to do, how to do it, when to do it and who is to do it.

Planning bridges the gap from where we are, to where we want to go. It makes it possible for
things to occur which would not otherwise happen.

Routing may be defined as the selection of path which each part of the product will follow,

which being transformed from raw material to finished products. Routing determines the
most advantageous path to be followed from department to department and machine to
machine till raw material gets its final shape.

Scheduling- determines the programmed for the operations. Scheduling may be defined as

the fixation of time and date for each operation as well as it determines the sequence of
operations to be followed.

Dispatching is concerned with the starting the processes. It gives

necessary authority so as to start a particular work, which has already

been planned under Routing and Scheduling. Therefore, dispatching
is release of orders and instruction for the starting of production for
any item in acceptance with the route sheet and schedule charts.
QUALITY CONTROL- Quality Control (QC) may be defined as a

system that is used to maintain a desired level of quality in a product

or service. It is a systematic control of various factors that affect the
quality of the product. Quality control aims at prevention of defects at
the source, relies on effective feed back system and corrective action
procedure.

MATERIALS MANAGEMENT- Materials management

is that aspect of management function which is primarily

concerned with the acquisition, control and use of materials
needed and flow of goods and services connected with the
production process having some predetermined objectives
in view.
MAINTENANCE MANAGEMENT- In modern industry,

equipment and machinery are a very important part of the

total productive effort. Therefore, their idleness or
downtime becomes are very expensive. Hence, it is very
important that the plant machinery should be properly
maintained.

 Operation managers are required to make a series of

decisions in the production function.

The decisions made by operation managers about the

activities of production systems tend to fall into three

general categories, viz.,
i.
ii.
iii.

Strategic decisions
Operating decisions
Control decisions

Importance of Production Function

Production

function can offer competitive

advantage to a firm in the following areas:

Shorter new-product-lead time

More inventory turns
Shorter manufacturing lead time
Higher quality
Greater flexibility
Better customer service
Reduced wastage

Production Management and Operations

Management
Production management refers to the application of

management principles to the production function in a

factory. In other words, production management
involves application of planning, organizing, directing
and controlling to the production process.

Operations

management is the process in which

resources/inputs are converted into more useful products

Production management and operations management are

differentiated based
goods/services

on

tangibility

of

finished

Characteristics of Modern Production

and Operations Function

1.
2.
3.
4.

Manufacturing as Competitive AdvantageServices Orientation

Disappearance of Smokestacks
Small has Become Beautiful

Recent Trends in Production/Operations

management

Global Market Place

Production/Operations Strategy

Total Quality Management (TQM)

Flexibility

Time Reduction

Technology

Worker Involvement

Re-engineering

Environmental Issues

Corporate Downsizing (or Right Sizing)

Supply-Chain Management

Lean Production

Duties and responsibilities of production

managers in manufacturing organisation
Planning the geographical

location of the factory

Purchasing production
equipments
Layout of equipments within
the factory
Designing production process
and equipments
Product design
Designing production work and
establishing work standards
Capacity planning
Production planning and
scheduling

Production control
Inventory management
Supply chain management
Quality control
Production equipments
maintenance and repairs
Industrial relations
Health and safety
Staff selection
Budget and capacity
planning

Emerging Role of the production and

operations manager
Take part in strategic decision making of the company.
Take part in the implementation and use of enterprise

resource planning in the company.

Automation process as per the requirements of the
company.
Enhance the research and development efforts in
developing self relevant new technologies.
Reduce lag in implementing environment and pollution
norms established by the government from time to time.
Act as a member of the concurrent engineering teams in
new product design and old product development
Long term strategic relationship with supplies by acting as
supply chain mgmt.

Emerging Role of the production and

operations manager
Give more attention to technology management, in

view of joint venture of multinational companies

with domestic companies.
Be an internal quality auditor in quality certification
programming such as ISO certification