Concepts Related to
production Planning
Topic 4
Introduction
• Production consists of a sequence of operations
that transform materials from a given form to a
desired form (products).
• The highest efficiency in production is obtained by
manufacturing the required quantity of products,
of the required quality, at the required time by the
best and cheapest method.
• To achieve this objective, production management
employs production planning and control function
which is a management tool that coordinates all
manufacturing activities.
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.
• The principle of production planning and control
lies in the statement ‘First Plan Your Work and
then Work on Your Plan’.
• Main functions of production planning and control
include;
i. Planning,
ii. Routing,
iii. Scheduling,
iv. Dispatching and;
v. Follow-up.
• Other functions are;
i. Estimating
ii. Loading
iii. Expediting
iv. Evaluating
v. Inventory Control
Planning
• 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
• 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 for department to department
and machine to machine till raw material gets its
final shape.
Scheduling
• Scheduling determines the programme 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
• Dispatching is concerned with the starting the
processes. It gives necessary authority so as to
start a particular work, which has been 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’.
Follow-up
• The function of Follow-up is to report daily the
progress of work in each shop in a prescribed
proforma and to investigate the causes of
deviations from the planned performance.
Objective of Production Function
• To deliver goods in required quantities to
customers in required delivery schedule.
• To ensure maximum utilization of all resources
• To ensure production quality products
• To minimize the product throughput time
• To maintain optimum level inventory
• To maintain flexibility in manufacturing operations
• Coordinate between labour and machines and
various supporting departments
Types of Production Planning and
Control Systems
• Different types of production and planning
control systems can be applied, amongst them
are;
i. Push Systems
ii. Pull Systems
iii. Bottlenecks
iv. Emphasis on holding inventories of materials
to support production.
Push Systems
•Push system is when products are manufactured in
anticipation of demand and production is based on
long-term forecasts and, therefore, uncertain Lysons &
Farrington (2006).
•The manufacturer sets production at a level in accord
with historical ordering patterns from retailers. It takes
longer for a push-based supply chain to respond to
changes in demand, which can result in overstocking
or bottlenecks and delays (the Bullwhip effect),
unacceptable service levels and product obsolescence.
Characteristics of Push System
• Suppliers produce to delight
• Production is based on the forecasted demand
• High level of inventory
• Inventory is controlled through JIC
• Products are standardized
Pull Systems
•Pull system is when products are produced or
manufactured to specific orders than forecasts.
Thus, demand is certain and inventory is low or
non-existent Lysons & Farrington (2006).
•This is because information about customer is
quickly transmitted to the various supply chain
participants, the bullwhip effect is avoided.
Characteristics of Pull System
• Suppliers produce to satisfy customers
• Production is based on customers order
• There is stockless
• The inventory is controlled through JIT
• There is a variety of products
Pull scheduling
A system of controlling
materials whereby the use buyer
signals to the maker or
Pull: Just-in-time
provider that more material
is needed.
Push scheduling
Push: traditional wa
A system of controlling
materials whereby makers
and providers make or send supplier
material in response to a
pre-set schedule, regardless
of whether the next process
needs them at the time.
Bottlenecks
• A bottleneck is any area along the production line
where work can get backed up for one reason or
another. Thus
► A bottleneck is a limiting factor or constraint.
► A bottleneck has the lowest effective capacity in a
system.
• Performing a bottleneck analysis can help to
identify the cause of a bottleneck, and lead to
potential solutions to get work flowing at a more
even rate.
Bottleneck Operation
Operation 1 Operation 2 Operation 3
20/hr. 10/hr. 15/hr.
► The bottleneck time is the time of the slowest workstation
(the one that takes the longest) in a production system
►The throughput time is the time it takes a unit to go through
production from start to end
Example 1
• The following are the operations process of water
packaging at Dwight-Devon Co. LTD in a space of
one hour.
Machine Machine Machine
A B C
2 min/ Unit 2 min/ Unit 3 min/ Unit
Required:
– Identify Bottleneck process
– Find Capacity of operations process of Dwight-Devon
Co. LTD
– Find Throughput time of its operations process
Here are some ways for you to
increase capacity at the bottleneck
• Add resources at the bottleneck operation
• Always have a part for the bottleneck to process
• Assure that the bottleneck works only on quality
parts
• Examine your production schedule
• Increase the time the operation is working
• Minimize downtime.
Inventories of Materials
• Inventory or stock (in common terms) is
considered to be the central theme in managing
materials.
• In the generally understood the term, inventory
means a physical stock of goods kept in store to
meet the anticipated demand; Thus
• An INVENTORY is a list of things held in stock.
• However, from materials management
perspective, an apt definition of inventory is “a
usable but idle resource having some economic
value.”
• Inventory consists of physical items moving
through the production system, Originates with
shipment of raw material and parts from the
supplier and Ends with delivery of the finished
products to the customer.
Types of Inventory
Justification of Inventory
• Inventory will always exist (Providing buffer between
Demand and Supply).
• Avoid shortages, production delays, and project delays.
• Competitive pressure to supply common products
quicker than they can be produced.
• Price breaks are common when large quantities of
material and parts are purchased.
• We may store inventory in periods of low demand and
consume them in periods of large demand to smooth
production rate (seasonal demand).
• Speculation.
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