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Systems for production have existed since ancient times.

The Great Wall of China, the Egyptian pyramids, the ships of the Roman and Spanish empires, and the roads and aqueducts of the Romans provide examples of the human ability to organize for production. Even so, most of these examples could be classified as public works projects. The production of goods for sale, at least in the modern sense, and the modern factory system had their roots in the Industrial Revolution. The Industrial Revolution The Industrial Revolution began in the 1770s in England and spread to the rest of Europe and to the United States during the 19th century. Prior to that time, goods were produced in small shops by craftsmen and their apprentices. Under that system, it was common for one person to be responsible for making a product, such as a horse-drawn wagon or a piece of furniture, from start to finish. Only simple tools were available; the machines that we use today had not been invented. Then, a number of innovations in the 18th century changed the face of production forever by substituting machine power for human power. Perhaps the most significant of these was the steam engine, because it provided a source of power to operate machines in factories. The spinning jenny and the power loom revolutionized the textile industry. Ample supplies of coal and iron ore provided materials for generating power and making machinery. The new machines, made of iron, were much stronger and more durable than the simple wooden machines they replaced. In the earliest days of manufacturing, goods were produced using craft production: highly skilled workers using simple, flexible tools produced goods according to customer specifications. Craft production had major shortcomings. Because products were made by skilled craftsmen who custom fitted parts, production was slow and costly. And when parts failed, the replacements also had to be custom made, which was also slow and costly. Another shortcoming was that production costs did not decrease as volume increased; there were no economies of scale, which would have provided a major incentive for companies to expand. Instead, many small companies emerged, each with its own set of standards. A major change occurred that gave the Industrial Revolution a boost: the development of standard gauging systems. This greatly reduced the need for custom-made goods. Factories began to spring up and grow rapidly, providing jobs for countless people who were attracted in large numbers from rural areas. Despite the major changes that were taking place, management theory and practice had not progressed much from early days. What was needed was an enlightened and more systematic approach to management. Scientific Management The scientific management era brought widespread changes to the management of factories. The movement was spearheaded by the efficiency engineer and inventor Frederick Winslow Taylor, who is often referred to as the father of scientific management. Taylor believed in a science of management based on observation, measurement, analysis and improvement of work methods, and economic incentives. He studied work methods in great detail to identify the best method for doing each job. Taylor also believed that management should be responsible for planning, carefully selecting and training workers, finding the best way to perform each job, achieving cooperation between management and workers, and separating management activities from work activities. Taylors methods emphasized maximizing output. They were not always popular with workers, who sometimes thought the methods were used to unfairly increase output without a corresponding increase in compensation. Certainly some companies did abuse workers in their quest for efficiency. Eventually, the public outcry reached the halls of Congress, and hearings were held on the matter. Taylor himself was called to testify in 1911, the same year in which his classic book, The Principles of Scientific Management, was published. The publicity from those hearings actually helped scientific management principles to achieve wide acceptance in industry. A number of other pioneers also contributed heavily to this movement, including the following: Frank Gilbreth was an industrial engineer who is often referred to as the father of motion study. He developed principles of motion economy that could be applied to incredibly small portions of a task. Henry Gantt recognized the value of nonmonetary rewards to motivate workers, and developed a widely used system for scheduling, called Gantt charts.

Harrington Emerson applied Taylors ideas to organization structure and encouraged the use of experts to improve organizational efficiency. He testified in a congressional hearing that railroads could save a million dollars a day by applying principles of scientific management. Henry Ford, the great industrialist, employed scientific management techniques in his factories. During the early part of the 20th century, automobiles were just coming into vogue in the United States. Fords Model T was such a success that the company had trouble keeping up with orders for the cars. In an effort to improve the efficiency of operations, Ford adopted the scientific management principles espoused by Frederick Winslow Taylor. He also introduced the moving assembly line, which had a tremendous impact on production methods in many industries. Among Fords many contributions was the introduction of mass production to the automotive industry, a system of production in which large volumes of standardized goods are produced by low-skilled or semiskilled workers using highly specialized, and often costly, equipment. Ford was able to do this by taking advantage of a number of important concepts. Perhaps the key concept that launched mass production was interchangeable parts, sometimes attributed to Eli Whitney, an American inventor who applied the concept to assembling muskets in the late 1700s. The basis for interchangeable parts was to standardize parts so that any part in a batch of parts would fit any automobile coming down the assembly line. This meant that parts did not have to be custom fitted, as they were in craft production. The standardized parts could also be used for replacement parts. The result was a tremendous decrease in assembly time and cost. Ford accomplished this by standardizing the gauges used to measure parts during production and by using newly developed processes to produce uniform parts. A second concept used by Ford was the division of labor, which Adam Smith wrote about in The Wealth of Nations (1776). Division of labor means that an operation, such as assembling an automobile, is divided up into a series of many small tasks, and individual workers are assigned to one of those tasks. Unlike craft production, where each worker was responsible for doing many tasks, and thus required skill, with division of labor the tasks were so narrow that virtually no skill was required.

Assembly Lines Assembly lines are one of several approaches to the production of goods and delivering services. But the importance of assembly lines to business and society is hard to overstate. Often associated with Henry Fords automobile production, they were the hallmark of mass production, achieving high volumes of standardized products. As such, they played a pivotal role in the development of what we now refer to as industrialized nations. By shifting from craft production methods to assembly lines, producers were able to successfully employ large numbers of unskilled workers. By using assembly lines, they achieved tremendous gains in industrial productivity, produced affordable products, and in the process greatly increased the standard of living of people in industrial nations. As you will learn later in the book, assembly lines also play an important role in a newer approach to operations called lean production or, more generally, lean operations.

Together, these concepts enabled Ford to tremendously increase the production rate at his factories using readily available inexpensive labor. Both Taylor and Ford were despised by many workers, because they held workers in such low regard, expecting them to perform like robots. This paved the way for the human relations movement. The Human Relations Movement Whereas the scientific management movement heavily emphasized the technical aspects of work design, the human relations movement emphasized the importance of the human element in job design. Lillian Gilbreth, a psychologist and the wife of Frank Gilbreth, worked with her husband, focusing on the human factor in work. (The Gilbreths were the subject of a classic 1950s film, Cheaper by the Dozen.) Many of her studies in the 1920s dealt with worker fatigue. In the following decades, there was much emphasis on motivation. During the 1930s, Elton Mayo conducted studies at the Hawthorne division of Western Electric. His studies revealed that in addition to the physical and technical aspects of work, worker motivation is critical for improving productivity. During the 1940s, Abraham Maslow developed motivational theories, which Frederick Hertzberg refined in the 1950s. Douglas McGregor added Theory X and Theory Y in the 1960s. These theories represented the two ends of the spectrum of how employees view work. Theory X, on the negative end, assumed that workers do not like to work, and have to be controlledrewarded and punishedto get them to do good work. This attitude was quite common in the automobile industry and in some other industries, until the threat of global competition forced them to rethink that approach. Theory Y, on the other end of the spectrum, assumed that workers enjoy the physical and mental aspects of work and become committed to work. The Theory X approach resulted in an adversarial environment, whereas the Theory Y approach resulted in empowered workers and a more cooperative spirit. In the 1970s, William Ouchi added Theory Z, which combined the Japanese approach with

such features as lifetime employment, employee problem solving, and consensus building, and the traditional Western approach that features short-term employment, specialists, and individual decision making and responsibility. Decision Models and Management Science The factory movement was accompanied by the development of several quantitative techniques. F. W. Harris developed one of the first models in 1915: a mathematical model for inventory management. In the 1930s, three coworkers at Bell Telephone Labs, H. F. Dodge, H. G. Romig, and W. Shewhart, developed statistical procedures for sampling and quality control. In 1935, L. H. C. Tippett conducted studies that provided the groundwork for statistical-sampling theory. At first, these quantitative models were not widely used in industry. However, the onset of World War II changed that. The war generated tremendous pressures on manufacturing output, and specialists from many disciplines combined efforts to achieve advancements in the military and in manufacturing. After the war, efforts to develop and refine quantitative tools for decision making continued, resulting in decision models for forecasting, inventory management, project management, and other areas of operations management. During the 1960s and 1970s, management science techniques were highly regarded; in the 1980s, they lost some favor. However, the widespread use of personal computers and user-friendly software in the workplace contributed to a resurgence in the popularity of these techniques. The Influence of Japanese Manufacturers A number of Japanese manufacturers developed or refined management practices that increased the productivity of their operations and the quality of their products. This made them very competitive, sparking interest in their approaches by companies outside Japan. Their approaches emphasized quality and continual improvement, worker teams and empowerment, and achieving customer satisfaction. The Japanese can be credited with spawning the quality revolution that occurred in industrialized countries, and with generating widespread interest in time-based management (just-in-time production). The influence of the Japanese on U.S. manufacturing and service companies has been enormous and promises to continue for the foreseeable future. Because of that influence, this book will provide considerable information about Japanese methods and successes. Table 1.6 provides a chronological summary of some of the key developments in the evolution of operations management. TABL E 1.6 Historical summary of operations management

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Service Operations vs. Manufacturing Operations

by Matthew Schieltz, Demand Media
Service and manufacturing operations have differences, but also similarities. For example, both create mission statements and a vision for how the organization will be run and perceived by customers. Each provider or manufacturer wants to lead the market in its specific industry. However, manufacturing and service operations answer different questions and formulate different strategies when it comes to planning and managing the way in which an organization is run.
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Manufacturing operations produce tangible goods, which are physical products that can be held and seen. Manufacturing can be broken down into two branches: process and discrete manufacturing. While process manufacturers produce goods that typically use a formula and ingredients, such as soda pop or pharmaceutical drugs, discrete manufacturers produce goods from parts, such as electronics, appliances and automobiles. On the other hand, service operations provide certain intangible services that may not be easily identifiable. Service operations can be classified into many industries, such as banking, hospitality, advertising and consultancy.

Customization vs. Standardization

In general, manufacturers have a standardized way of producing goods. Goods are produced en masse in a factory or warehouse-type environment. One finished product is generally the same as the next. Service operations, by contrast, have more opportunities to customize the services they provide. For example, beauticians and hairdressers must customize the styling and treatments to match the customer's hair, shape of face and other characteristics. Even in service operations where you receive a tangible product, the service you receive from workers may not always be the same.

Production Environment
Manufacturing and service operations both plan the environment in which work takes place, but they focus on different elements. Manufacturing operations, for instance, consider the manufacturing layout. For example, the manufacturing layout can be fixed, process-focused or product-focused, such as in an assembly line factory. These issues affect the manufacturer's workforce performance and total output. Service operations, by contrast, plan the environment according to how it affects customers. For example, service operations are concerned with how the atmosphere appears to customers. Dimensions of the service environment include the layout of furnishings, arrangement of signs and tangible cues, such as colors and sounds designed to enhance the customer experience.

Operations Management
In a manufacturing environment, operations managers oversee the activities required to produce goods from raw materials. Issues managers in this environment face include managing the space to store raw materials, the flow of materials through the manufacturing process, how much product to produce and quality of output. In a service operation, operations managers schedule workers to handle customer demand. They must coach and train employees to provide optimal services to customers. Service operations that also sell physical goods also face inventory control issues, such as how much to stock and when to order.

Similar Issues
Service and manufacturing organizations face many similar issues that affect the end result of the operation. For example, both face issues of cost control. Manufacturing operations must find suppliers of raw materials at the lowest cost -- and highest quality -- possible. Likewise, service operations' indirect cost of providing services must be kept low so that the organization can provide competitive prices to customers and still turn a profit. Other issues both types of operations face include forecasting demand for products and services and staying competitive in the marketplace.

Types of Manufacturing Systems

By Emily Beach, eHow Contributor

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Manufacturing systems help companies meet production goals.

Companies rely on a variety of manufacturing systems to produce everything from consumer goods to high-tech electronics. Whether you're starting a new business or taking a critical look at your existing firm, understanding different types of manufacturing systems is critical to success. The right manufacturing system can help your firm meet production goals, maintain high quality standards and keep costs low and profits high.

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Types of Flexible Manufacturing System Layouts

Types of Manufacturing Industries

1. Custom Manufacturing System

Custom manufacturing systems represent one of the oldest and most widely used forms of product making. In this system, a single craftsman produces one item at a time by hand or by machine. If machines are used in this system, they are often highly specialized, and capable of producing only a single line of merchandise. This system offers the lowest level of efficiency and highest cost per unit, and results in very low levels of production.

Intermittent Manufacturing System

o Intermittent manufacturing systems, often called "job shops," are capable of producing multiple items at the same time. These objects must be identical, or very similar, and cannot be customized for individual buyers. This type of system works best for limited production runs, or for companies looking to produce a low volume of goods.
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Continuous Manufacturing System

o Continuous manufacturing systems allow for mass production of products. In this system, the product moves from station to station along an assembly line, with different workers performing various

production tasks along the way. Continuous systems were first used during the Industrial Revolution, and are often associated with the Ford Company's Model T production. This type of system allows companies to meet high production goals, and results in a lower per-unit cost. Because of the large amount of equipment required to create an assembly line, as well as the level of labor, this type of system is often associated with large capital investments.

Flexible Manufacturing System

o Flexible manufacturing systems represent one of the most widely used modern production systems. In this type of setup, companies invest in a variety of machinery that can be quickly and easily reconfigured to produce a large number of products. Flexible manufacturing often incorporates robots or automatic vehicles to help move products through the production process, eliminating the need for skilled labor. This type of system allows for a high degree of flexibility in terms of product mix, and helps the company maintain high volume in each production run. Because robots replace human labor in this type of system, products tend to be fairly consistent and quality remains high. This system requires a high degree of capital investment as well as frequent maintenance and oversight.

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Understanding Production and Operations Management


The very essence of any business is to cater needs of customer by providing services and goods, and in process create value for customers and solve their problems. Production and operations management talks about applying business organization and management concepts in creation of goods and services.

Production is a scientific process which involves transformation of raw material (input) into desired product or service (output) by adding economic value. Production can broadly categorize into following based on technique: Production through separation: It involves desired output is achieved through separation or extraction from raw materials. A classic example of separation or extraction is Oil into various fuel products.
Production by modification or improvement: It involves change in chemical and mechanical parameters of the raw material without altering physical attributes of the raw material. Annealing process (heating at high temperatures and then cooling), is example of production by modification or improvement. Production by assembly: Car production and computer are example of production by assembly.

Importance of Production Function and Production Management

Successful organizations have well defined and efficient line function and support function. Production comes under the category of line function which directly affects customer experience and there by future of organization itself. Aim of production function is to add value to product or service which will create a strong and long lasting customer relationship or association. And this can be achieved by healthy and productive association between Marketing and Production people. Marketing function people are frontline representative of the company and provide insights to real product needs of customers. An effective planning and control on production parameters to achieve or create value for customers is called production management.

Operations Management
As to deliver value for customers in products and services, it is essential for the company to do the following: 1. 2. 3. Identify the customer needs and convert that into a specific product or service (numbers of products required for specific period of time) Based on product requirement do back-ward working to identify raw material requirements Engage internal and external vendors to create supply chain for raw material and finished goods between vendor production facility customers.

Operations management captures above identified 3 points.

Production Management v/s Operations Management

A high level comparison which distinct production and operations management can be done on following characteristics:

Output: Production management deals with manufacturing of products like (computer, car, etc) while operations
management cover both products and services.

Usage of Output: Products like computer/car are utilized over a period of time whereas services need to be
consumed immediately

Classification of work: To produce products like computer/car more of capital equipment and less labour are
required while services require more labour and lesser capital equipment.

Customer Contact: There is no participation of customer during production whereas for services a constant
contact with customer is required. Production management and operations management both are very essential in meeting objective of an organization.

What is the role of a production manager in Operations Management?

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The production manager forms a very important and defining part of the organization structure of an engineering company. The responsibilities of a production manager can be summarized as follows.

1) Forecasting the requirements of the production in order to achieve the production target.












3) Minimizing throughput time and work in process inventory. This can be achieved by systematic production planning and also by very efficient execution of the plans. 4) One of the most important responsibility of a production manager deals with reducing material handling cost, which generally is achieved by the use of efficient material handling system and also by using plant layouts which must be developed in a proper or correct way.

5) Reducing the quality cost with the help of analysis of non conformances on periodic basis and also by following suitable actions (both corrective and preventive).

6) Building team spirit among the workmen and also motivating by means of personal involvement. This task of motivation can also be achieved by designing and implementing suitable financial incentive schemes.

7) To device accurate methodology involving method study of manufacturing, along with the other engineering economic principles.

8 ) Improving the productivity level of the workers on continuous basis by workmens training and by bringing into use the standards of the performance derived from work measurement studies etc.

Introduction to Operations Management

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What is Operations Management?

Role of the Operations Manager

Benefits of Operations Management The Transformation Process

Being an operations manager involves overseeing and having responsibility for all the activities in the organisation which contribute to the effective production of goods and services. Depending on the organisational structure, the exact nature of tasks that are classified under the operations function may differ from business to business. However, the following activities are usually applicable to all types of operations:[1]

Understanding strategic objectives: Operations managers must clearly understand the goals of the organisation and develop a clear vision of exactly how operations will help achieve them. This also involves translating these goals into implications for the operation's performance, objectives, quality, speed, dependability, flexibility and cost. Developing an operations strategy: Due to the numerous decision-making involved with operations, it is critical that operations managers have a set of guidelines that are align with the organisation's long term goals. Designing the operation's products, services and processes: Design involves determining the physical form, shape and composition of products, services and processes. Planning and controlling: This involves deciding what the operations resources should be doing and making sure that it is getting done. Improving the performance of operation: Operations managers are expected to continually monitor and improve the overall performance of their operation.

Production Planning and Control


For efficient, effective and economical operation in a manufacturing unit of an organization, it is essential to integrate the production planning and control system. Production planning and subsequent production control follow adaption of product design and finalization of a production process. Production planning and control address a fundamental problem of low productivity, inventory management and resource utilization. Production planning is required for scheduling, dispatch, inspection, quality management, inventory management, supply management and equipment management. Production control ensures that production team can achieve required production target, optimum utilization of resources, quality management and cost savings.
Planning and control are an essential ingredient for success of an operation unit. The benefits of production planning and control are as follows:

It ensures that optimum utilization of production capacity is achieved, by proper scheduling of the machine items
which reduces the idle time as well as over use.

It ensures that inventory level are maintained at optimum levels at all time, i.e. there is no over-stocking or understocking.

It also ensures that production time is kept at optimum level and thereby increasing the turnover time. Since it overlooks all aspects of production, quality of final product is always maintained.

Production Planning
Production planning is one part of production planning and control dealing with basic concepts of what to produce, when to produce, how much to produce, etc. It involves taking a long-term view at overall production planning. Therefore, objectives of production planning are as follows:

To ensure right quantity and quality of raw material, equipment, etc. are available during times of production. To ensure capacity utilization is in tune with forecast demand at all the time.
A well thought production planning ensures that overall production process is streamlined providing following benefits:

Organization can deliver a product in a timely and regular manner. Supplier are informed will in advance for the requirement of raw materials. It reduces investment in inventory. It reduces overall production cost by driving in efficiency.

Production planning takes care of two basic strategies product planning and process planning. Production planning is done at three different time dependent levels i.e. long-range planning dealing with facility planning, capital investment, location planning, etc.; medium-range planning deals with demand forecast and capacity planning and lastly short term planning dealing with day to day operations.

Production Control
Production control looks to utilize different type of control techniques to achieve optimum performance out of the production system as to achieve overall production planning targets. Therefore, objectives of production control are as follows:

Regulate inventory management Organize the production schedules Optimum utilization of resources and production process
The advantages of robust production control are as follows:

Ensure a smooth flow of all production processes Ensure production cost savings thereby improving the bottom line Control wastage of resources It maintains standard of quality through the production life cycle.

Production control cannot be same across all the organization. Production control is dependent upon the following factors:

Nature of production( job oriented, service oriented, etc.) Nature of operation Size of operation
Production planning and control are essential for customer delight and overall success of an organization.

Production Planning and Control - September 7th, 2010 STEPS IN PRODUCTION PLANNING & CONTROL Planning is the determinative phase of production management. It figures out what is to be done. Production planning translates sales forecasts into master production schedules, takes off material, personnel & equipment requirements & prepares detailed area or department schedules. It also determines the maintaining of raw materials & finished goods at proper levels. Also, it prepares alternative plans of action as a means of meeting emergencies. Control balances production & inventories apart from the determinative phase of planning. Production control supervises the execution of production schedules so that work flows through the manufacturing departments on time & without interruptions. Control also maintains raw material inventories at levels that neither tie-up excessive amounts of working capital nor lead to shortages that interrupt production. At the same time, finished goods inventories are regulated so that they neither become excessive nor fall so low that they fail to meet demands & so cause back orders to accumulate. Functions/scope of production planning & control 1. Materials: Materials should be made available at the right quality, right quantity, right price & right price. Inventory control & regular supply of materials should be guaranteed. 2. Manpower: It is important to carry out manpower planning to maintain operational & managerial staff possessing requisite skills & expertise. 3. Methods: It is always desirable to consider all the available alternatives & select the best method of processing. Simultaneously, to plan for tooling, jigs & fixtures & to determine the best sequence of operations. 4. Machines & equipments: The choices of manufacturing methods depend on available production facilities & utilization of plant, machines equipments. 5. Routing: The routing function specifies what work is to be done where & when it is to be performed. 6. Estimating: it involves establishing performance standard of each work after duly analyzing operation sheets. These

sheets indicate feeds, speeds, depth of cuts, use of special attachments & methods. 7. Loading & scheduling: Loading & scheduling machines have to be made as per the production requirements. Machine loading generates accurate information on work standard, scrap allowances, machine-time requirements & machine capacities. Scheduling is a time-table for performing the job on the available machines so that delivery dates are maintained. 8. Dispatching: Dispatching is the release of orders & instructions to start production as per the route sheets & schedule charts. 9. Expediting: It refers to follow-up which is done after the dispatching function. 10. Inspection: It is related to maintenance of quality in production & processes, methods labour so that improvements can be made to achieve the quality standards. 11. Evaluating: It provides a feedback mechanism on a long term basis so that past experience can be used to improve upon use of methods, facilities & resources in future period. 12. Cost control: In manufacturing products, costs can be kept within control through wastage reduction, value analysis, inventory control & efficient use of resources. Objectives of production planning & control 1. To make all preparations to manufacture goods within specified time & cost. 2. To make available supply of materials, parts & components at the right time. 3. To ensure most economical use of plant & equipment by scheduling best machine utilization. 4. To provide information for production management & distribution of goods. 5. To issue relevant orders to production personals to implement the production plan. 6. To make available materials, machines, tools, equipment & manpower in the required quality & quantity & at the specified time. 7. To ensure production of goods in the required quantities of the specified quality at the pre-determined time. 8. To keep the plant free from production bottleneck. 9. To maintain spare capacity to deal with rush orders. 10. To maintain cordial industrial relations. Organization of Production planning & control Activities in Production planning section includes: 1. Production budget office: In this office, incoming orders are recorded in order book. Budget allocation is done to execute each order. In case the customer gives a required date of delivery, the date is noted for further action. 2. Material Requirement planning: No sooner the planning engineer receives the product to be produced, the production planning department prepares material requirement plan. Material can be applied either internally from the store or ordered from outside. 3. Methods planning office: The responsibility of this office is to assess the potentialities of available methods & to select the best method for producing components. 4. Capacity planning office: This office checks the status of each of the facility & allocates them as per requirement of jobs. 5. Tool & jig design office: The planner tries to provide simple & cost effective tools & jigs for performing the operation. The selection of suitable tool & jig is advised by industrial engineers. 6. Operation layout & routing office: The responsibility of this office is to prepare several forms & documents so that the production people can work with ease. 7. Scheduling office: The planner is excepted to prepare a time table of machine allocation for different jobs. Individual capacity of the machine indicates to the planner that with the existing number of machines how much work can be cleared & time taken to complete the work. Activities of Production Control section: 1. Dispatching office: This office releases production orders & instructions to those who are expected to carry out production activities. 2. Expediting centre: This centre implements the plan. The centre maintains an effective communication with help from expeditor, between shop floor & the scheduling office. 3. Transportation office: It looks after movement of men & materials within the factory premises. 4. Stores & inspection section: This section assumes the materials management & control functions. Principles of Production Planning & Control 1. The kind of production planning & the control system required in a factory is determined by the type of production. 2. The operation of production planning & control department is influenced by the number of parts involved in manufacturing the product. 3. The complexity of production planning & control function varies with the number of assembles involved. 4. The scheduling activities must be carried out strictly as per time table. 5. A sound production planning & control system works on the same principle for both small & large plants. 6. An effective production planning & control function brings about cost control. 7. Production planning & control allows management by exception. 8. Production planning & control is a tool to coordinate all manufacturing activities in a product system.

Phases of PPC 1. Planning phase: It has two categories of planning ,

a. Prior planning is pre-production planning & b. Active planning is actual production planning. Prior planning refers to all the planning efforts that take place prior to active planning. The modules of prior planning are: product development & design, forecasting, aggregate planning, master scheduling etc. Active planning includes various activities directly related to the production. The modules of active planning are: process planning & routing, material planning, tools planning, loading, scheduling etc. 2. Action phase: Action phase directly deals with dispatching. Dispatching is the transition from planning phase to action phase. The employee is ordered to start manufacturing the product. The tasks that are included in dispatching are: job order, store issue order, tool order, time ticket, inspection order, move order etc. 3. Control phase: Control phase includes (a) progress reporting & (b) corrective action. Progress reporting helps to make comparison with the present level of performance. Corrective action makes provisions for an unexpected event e.g., capacity modifications, schedule modifications etc. Steps in production planning & control The production planning & control department has thus to initiate the following steps. 1. Routing i.e. determination of the manufacturing path. 2. Scheduling i.e. establishing time for starting & finishing each operation or job. 3. Despatching i.e. issue of orders. 4. Follow-up i.e. ensuring that work proceeds according to plans & there is no variation. This means to ensure smooth flow of work. Routing Routing is one important step in production planning & control. It is useful for smooth & efficient working of the whole plant or factory. Production planning starts with routing. It decides the path of work & the sequence of operations. The demand for a more systematic method of carrying the work through the shop gave rise to the practice of routing. In fact, production planning starts with routing which includes the following activities: a. Determining the quality of the product to be manufactured; b. Determining the men, machines & materials to be used; c. Determining the types, number & sequence of manufacturing operations; & d. Determining the place of production. Routing has the following objectives: 1. 2. 3. 4. 5. It It It It It determines the sequence of manufacturing operations. ensures the strict adherence to the sequence so determined. strives for the best possible & cheapest sequence of operations. influences the design & layout of the factory building with a view to get quick & better production results. also influences the installation of plants & factory for better results.

Advantages of routing: 1. Well chalked out division of labour. 2. Production of goods according to schedule. 3. Maximization of productivity. 4. Interruption free production. 5. Reduction in cost of production. 6. Optimum use of all factors of production. 7. scientific layout of the plant. Scheduling Scheduling is next to routing & is concerned with timetable of production. Scheduling arranges the different manufacturing operations in order of priority, fixing the time & date for the commencement & completion of each operation. It includes all requisites of production like scheduling of parts, materials, machines, etc. perfect coordination must exist between operation so that parts that are separately produced are brought to the final assembly in right time. In brief, scheduling means fixing or deciding the amount of work to be done & fixing the time for starting & finishing each operation. It is like a timetable of the production plan. Essentials of master scheduling: 1. 2. 3. 4. 5. 6. 7. Inventory policy & position. Procurement including subcontract. Sales forecast. Departmental manufacturing capacities. Operations required & operations schedule. Specific operations presenting critical path or imbalance of production flow. Specific customer demands or delivery requirements.

8. Alternative delivery schedules. 9. Production plan including quantitative data. 10. Production standards. 11. Demand for finished products. Uses of scheduling: 1. Scheduling is certainly a necessity in a large setup which produces a variety of products with numerous components. The time within which products must be manufactured forms an important element in production control. 2. Scheduling also determines the total time required to perform a given piece of work or assembly. 3. Time & motion study helps standardization of methods of work after a careful analysis of all the vital factors surrounding the manufacturing processes.

Dispatching Dispatching is concerned with starting the processes & operations of production. Dispatching is based on the route sheets & schedule sheets. Dispatching provides the necessary authority to start the routed & schedule work. It is similar to putting oneself into the train after deciding the route of the particular train & the destination. Functions of dispatching: 1. To ensure that the right materials are moved from stores to machines & from operation to operation. 2. To distribute machine loading & schedule charts, route sheets, operation instruction cards & identification tags for each works order. 3. To instruct tools department to issue the right tools, accessories & fixtures in time. 4. To authorize the work to be taken in hand as per the predetermined dates & time. 5. To direct inspection at various stages of production for inspection report. 6. To maintain proper report of the various subsidiary orders issued with each production order, for filing & reference. 7. To inform the follow-up section that production is starting.

Follow-up This is the last function of production control. It expedites the movement of materials & production process as a whole. It looks into determination of the present situation expediting the department lagging behind & removing the bottleneck in the production line. Once production commences it is necessary to check that it is proceeding according to plan. Before dispatching new orders to the manufacturing department the progress of outstanding orders must be known. There are certain factors over which the manufacturing department has no control & hence follow-up is necessary. The production schedule is likely to suffer even if slight irregularity is caused by one or more of these factors. The most important factors causing disturbances in production schedule are: excessive labour, absenteeism, machine breakdown, errors in drawings, strikes, late delivery of materials etc. the function of follow-up is to maintain proper records of work, delays & bottleneck. Such records can be used in future to control production. Follow-up Documents: Follow-up documents are prepared with the objective to identify the products. They also help to check completion dates with due dates. They vary greatly according to the type of production. These documents include the following information: 1. Labels with part numbers. 2. Order numbers mentioned on the article. 3. Number of products or batches of products. 4. Daily progress sheets showing the position of every order in process. 5. Reports showing orders behind schedule.

Gantt chart
From Wikipedia, the free encyclopedia

"Gantt" redirects here. For other uses, see Gantt (disambiguation).

A Gantt chart showing three kinds of schedule dependencies (in red) and percent complete indications.

A Gantt chart is a type of bar chart, developed by Henry Gantt in the 1910s, that illustrates a project schedule. Gantt charts illustrate the start and finish dates of the terminal elements and summary elements of a project. Terminal elements and summary elements comprise the work breakdown structure of the project. Some Gantt charts also show the dependency (i.e., precedence network) relationships between activities. Gantt charts can be used to show current schedule status using percent-complete shadings and a vertical "TODAY" line as shown here. Although now regarded as a common charting technique, Gantt charts were considered revolutionary when first introduced.[1] In recognition of Henry Gantt's contributions, the Henry Laurence Gantt Medal is awarded for distinguished achievement in management and in community service. This chart is also used in Information Technology to represent data that has been collected.
Contents [hide]

1 Historical development 2 Advantages and limitations 3 Example 4 See also 5 References 6 External links



The first known tool of this type was developed in 1896 by Karol Adamiecki, who called it a harmonogram. Adamiecki only published his chart in 1931, however, in Polish, which limited both its adoption and recognition of his authorship. The chart is named after Henry Gantt (18611919), who designed his chart around the years 19101915.[2][3]

One of the first major applications of Gantt charts was during World War I. On the initiative of General William Crozier, then Chief of Ordnance these included that of theEmergency Fleet, the Shipping Board, etc.[4] In the 1980s, personal computers allowed for widespread creation of complex and elaborate Gantt charts. The first desktop applications were intended mainly for project managers and project schedulers. With the advent of the Internet and increased collaboration over networks at the end of the 1990s, Gantt charts became a common feature of web-based applications, including collaborative groupware.

and limitations

Gantt charts have become a common technique for representing the phases and activities of a project work breakdown structure (WBS), so they can be understood by a wide audience all over the world. A common error made by those who equate Gantt chart design with project design is that they attempt to define the project work breakdown structure at the same time that they define schedule activities. This practice makes it very difficult to follow the 100% Rule. Instead the WBS should be fully defined to follow the 100% Rule, then the project schedule can be designed.[5] Although a Gantt chart is useful and valuable for small projects that fit on a single sheet or screen, they can become quite unwieldy for projects with more than about 30 activities [citation needed]. Larger Gantt charts may not be suitable for most computer displays. A related criticism is that Gantt charts communicate relatively little information per unit area of display. That is, projects are often considerably more complex than can be communicated effectively with a Gantt chart. Gantt charts only represent part of the triple constraints (cost, time and scope) on projects, because they focus primarily on schedule management. Moreover, Gantt charts do not represent the size of a project or the relative size of work elements, therefore the magnitude of a behind-schedule condition is easily miscommunicated. If two projects are the same number of days behind schedule, the larger project has a larger effect on resource utilization, yet the Gantt does not represent this difference. Although project management software can show schedule dependencies as lines between activities, displaying a large number of dependencies may result in a cluttered or unreadable chart. Because the horizontal bars of a Gantt chart have a fixed height, they can misrepresent the time-phased workload (resource requirements) of a project, which may cause confusion especially in large projects. In the example shown in this article, Activities E and G appear to be the same size, but in reality they may be different orders of magnitude. A related criticism is that all activities of a Gantt chart show planned workload as constant. In practice, many activities (especially summary elements) have front-loaded or back-loaded work plans, so a Gantt chart with percent-complete shading may actually miscommunicate the true schedule performance status.


In the following example there are seven tasks, labeled A through G. Some tasks can be done concurrently (A and B) while others cannot be done until their predecessor task is complete (C cannot begin until A is complete). Additionally, each task has three time estimates: the optimistic time estimate (O), the most likely or normal time estimate (M), and the pessimistic time estimate (P). The expected time (TE) is computed using the beta probability distribution for the time estimates, using the formula (O + 4M + P) 6.
Time estimates Activity Predecessor Opt. (O) Normal (M) Pess. (P) Expected time






B, C




Once this step is complete, one can draw a Gantt chart or a network diagram.

A Gantt chart created using Microsoft Project (MSP). Note (1) the critical path is in red, (2) the slack is the black lines connected to non-critical activities, (3) since Saturday and Sunday are not work days and are thus excluded from the schedule, some bars on the Gantt chart are longer if they cut through a weekend.

Mass production
From Wikipedia, the free encyclopedia

This article is about large-scale production. For the Iggy Pop piece, see The Idiot (album). For the American funk band, see Mass Production (band). For creation of matter, see mass generation.

Mass production of airplanes at Aircraft Plant No. 4, near Fort Worth, Texas.

A modern automobile assembly line.

Mass production is the production of large amounts of standardized products, including and especially on assembly lines. With job production and batch production it is one of the three main production methods.[1] The concepts of mass production are applied to various kinds of products, from fluids and particulates handled in bulk (such as food, fuel, chemicals, and mined minerals) to discrete solid parts (such as fasteners) to assemblies of such parts (such as household appliances and automobiles). Mass production is a diverse field, but it can generally be contrasted with craft production. It has occurred for centuries; there are examples of production methods that can best be defined as mass production that predate the Industrial Revolution. However, it has been widespread in human experience, and central to economics, only since the late 19th century.
Contents [hide]

1 Overview 2 History

o o o

2.1 Before the Machine Age 2.2 During and since the Machine Age 2.3 Factory electrification

3 Use of assembly lines 4 Vertical integration 5 Advantages and disadvantages 6 Socioeconomic impacts 7 See also 8 References 9 Further reading 10 External links


Mass Production involves making many copies of products, very quickly, using assembly line techniques to send partially complete products to workers who each work on an individual step, rather than having a worker work on a whole product from start to finish. Mass production of fluid matter typically involves pipes with centrifugal pumps or screw conveyors (augers) to transfer raw materials or partially complete product between vessels. Fluid flow processes such as oil refining and bulk materials such as wood chips and pulp are automated using a system of process control which uses various instruments to measure variables such as temperature, pressure, volumetric and level, providing feedback

Bulk materials such as coal, ores, grains and wood chips are handled by belt, chain, slat, pneumatic or screw conveyors, bucket elevators and mobile equipment such as front-end loaders. Materials on pallets are handled with forklifts. Also used for handling heavy items like reels of paper, steel or machinery are electric overhead cranes, sometimes called bridge cranes because they span large factory bays. Mass production is capital intensive and energy intensive, as it uses a high proportion of machinery and energy in relation to workers. It is also usually automated while total expenditure per unit of product is decreased. However, the machinery that is needed to set up a mass production line (such as robots and machine presses) is so expensive that there must be some assurance that the product is to be successful to attain profits. One of the descriptions of mass production is that "the skill is built into the tool", which means that the worker using the tool need not have the skill. For example, in the 19th or early 20th century, this could be expressed as "the craftsmanship is in the workbench itself" (not the training of the worker). Rather than having a skilled worker measure every dimension of each part of the product against the plans or the other parts as it is being formed, there were jigs ready at hand to ensure that the part was made to fit this set-up. It had already been checked that the finished part would be to specifications to fit all the other finished partsand it would be made more quickly, with no time spent on finishing the parts to fit one another. Later, once computerized control came about (for example, CNC), jigs were obviated, but it remained true that the skill (or knowledge) was built into the tool (or process, or documentation) rather than residing in the worker's head. This is the specialized capital required for mass production; each workbench and set of tools (or each CNC cell, or each fractionating column) is different (fine-tuned to its task).
[edit]History [edit]Before

the Machine Age

Crossbows made of bronze were mass-produced in China during the Warring States Period. The Qin Emperor unified China at least in part by equipping large armies with these weapons, which were equipped with a sophisticated trigger mechanism made of interchangeable parts.[2] Ships of war were mass-produced at a moderate cost by theCarthaginians in their excellent harbors, allowing them to efficiently maintain their control of the Mediterranean. Venice themselves also mass-produced ships using prefabricated parts and assembly lines many centuries later. The Venetian Arsenal apparently produced nearly one ship every day, in what was effectively the world's firstfactory which, at its height, employed 16,000 people. Mass production in the publishing industry has been commonplace since the Gutenberg Bible was published using aprinting press in the mid-15th century. In the Industrial Revolution simple mass production techniques were used at the Portsmouth Block Mills to make ships' pulley blocks for the Royal Navy in the Napoleonic Wars. These were also used to make clocks and watches, and to make small arms. Though produced on a very small scale, Crimean War gunboat engines designed and assembled by John Penn of Greenwich are recorded as the first instance of the application of mass production techniques (though not necessarily the assembly-line

method) to marine engineering.[3] In filling an Admiralty order for 90 sets to his high-pressure and highrevolution horizontal trunk engine design, Penn produced them all in 90 days. He also usedWhitworth Standard threads throughout.[4]

and since the Machine Age

Prerequisites of a world filled with mass production were interchangeable parts, machine tools and power, especially in the form of electricity. Some of the organizational management concepts needed to create 20th-century mass production, such as scientific management, had been pioneered by other engineers (most of whom are not famous, but Frederick Winslow Taylor is one of the well-known ones), whose work would later be synthesized into fields such as industrial engineering,manufacturing engineering, operations research, and management consultancy. Henry Ford downplayed the role of Taylorism in the development of mass production at his company. However, Ford management performed time studies and experiments to mechanize their factory processes, focusing on minimizing worker movements. The difference is that while Taylor focused mostly on efficiency of the worker, Ford also substituted for labor by using machines, thoughtfully arranged, wherever possible. The United States Department of War sponsored the development of interchangeable parts for guns produced at the arsenals at Springfield, Massachusetts and Harpers Ferry, Virginia (now West Virginia) in the early decades of the 19th century, finally achieving reliable interchangeability by about 1850.[5] This period coincided with the development of machine tools, with the armories designing and building many of their own. Some of the methods employed were a system of gauges for checking dimensions of the various parts and jigs and fixtures for guiding the machine tools and properly holding and aligning the work pieces. This system came to be known as armory practice or the American system of manufacturing, which spread throughout New England aided by skilled mechanics from the armories who were instrumental in transferring the technology to the sewing machines manufacturers and other industries such as machine tools, harvesting machines and bicycles. Singer Manufacturing Co., at one time the largest sewing machine manufacturer, did not achieve interchangeable parts until the late 1880s, around the same time Cyrus McCormick adopted modern manufacturing practices in making harvesting machines.[5] Mass production benefited from the development of materials such as inexpensive steel, high strength steel and plastics. Machining of metals was greatly enhanced with high speed steel and later very hard materials such as tungsten carbide for cutting edges.[6] Fabrication using steel components was aided by the development of electric weldingand stamped steel parts, both which appeared in industry in about 1890. Plastics such as polyethylene, polystyrene and polyvinyl chloride (PVC) can be easily formed into shapes by extrusion, blow molding or injection molding, resulting in very low cost manufacture of consumer products, plastic piping, containers and parts.

A very influential article that helped to frame the 20th century's definition of mass production appeared in a 1926 Encyclopdia Britannica supplement. It was written based on correspondence with Ford Motor Company.


Electrification of factories began very gradually in the 1890s after the introduction of a practical DC motor by Frank J. Sprague and accelerated after the AC motor was developed by Nikola Tesla (Westinghouse) and others. Electrification of factories was fastest between 1900 and 1930, aided by the establishment of electric utilities with central stations and the lowering of electricity prices from 1914 to 1917.[7] Electric motors were several times more efficient than small steam engines because central station generation were more efficient than small steam engines and because line shafts and belts had high friction losses.[8] [9] Electric motors allowed also more flexibility in manufacturing and required less maintenance than line shafts and belts. Many factories saw a 30% increase in output just from changing over to electric motors. Electrification enabled modern mass production, as with Thomas Edisons iron ore processing plant (about 1893) that could process 20,000 tons of ore per day with two shifts of five men each. At that time it was still common to handle bulk materials with shovels, wheelbarrows and small narrow gauge rail cars, and for comparison, a canal digger in previous decades typically handled 5 tons per 12 hour day. The biggest impact of early mass production was in manufacturing everyday items, such as at the Ball Brothers Glass Manufacturing Company, which electrified its mason jarplant in Muncie, Indiana, USA around 1900. The new automated process used glass blowing machines to replace 210 craftsman glass blowers and helpers. A small electric truck was used to handle 150 dozen bottles at a time where previously a hand truck would carry 6 dozen. Electric mixers replaced men with shovels handling sand and other ingredients that were fed into the glass furnace. An electric overhead crane replaced 36 day laborers for moving heavy loads across the factory.[10] According to Henry Ford:[11] The provision of a whole new system of electric generation emancipated industry from the leather belt and line shaft, for it eventually became possible to provide each tool with its own electric motor. This may seem only a detail of minor importance. In fact, modern industry could not be carried out with the belt and line shaft for a number of reasons. The motor enabled machinery to be arranged in the order of the work, and that alone has probably doubled the efficiency of industry, for it has cut out a tremendous amount of useless handling and hauling. The belt and line shaft were also tremendously wasteful so wasteful indeed that no factory could be really large, for even the longest line shaft was small according to modern requirements. Also high speed tools were impossible under the old conditions neither the pulleys nor the belts could stand modern

speeds. Without high speed tools and the finer steels which they brought about, there could be nothing of what we call modern industry.

The assembly plant of the Bell Aircraft Corporation in 1944. Note parts ofoverhead crane at both sides of photo near top.

Mass production was popularized in the 1910s and 1920s[citation needed] by Henry Ford's Ford Motor Company, which introduced electric motors to the then-well-known technique of chain or sequential production. Ford also bought or designed and built special purpose machine tools and fixtures such as multiple spindle drill presses that could drill every hole on one side of an engine block in one operation and a multiple head milling machine that could simultaneously machine 15 engine blocks held on a single fixture. All of these machine tools were arranged systematically in the production flow and some had special carriages for rolling heavy items into machining position. Production of the Ford Model T used 32,000 machine tools.[12] All processes in the factory were capable of turning out high precision work within tolerances. Ford's contribution to mass production was synthetic in nature, collating and improving upon existing methods of sequential production and applying electric power to them, resulting in extremely-highthroughput, continuous-flow mass production, making the Model T affordable and, as such, an instant success. [13] Although the Ford Motor Company brought mass production to new heights, it was a synthesizer and extrapolator of ideas rather than being the first creator of mass production. The following paragraphs touch on precursors from prior eras.


of assembly lines

Ford assembly line, 1913. The magneto assembly line was the first.

Mass production systems for items made of numerous parts are usually organized into assembly lines. The assemblies pass by on a conveyor, or if they are heavy, hung from an overhead crane or monorail. In a factory for a complex product, rather than one assembly line, there may be many auxiliary assembly lines feeding sub-assemblies (i.e. car engines or seats) to a backbone "main" assembly line. A diagram of a typical mass-production factory looks more like the skeleton of a fish than a single line.


Vertical integration is a business practice that involves gaining complete control over a product's production, from raw materials to final assembly. In the age of mass production, this caused shipping and trade problems in that shipping systems were unable to transport huge volumes of finished automobiles (in Henry Ford's case) without causing damage, and also government policies imposed trade barriers on finished units. [14] Ford built the Ford River Rouge Complex with the idea of making the company's own iron and steel in the same factory as parts and car assembly took place. River Rouge also generated its own electricity. Upstream vertical integration, such as to raw materials, is away from leading technology toward mature, low return industries. Most companies chose to focus on their core business rather than vertical integration. This included buying parts from outside suppliers, who could often produce them as cheaply or cheaper. Standard Oil, the major oil company in the 19th century, was vertically integrated partly because there was no demand for unrefined crude oil, but kerosene and some other products were in great demand. The other reason was that Standard Oil monopolized the oil industry. The major oil companies were,

and many still are, vertically integrated, from production to refining and with their own retail stations, although some sold off their retail operations. Some oil companies also have chemical divisions. Lumber and paper companies at one time owned most of their timber lands and sold some finished products such as corrugated boxes. The tendency has been to divest of timber lands to raise cash and to avoid property taxes. Today the trend is toward platform companies, where the value added is in market analysis, engineering and product design. The platform company contracts production to outside suppliers, often in low wage countries.

and disadvantages
This article contains a pro and con list. Please help improve it by integrating both sides into a more neutral presentation.(November 2012)

The economies of mass production come from several sources. The primary cause is a reduction of nonproductive effort of all types. In craft production, the craftsman must bustle about a shop, getting parts and assembling them. He must locate and use many tools many times for varying tasks. In mass production, each worker repeats one or a few related tasks that use the same tool to perform identical or near-identical operations on a stream of products. The exact tool and parts are always at hand, having been moved down the assembly line consecutively. The worker spends little or no time retrieving and/or preparing materials and tools, and so the time taken to manufacture a product using mass production is shorter than when using traditional methods. The probability of human error and variation is also reduced, as tasks are predominantly carried out by machinery. A reduction in labour costs, as well as an increased rate of production, enables a company to produce a larger quantity of one product at a lower cost than using traditional, non-linear methods. However, mass production is inflexible because it is difficult to alter a design or production process after a production line is implemented. Also, all products produced on one production line will be identical or very similar, and introducing variety to satisfy individual tastes is not easy. However, some variety can be achieved by applying different finishes and decorations at the end of the production line if necessary. The Ford Model T produced tremendous affordable output but was not very good at responding to demand for variety, customization, or design changes. As a consequence Ford eventually lost market share to General Motors, who introduced annual model changes, more accessories and a choice of colors.[5] With each passing decade, engineers have found ways to increase the flexibility of mass production systems, driving down the lead times on new product development and allowing greater customization and variety of products.



Production, the Stock Market Crash and the Great Depression |last=Beaudreau |first=Bernard C. |authorlink= |coauthors= |year=1996 |publisher=Authors Choice Press|location=New York, Lincoln, Shanghi |isbn= |pages= |url= }}</ref> Say's law denies the possibility of wide-scale overproduction and for this reason classical economists deny that it had any role in the Great Depression. Mass production allowed the evolution of consumerism by lowering the unit cost of many goods used.

Batch production
From Wikipedia, the free encyclopedia

This article does not cite any references or sources. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (December

Part of a series of articles on


Manufacturing methods

Batch production Job production Flow production

Improvement methods


Information & communication


Process control


Batch production is a technique used in manufacturing, in which the object in question is created stage by stage over a series of workstations. With job production and flow production it is one of the three main production methods.[1] Batch production is most common in bakeries and in the manufacture of sports shoes, pharmaceutical ingredients, purifying water (APIs), inks, paints and adhesives. In the manufacture of inks and paints, a technique called a colour-run is used. A colour-run is where one manufactures the lightest colour first, such as light yellow followed by the next increasingly darker colour such as orange, then red and so on until reaching black and then starts over again.

and Disadvantages

There are several advantages of batch production; it can reduce initial capital outlay because a single production line can be used to produce several products. As shown in the example, batch production can be useful for small businesses who cannot afford to run continuous production lines. If a retailer buys a batch of a product that does not sell, then the producer can cease production without having to sustain huge losses. Batch production is also useful for a factory that makes seasonal items, products for which it is difficult to forecast demand, a trial run for production, or products that have a high profit margin. Batch production also has some drawbacks. There are inefficiencies associated with batch production as equipment must be stopped, re-configured, and its output tested before the next batch can be produced. Idle time between batches is known as downtime. The time between consecutive batches is known as cycle time. Cycle time variation is a Lean Manufacturing metric. Continuous production is used for products that are made in a similar manner. For example, a certain car model has the same body shape and therefore, many of the same model cars can be made at the same time without stop, decreasing manufacturing cost.

What is Aggregate Planning ? - Importance and its Strategies


An organization can finalize its business plans on the recommendation of demand forecast. Once business plans are ready,

an organization can do backward working from the final sales unit to raw materials required. Thus annual and quarterly plans are broken down into labor, raw material, working capital, etc. requirements over a medium-range period (6 months to 18 months). This process of working out production requirements for a medium range is called aggregate planning.

Factors Affecting Aggregate Planning

Aggregate planning is an operational activity critical to the organization as it looks to balance long-term strategic planning with short term production success. Following factors are critical before an aggregate planning process can actually start;

A complete information is required about available production facility and raw materials. A solid demand forecast covering the medium-range period Financial planning surrounding the production cost which includes raw material, labor, inventory planning, etc. Organization policy around labor management, quality management, etc.

For aggregate planning to be a success, following inputs are required;

An aggregate demand forecast for the relevant period Evaluation of all the available means to manage capacity planning like sub-contracting, outsourcing, etc. Existing operational status of workforce (number, skill set, etc.), inventory level and production efficiency
Aggregate planning will ensure that organization can plan for workforce level, inventory level and production rate in line with its strategic goal and objective.

Aggregate planning as an Operational Tool

Aggregate planning helps achieve balance between operation goal, financial goal and overall strategic objective of the organization. It serves as a platform to manage capacity and demand planning. In a scenario where demand is not matching the capacity, an organization can try to balance both by pricing, promotion, order management and new demand creation. In scenario where capacity is not matching demand, an organization can try to balance the both by various alternatives such as.

Laying off/hiring excess/inadequate excess/inadequate excess/inadequate workforce until demand


Including overtime as part of scheduling there by creating additional capacity. Hiring a temporary workforce for a fix period or outsourcing activity to a sub-contrator.

Importance of Aggregate Planning

Aggregate planning plays an important part in achieving long-term objectives of the organization. Aggregate planning helps in:

Achieving financial goals by reducing overall variable cost and improving the bottom line Maximum utilization of the available production facility Provide customer delight by matching demand and reducing wait time for customers Reduce investment in inventory stocking Able to meet scheduling goals there by creating a happy and satisfied work force

Aggregate Planning Strategies

There are three types of aggregate planning strategies available for organization to choose from. They are as follows. 1. Level Strategy As the name suggests, level strategy looks to maintain a steady production rate and workforce level. In this strategy, organization requires a robust forecast demand as to increase or decrease production in anticipation of lower or higher customer demand. Advantage of level strategy is steady workforce. Disadvantage of level strategy is high inventory and increase back logs. 2. Chase Strategy As the name suggests, chase strategy looks to dynamically match demand with production. Advantage of chase strategy is lower inventory levels and back logs. Disadvantage is lower productivity, quality and depressed work force.


Hybrid Strategy As the name suggests, hybrid strategy looks to balance between level strategy and chase strategy.

Work order
From Wikipedia, the free encyclopedia

A work order (known as works order outside of the United States because the work is produced in a manufacturing area known as the works) or job order (sometimes job ticket or work ticket, as it often has some type of ticket attached) is an order received by an organization from a customer or client, or an order created internally within the organization. A work order may be for products or services. In a manufacturing environment, a work order is converted from a sales order to show that work is about to begin on the manufacture, building or engineering of the products requested by the customer. In a service environment, a work order can be equivalent to a service order where the WO records the location, date and time the service is carried out and the nature of work that is done. The type of personnel (e.g. job position) may also be listed on the WO. A rate (e.g. $/hr, $/week) and also the total amount of hours worked and total value is also shown on the work order. A work order may be a maintenance or repair request from students, faculty or staff in a university.[1][2] Orders received from outside an organization are often dispatched (reviewed and scheduled) before being executed.[3] [4]Work orders may be for preventive maintenance[5] Contractors may use a single job work order and invoice form that contains the customer information, describes the work performed, lists charges for material and labor, and can be given to the customer as an invoice.[6] A job order is an internal document extensively used by projects-based, manufacturing, building and fabrication businesses. A job order may be for products and/or services. In a manufacturing environment, a job order is used to signal the start of a manufacturing process and will most probably be linked to a bill of material. Hence, the job order will probably state: 1. the quantity of the product to be manufactured, built or fabricated 2. the amount of raw material to be used, its price and amount 3. the types of labour required, rate (per hour or per unit) and amount 4. the machine utilisation for each machine during the routing process, its rate and amount

In a service environment, a job order can be the equivalent to a work or service order where the job order records the location, date and time the service is carried out and the nature of service that was carried out. The type of personnel (e.g. job position) may also be listed on the job order. A rate (e.g. $/hr, $/week) and also the total amount of hours worked and total value is also shown.