PPC Notes Unit - 1

MARRILAXMAN REDDY INSTITUTE OF TECHNOLOGY AND MANAGEMENT
Production planning and control lecture notes by v.v.sudheerbabu
UNIT-1
INTRODUCTION P.P.C
We will be shouldering the responsibilities of executive of tomorrow so it is to

understand methods, plans, various techniques that are essential to operate the
effectively and efficiently. For this purpose we must have the knowledge of
PPC.This is also true that this subject intervene into many departments of
industrial organization, their relations with these departments are explained in
first few topics.This basic objective of creating the manufacturing organization
is to make the products. Thus the production is the nucleus or the centre of entire
business operations. It must be emphasized, however, that on signal system of
forecasting, preplanning, planning and control is suited to all industrial
enterprises, no matter how well it may meet the needs of this on that special
company. PPC functions look after the manufacturing activities.PPC comprise
the planning, routing, dispatching in the manufacturing process so that the
movement of material, performance of machines and operation of labour
however are subdivided and are directed and coordinated as to quantity, quality,
time and place. Planning and control are two basic and interrelated managerial
functions. They are so interrelated that they can be and often are considered as
being one function. Planning is the preparation activity while control is the post-
operation function. Both of them are so closely related that they are treated as
Siamese twins. Planning sets the objectives, goals, targets on the basis of
available resources with their given constraints. Control is the integral part of
effective planning. Similarly control involves assessment of the performance,
such assessment can be made effectively only when some standard of are set in
advance. Planning involves setting up to such standard. The controlling is made
by comparing the actual performance with these present standard and deviations
are ascertained and analyzed.Production is an organised activity of converting
Mr.V.V.Sudheer Babu, Asst Prof.

raw materials into useful products but before starting that work of actual
production, production planning is done in order to anticipated possible
difficulties and decide in advance as to how the production should be carried out
in the best and economical way.Since mere planning of production is not only
sufficient, hence management takes all possible steps to see that project or plan
chalked by the planning department are properly adhered to and the standards
set are attained in order to achieve it, control over production is exercised. The
aim of production control is to produce the products of right quality, in right
quantity at the right time by using the best and least expensive methods.PPC
thus defines as the process of planning the production in advance, setting the
exact route of each item give “production order” to shops and lastly to follows
up of progress of produces according to order. The principles of PPC gives in the
statement, “First plan your work, then work your plan”.There are few other
department associated with PPC are personnel department, manpower planning,
costing department etc. Design department is important one as “ The design is
the problem of anticipating or trying to do what will be required in future and
improving what is being already produced.
1.2 PREPLANNING, PLANNING & CONTROL

The activities of preplanning, planning and control may be considered to
take place in a time sequence. The preplanning is completed before
production commences. Planning takes place immediately before
production starts and control is exercised during production.
Preplanning :
It is the procedure followed in developing and designing a work or
production of a developing and installing a proper layout or tools. It may
be involved many functions of the organization and draws upon

forecasting, product design, jigs and tool design, machine selection and
estimating to enable proper design to be made. In short, preplanning
decides what shall be made and how it shall be made.In respective
manufacture a large uneconomic output could be produced if
preplanning is omitted. It is also important in one of the operations such
as setting up a new plants as preplanning can identify and avoid probable
costly errors.
Planning :
This stage decides where and when the product shall be made. It includes
the sequencing of operations viz outing and the time schedule for
manufacturing viz scheduling. It also states procedures for material
planning and supplies, machine loading and deliveries. To perform as
functions properly it will need past records of performance and to control
statistic which may be obtained from pre-planning, cost control or progress.
Control :
This refers to the stage of ensuring that the planned action is in tact carried
out. Control initiate the plan at the right time using dispatching and there
after control makes appropriate adjustments through progressing to take
care of any unforeseen circumstances that might arise. It includes
measurement of actual results, comparison of the same with the planned
action and feeding back information the planning stage to make any
adjustments required. The pattern of control is seen in material control,
machine utilization, labour control, cost control and quality control.

1.3 PROJECT PLANNING OR PREPLANNING:
Before starting every project its planning is done. Planning a

project is a very important task and should be taken up with great care as
the efficiency of the whole project largely depends upon its planning.
While planning a project each and every detail should be worked out in
anticipation and should be considered carefully considering all the
relevant provisions in advance. Project planning consists of the
following important steps.
Market Survey :
Market survey in a broad sense, is a commercial survey for the suitability of

business it provides necessary statistics helpful for forecasting planning project.
Project Capacity :
Capacity of the project must be decided considering the amount of money which
can be invested for particular type of product and how the money which can be
invested for a particular type of product and how the money can be arranged.
While deciding the capacity of the project, following factors must be
considered.Demand of the product in the market.Quantity of power, water, land
and raw material available.Nature of product.investment capacity.
Selection of Site :
While selecting the site, technical, commercial and financial aspects should
thoroughly be considered. Site should be selected in two states; in first stage
general location for factory should be selected in this location. Important factors
to be considered for the selection of site.General location of the factory.Selection
of exact site.

Plant Layout :
One of the most important aspects of production system design is layout of

facilities primary object of these is to optimize the arrangements “ 4 m’s” and
supping services.
Design and Drawing :
After deciding the product its detailed drawing are prepared so that no
doubt is left for future. Detailed specifications for raw materials and
finished product should be decided carefully along with the specification of
the machines required for their manufacture.
Material requirement :
The list of materials required for manufacture is prepared from the

engineering drawings. This list is known as “Bill of materials” part list”
Operation Planning :
Work of this is to select the best method of manufacturing, so that

the wastage of material, labour, machine and time can be eliminated, to
have more production with less fatigue. This work is done in two phases,
namely. Method study is conducted to eliminate the wastage due to ill
directed and inefficient motions. Time study is the exact estimation of
time and is very essential for correct pricing.
Machine loading :
Number of machines to be installed in a plant should be decided

very carefully while planning, proper care should be taken to find out the
machining time for each operation as correct as possible, so that
arrangement for full utilization of machines can be made and machines
loading program is prepared accordingly.
Sub-contract consideration :
With the development of technology and specialization, it is

difficult to manufacture all the components in the same factory, due to
fact that specialized machines plants and workers.
The decision about particular item, whether to purchase or to

manufacture, is taken by planning department after making a through
study of the relative merits and demerits.
Equipment Requirement :
After knowing the number of equipments, their accessories and

tools required, cost data can be collected to give and idea of capital
requirement.
Organisational Layout and staff Requirement :
Layout of organisation is decided by considering the nature of

work, type of industry size of industry, etc and in line of above the stalls
are appointed.
Material Handling :
The material handling problems must be studied before the

erection of the factory building and plant layout.
Budgeting :
Budgeting is forecasting and preplanning for a particular future

period using past experience and market trends.

Cost Calculation :
Total cost of a product is calculated by adding the expenses incurred during the
period on a product.
Procurement of Finance :
Generally large industries manage their block capital through partners and
shareholders. While the working capital arranged through ‘shares debentures,
loans and banks.
Critical Report on Feasibility :
Generally, rate of return on the invested capital is taken as the criteria for
analysing the feasibility of the project.
1.4 PLANNING
Planning is exercise of intelligent anticipation in order to establish how an

objective can be achieved, or a need fulfilled, in circumstances which are
invariable restrictive.
Planning provides the supporting arithmetic for an objective which has already
been decided. It does not establish whether the objective is right or wrong, good
or bad, worthwhile or worthless except in terms which have also been decided
beforehand. Consequently, only plan is invariably biased in favour of the chosen
objective. Incidentally, to attack it on this count is rather like shooting the
plainest and setting fire to the plans, not because the plainest is playing badly or
the plans are out of the tune, but simply because one does not like the music
which is being played.

Planning is an act of prediction, the accuracy of which varies enormously

depending upon the kind of objective, kind of circumstances, the skill of the
planner and his techniques and chance.
Planning is necessary because resources are limited. Production planning

activities originate at the aggregate level and consider decisions relevant to a
specific planning horizon. A planning horizon can be a period as short as four
weeks a month, or a quarter (03 weeks) but more commonly refers to periods of
from six months to a year or more.
The aggregate planning problem is to determine the production rate which

satisfies the anticipated output requirements; while minimizing the related costs
associated with the fluctuation of work force, inventories, and other relevant
decision variables such as overtime hours subcontracting and capacity
utilization. Production planning translated sales forecast into master production
schedules. There are three distinct types of production planning:
1.5 THE CONCEPTS OF PRODUCTION PLANNING AND SCHEDULING

The concept of production planning is probably best defined by reversion
that to read “The planning of production”. As used here, it refers to the
establishment of policies, procedures, and facilities for manufacturing
operations to produce product required for future. It is ultimately tied to
both capacity planning and product determination in which products will be
produced and in what quantities and is future oriented. It looks ahead
ensure that the inputs consists not only of machinery and raw materials but
of people skills, control systems funds and various types of inventories. In
essence, production planning make sure that everything is available on time
to meet the production target manufacturing system is circumscribed by
various limiting factors such market price quality delivery requirements,
funds availability and inherent product restrictions like process time or

special storage requirements. Planning must take these into account so as to
ensure task performance with both limitations and objectives.
Scheduling, on the other hand, is more specific and less oriented to the
future scheduling accepts current conditions like available machinery,
manpower and material etc on provides as detailed pots for utilizing there
facilities to achieve immediate product objectives. A scheduling starts with
the desired end results and provides BLUE-PRO for accomplishing the task
on hand. Schedules may be as specific as time and cost per. They may
outline general steps needed to complete a task or they may lay down
specific operations, starts times completion times etc. Often the more
specific a schedule is the better it can be used as a production control
device.
It is important to note that the division between planning, scheduling an

control is artificial. Much of the value of production plans and scheduled
are lost if procedures do not exist to provide information feedback, how
well are plans functioning? How well as the schedules being adhered to ?
These are important inputs, not just because they permit measurement of
planning and scheduling abilities, but also because they provide cards
warning of deviations and permit corrective action at early stages. They
also provide usefulmanagerial developments tools and valuable information
for future planning efforts.The inventory control is the related aspect under
production control, through inventors control is a complex attain involving
both cost and the use of certain important

concept and techniques. The amount inventory on hand will affect

production plans as well as customers delivery and the form of inventory
like raw or finished material, and the good at various stages of processing.
It is readily apparent the need for adequate production planning,

especially in situation where long lead time are required to change
production capabilities. Requirement of rare work force skills of imported
equipment or raw materials of expanded plants of facilities can often
severally reduce a companies, abilities to meet changing market condition
considerable advance planning is done, a manufacturing limitation and it
self was insufficient productive capabilities or with an over supply of
absolute limited goods.
1.6 PRODUCTION
Implementation is the stage of the project when the theoretical design

is turned in to working system.
Implementation phase involves the staff of user departments carrying

out specific tasks which require supervision and control to critical
schedules.
Production is the process by which goods and services are created.

Production systems combine materials, labours, and capital resources in an
organised way with the objective of producing some goods or service.
Production system may occur in factories, banks, stores, hospitals etc. In all
instances, some input to the system is being processed within the system to
produce a goods or services as an output; we are in fact dealing with the
operations phases of any enterprise.
‘Creation’ of goods and services of production, to perform this

function, the production system require inputs from other subsystems of the
organization, such as service inputs ( e.g. maintenance, supervision, plant
layout, design etc.) and control inputs (e.g. measurement, data processing,
planning, control, order and sales information processing, forecasting etc.).
Three main factors may be said to determine the place of production

planning and control in an organization.
The type of production i.e. the quantities of finished products and the
regularity of manufacture.
Size of the plant.
The type of industry i.e. the field of specialization of the plant.
Industries can be classified into types by several methods; by

availability of different kinds of labour in different geographical locations,
by the demand for different grades of skills, and by the factors relating to
investment policy.
1.7 THE MAIN OBJECTIVES OF PRODUCTION PLANNING

To determine capacity of all manufacturing departments
and to plan systematically coordinated and related production activities
within the scope of the enterprise to meet sales requirements.
To translate orders received from sales department into orders on the

works department and to ensure steady plans of production activities.
To find ways and means through which product manufacturing
requirements such as materials and their necessary constituents such may be
available in right quality and quantity at the right time.
1.8 CONTROL
The principles of control are the same for production control, quality
control, budgetary control, cost control and other managerial controls. The
basic cycle of events in the control are Action, Feedback, Evaluation and
Adjustment. Since these events are dynamically in continuous they take the
form of a closed-loop circuit. There are seven essential steps in the
establishment and application of operating controls.
Operation :
The first step in the control cycle is operation. In this step, the act of
doing something, some faults will be obvious and, therefore, easily
corrected. Other faults will be more deceptively concealed requiring the
steps that follow to reveal them so that they can be dealt with.
Measurement :
The second step is so measure what is being done. In the field of

quality control for example, variations in physical, chemical, electrical,
dimensional and other properties are measured. In production control, all
operations are measured to determine the time require
automatic electronic and mechanical operations must be measured

accurately in terms of milliseconds before a whole system can be
integrated.
Capabilty Studies :
Analysis of measurements in step two, aided by many reliable

statistical technique gives an accurate projection of what actually can be
done.In production control we need to know quality process capabilities so

that scrap and defer losses can be figured. Studies of process capabilities tell
us what we can do.
Objectives :
After we discover what we can do, we are ready to figure out what
we should as this may either be more or less than our capabilities. This
decision then leads to plans for using excess capabilities on other plans to
increase capabilities either for quality or quantity so that the objective can
be met
Evaluations :
As the information is fed back from operations, it is compared with

plans and objectives other evaluations are used to adjust budgets and costs
Adustment :
The last step in production control is adjustment. Production control

adjustments are complicated because they often require increasing or
reducing quantities based upon past operation and sales in quality control
adjustments are made to maintain product quality requirement within limits.
Feedback & Flexibility :
It we shoot at the target but cannot tell how close to the balls eye or
bullet hits out next shot is likely to be no better than first. But if we do know
where the first shot has hit, we can adjust the aim for next one and thus
improve our marksmanship. Information received after the performance o
an action in time to be used as the basis for future,performance is known as
feedback, it is the vital control.for their performance and the capacities of
equipment with which work is done.The keys to successful plant
implementation are feedback and flexibility. Information must be provided

to measure actual progress against the planned and when discrepancies

exists, the manufacturing enterprise must be flexible enough to shift, if
necessary. This implies the establishment of details, benchmarks during the
planned period. Measures of progress, explicit statements concerning the
assumptions made about the operating environment and a formal procedure
for analyzing the process.“Doubling production within two years” is not a
plan. It is a goal. The plan must indicate how this will be done, when the
various steps will begin and be completed and what assumption underline
the plan and goal. As the plan is being implemented, frequent checks are
required to determine whether or not things are proceeding on schedule e.g.
ordering of machinery, training of new workers, behaviour of market. The
cause behind any discrepancies must be examined. Only then we will know
whether to speed up or slow down present rate or progress or a shift is
required ?
1.9 WHAT IS FUNCTIONS OF PPC :
The highest efficiency in production is obtained by manufacturing the

required quantity of product of required quality, at the required time by best
and cheapest method. To certain this objective management employs PPC
tool which coordinates all manufacturing activities. The main functions of
PPC are the coordination of all the activities, which exist during production
or manufacturing.
Materials :
Raw material, standard finished parts, finished parts of products must

be available while starting the operation within the time.

Methods :
The purpose of this function is to analyze all methods of manufacture and select
the best method according to the given set of circumstances and facilities. It
determines the sequence of operations and the division of product into the
assemblies and sub-assemblies, modified by the limitation of existing layout and
work flow.
Machines And Equipments :

Methods of manufacturing have to be related to the available production
facilities coupled with a detail study of equipment replacement policy.
Maintenance policy, procedure and schedules are also functions connected with
managerial responsibilities for equipment. Design of economy of jigs and
fixtures constitutes some of major duties of PPC.
This section establishes the operation necessary to manufacture the
proper sequence on route sheet and operation sheet.
Determination of lot sheet. It depends primarily upon the

manufacturing involved. If the product is to be manufactured strictly to a
sold order, the customers order plus a certain average or allowance of stock,
the lot size depends upon the primary of economic lot quantities etc., the
quantity to manufacture so that for which the sum of the set-up and other
preparation cost and the cost of carrying an inventory of the article
manufactured at the minimum.
Determination of scrap factor : Is the anticipated normal scrap

encountered in the course of manufacturing. The difference of amount of
“SHRINKAGE’ depends upon the scrap factor encountered in the process

best practice dictates the establishment of standard scrap factors for use in
routing and scheduling.
Analysis of cost article : It includes cost accounting department for

cost estimating of product.
Factors Affecting Routing Procedure:
Manufacturing type employed.
Availability of plant equipment and its component parts.
Characteristic of physical plant equipment and its component parts.
Human elements.
Estimating :
When production orders and detailed operation sheet available with
specification feeds, speed and use of auxiliary attachments and method, the
operation time can be worked out. It may be consequently results in wide
scatter of operation times and unduly large fluctuation and perhaps instabilities
in time schedules.
Loading & Scheduling :
Machines have to be loaded according to their capabilities

performance the given and according to the capacity. Machine loading is

carried out in connection with routing to ensure smooth work flow work
estimating, to ensure that the prescribed methods feeds and speed are best
utilized. Careful analysis of process capacities so that flow rates along the
various production lines can be suitable coordinated.The distinction
between planning and scheduling is largely semantically and based upon
difference in detail and time period.The schedule is very detailed plan for an
immediate and relatively short time period. The difference between the plan
and the schedule can be illustrated by looking at the objectives. The plan
may ask to double production within two years. The schedule will to
produce 300 units of articles during week number 1,200 units during week
and so on.Scheduling often refers to the specific determination of what is
going to the production during the next few weeks or months. This involves
determination of the individuals machines that are going to produce the
items when they will be started and completed what quantities ( lot or Batch
sizes ) they will be produced and with what materials. But many other
activities are also scheduled such as maintenance, movement of goods and
materials and oven staff meetings. In essence, a schedule is a detailed
statement of how when and where specific resources are going to the
employed to produce specified output or results.At this levels of detail, the
schedules is often in separable from the control system e.g. the financial
areas, a budget can be regarded as a schedule of funds usage. On the hand,
the budget is also an integral part of the control system for monitoring
expenditure. The schedule thus provides a short range sequence of activities
one for which we must have sensitive controls and rapid response time.
Scheduling can be very simple or very complex. Perhaps the most

simple type schedule can be illustrated by an example drawn from cottage
industry. A worker may be asked to produce as given number of work
carvings or square meters of handloom fabric per week. The control is very

simple and consists primarily of a count made each week, when the goods
are lifted by employer.
TYPE:
Materials :
To follow up purchased materials is responsibility or purchasing
department. This can be accomplished most simply by filling one copy of
requisition in a daily follow up file or in ticket file according to the date of
materials is due to be received.
Work in progress :
This follow up the work by checking the process and recording the
production accomplished by production line for comparison purpose with
preplanned schedules. It is the duty of follow-up men or expediters to advise
the foreman as to the best sequence in which the orders can be run so as the
required part in which order to be fabricated and brought it together at right
time, place for the completion of finished product.
Assembly and Erection :

Responsibility for assembly and erection of products in assembly
manufacturing is almost invariably rested. When all the parts of an
available, the follow up man permits assembly of election of products in
start in case of large complicated product this is very necessary.
Inspection :
Another major control is inspection. Its finding land criticism are of the
importance both in execution of current program and both in planning stage of
fibre undertaking when the limitations of the processor, method and manpower
are known. These limitations can form a basis for future investigations in
evaluating the showed improving production methods
Evaluating :
Perhaps the most neglected, but on an essential link between control and
forwarding is that of evaluating. The essential task of dispatching and
evaluating are concerned with the immediate issue of production and with
measures that will be as certain fulfillment target. Valuable information is
gathered limited in nature and unless provision is made so that all the
accumulated information can be properly digested and analyzed data may
be irretrievable lost. Thus here the evaluating function comes in to provide a
feedback mechanism on the longer term basis so that the past experience
can be evaluated with the view to improving utilization of method and
facilities. This is the integral part of control functon.Follow up is that novel
tool which acts as a regulator of material and components parts when they
are traveling on the path of performance as laid down by sheets and
schedule charts. It serves as a catalytic agent to fuse the various separate an
unrelated production activities into the unified whole that means progress.
1.10 TYPES OF PRODUCTION SYSTEM

Broadly one can think of three types of production systems
which are mentioned here under: -
Continuous production
Job or unit production
Intermittent production
Continuous production
It refers to the production of standardized products with a standard set of
process and operation sequence in anticipation of demand. It is also known as
mass flow production or assembly line productionThis system ensures less
work in process inventory and high product quality butinvolves large

investment in machinery and equipment. The system is suitable in 117plants
involving large volume and small variety of output e.g. oil refineries reform
cement manufacturing etc.
Job or Unit production: -

It involves production as per customer's specification each batch or order
consists of a small lot of identical products andis different from other
batches. The system requires comparatively smallerinvestment in machines
and equipment. It is flexible and can be adapted tochanges in product design
and order size without much inconvenience. This system is most suitable
where heterogeneous products are produced againstspecific orders.
Intermittent Production:
Under this system the goods are produced partly for inventory and partly for
customer's orders. E.g. components are made forinventory but they are
combined differently for different customers. . Automobileplants, printing
presses, electrical goods plant are examples of this type ofmanufacturing.
1.11 PRODUCT DESIGN

Product design is a strategic decision as the image and profit earning capacity
of a small firm depends largely on product design. Once the product to be
produced is decided by the entrepreneur the next step is to prepare its design.
Product design consists of form and function. The form designing includes
decisions regarding its shape, size, color and appearance of the product. The
functional design involves the working conditions of the product. Once a
product is designed, it prevails for a long time therefore various factors are to
be considered before designing it. These
factors are listed below: -
(a) Standardization
(b) Reliability
(c) Maintainability
(d) Servicing
(e) Reproducibility
(f) Sustainabilit
(g) Product simplification
(h) Quality Commensuration with cost
(i) Product value
(j) Consumer quality
(k) Needs and tastes of consumers.
Above all, the product design should be dictated by the market demand. It is
an important decision and therefore the entrepreneur should pay due effort,
time,energy and attention in order to get the best results.
1.13 Types of Production Systems

A production system can be defined as a transformation system in which a saleable
product or service is created by working upon a set of inputs. Inputs are usually in
the form of men, machine, money, materials etc. Production systems are usually
classified on the basis of the following:
 Type of product,
 Type of production line,
Rate of production,
 Equipments used etc
They are broadly classified into three categories:

 Job shop production
 Batch production
 Mass production
Job Production
In this system products are made to satisfy a specific order. However that order may
be produced-
Only once, at irregular time intervals as and when new order arrives, at regular
time intervals to satisfy a continuous demand
The following are the important characteristics of job shop type production
system:
 Machines and methods employed should be general purpose as product

changes are quite frequent.
 Planning and control system should be flexible enough to deal with the
frequent changes in product requirements.
 Man power should be skilled enough to deal with changing work conditions.
 Schedules are actually nonexistent in this system as no definite data is
available on the product.
 In process inventory will usually be high as accurate plans and schedules do not
exist.
 Product cost is normally high because of high material and labor costs.
 Grouping of machines is done on functional basis (i.e. as lathe section, milling
section etc.)
 This system is very flexible as management has to manufacture varying product
types.
 Material handling systems are also flexible to meet changing product
requirements.
Batch Production
Batch production is the manufacture of a number of identical articles either to meet a
specific order or to meet a continuous demand. Batch can be manufactured either-
 only once
 or repeatedly at irregular time intervals as and when demand arise
 or repeatedly at regular time intervals to satisfy a continuous demand
The following are the important characteristics of batch type production system:

As final product is somewhat standard and manufactured in batches, economy

of scale can be availed to some extent.
Machines are grouped on functional basis similar to the job shop
manufacturing.
Semi automatic, special purpose automatic machines are generally used to take
advantage of the similarity among the products.
Labor should be skilled enough to work upon different product batches.
In process inventory is usually high owing to the type of layout and
material handling policies adopted.
Semi automatic material handling systems are most appropriate in conjunction
with the semi automatic machines. Normally production planning and control
is difficult due to the odd size and non repetitive nature of order.
Mass Production
In mass production, same type of product is manufactured to meet the continuous
demand of the product. Usually demand of the product is very high and market is
going to sustain same demand for sufficiently long time.
The following are the important characteristics of mass production system:
As same product is manufactured for sufficiently long time, machines can be laid
down in order of processing sequence. Product type layout is most appropriate for
mass production system.
Standard methods and machines are used during part manufacture.
Most of the equipments are semi automatic or automatic in nature.
Material handling is also automatic (such as conveyors).
Semi skilled workers are normally employed as most of the facilities are automatic.
As product flows along a pre defined line, planning and control of the system is much
easier.
Cost of production is low owing to the high rate of production.
In process inventories are low as production scheduling is simple and can be
implemented with ease.

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.
5. Main elements of Production Planning & Control
6. Some of the important elements involved in the process of production planning

and control in organization are: (a) Planning; (b) Routing; (c) Scheduling; (d)
Despatching; (e) Checking the progress or follow-up and (f) Inspection.
7. (a) Planning:
This is the first and the most important element of production planning and
control. Planning refers to deciding in advance what is to be done in future. A
separate planning department is established in the organisation which is
responsible for the preparation of policies and plans with regard to production
to be undertaken in due course.
While explaining the concept of scientific management, F.W. Taylor

emphasised the need of separating planning function from the function of actual
operation in an organisation. For successful implementation of production
control, production planning is of utmost importance. The planning department

prepares various charts, manuals production budgets etc., on the basis of
information received from management.
These plans and charts or production budgets are given practical shape by
carrying various elements under production control. If production planning is
defective, production control is bound to be adversely affected. For achieving
the production targets, production planning provides sound basis for production
control.
(b) Routing:
Production routing is a process concerned with determining exact route or path,

a product has to follow right from raw material till its transformation into
finished product. A few definitions of routing can be cited here:—
“Routing may be defined as the selection of paths or routes over which each
piece is to travel in being transformed from raw material into finished product”.
“Production routing involves the planning of the exact sequence of work

stations to be used in processing a part of product. Once a layout has been
established the routing of an item is the determination of the path that item
should follow as it is manufactured”. —James C. Lundy
“Routing is the specification of the flow or sequence of operations and

processes to be followed in producing a particular manufacturing lot”.
“Routing includes the planning of where and by whom work shall be done, the
determination of the path that work shall follow and the necessary sequence of
operations; it forms a groundwork for most of the scheduling and dispatching
functions of planning department.”

The above mentioned definitions clearly lay down that routing is concerned
with the selection of the most economical and appropriate path for the product
in the process of final completion from raw material to finished product.
Objects of routing:
The main objective of routing is to lay down the best and the most economical
sequence of operations to be undertaken in the process of production. Another
objective of routing is to determine proper tools and equipments and the
required number of workers required for doing or carrying total production
processes in an organisation.
Routing becomes automatic and continuous in case of continuous

manufacturing units where standardized products are produced by undertaking
standardized production operations.
On the other hand, in case of job order units or intermittent- process industries
such as ship building, every product requires different designs and varying
sequences of operations.
Procedure followed in routing:
In case where a new product is going to be produced, different steps are

involved in a total routing procedure. These steps are:
(a) Complete analysis or study of the product as to decide what parts of the
product are to be manufactured and what may be purchased from the market.

(b) Analysis of the article so as to know what sorts of materials are needed for
producing the article or product. This includes the complete study with regard
to quality, quantity, kind and grade of materials required.
(c) To determine different manufacturing operations and their sequence. This

can be worked out by knowing accurately about the machines and their layout.
This also necessitates the knowledge of allied equipment, jigs, tools and
implements needed for efficient production.
(d) Determining lot to proper size in relation to order placed by the customers.
(e) Possibility of scrap in manufacturing a product must be properly

determined. Anticipated scrap should be compared with actual scrap. Steps
should be undertaken to control excess scrap.
(f) Determination of the cost of the article or the product produced must be
properly worked out. Calculation of total cost and per unit cost production is
primarily the job of costing department, but still cost estimates pertaining to
direct material, direct labour, direct expenses and indirect expenses and
overheads must be prepared by the production department. These estimates will
be greatly helpful for the costing department.
(g) Complete information pertaining to different types of production control

forms viz., time and job cards, inspection cards and tool tickets, etc. must be
kept by the works manager. This will be very helpful in carrying planned and
systematic production.
(h) Preparation of route sheets is another important step in routing procedure.

Route sheets relate to specific production orders. One sheet is prepared for each
part or component of the product.

Route sheets also indicate the sequence of operations to be undertaken and also
contain various requirements of production viz., men, materials and machinery
etc. Route sheets also indicate total number of pieces to be produced and
number of pieces to be included in each lot where production is carried in lots.
It must be remembered that routing is a complex and tedious process as such it

should be entrusted to an expert who knows all the intricacies and complexities
of production operations.
A number of factors viz. human considerations, plant layout, type of production

undertaken and processes employed and type of equipment being undertaken
must be kept in mind before selecting a proper route for production.
(c) Scheduling:
Scheduling in simple words means fixation of time and date when each
operation is to be commenced and completed. It is an important part of
production control as all future process of production is based on it. Scheduling
lays down ground work for all subsequent steps in production process.
A few definitions of scheduling are given as under:
“The determination of the time that should be required to perform each

operation and also the time necessary to perform the entire series as routed,
making allowance for all factors concerned.”
“Scheduling involves establishing the amount of work to be done and the time
when each element of the work will start, or the order of work. This includes
allocating the quality and rate of output of the plant or department and also the
date or order of starting each unit of work at each station along the route
prescribed.”

“Work Scheduling consists of the assignment of starting and completion times

for the various operations to be performed.”
“The detailed planning of material, labour and machine time, so that materials
and parts will be at the right place and at the right time so that a job can be
completed within the time planned and in accordance with the requirements.”
From the above mentioned definitions, it is clear that scheduling is concerned

with allocating time for each operation of production and finally total time in
the completion of production.
Types of scheduling:
Scheduling is of three types viz:
(a) Master scheduling;
(.b) Manufacturing or operation scheduling;
(c) Retail operation scheduling.
(a) Master scheduling:
It relates to a specified period; say a month, a week or a fortnight. It contains

production requirements of a single product or different products during the
specified period of time. It is easier to prepare master schedule for a single
product, but difficulty arises where the number of products are more. It is also
known as over-all schedule.
The preparation of master schedule varies from industry to industry according

to type of production undertaken by them. Master schedule usually contains
information pertaining to direct material requirements, estimated requirements

in man-hours per product at various work centres and estimated overhead

expenses etc.
(b) Manufacturing or operation scheduling:
Manufacturing schedules are prepared in case of process or continuous type of

industries. In case of mass production industries, where uniform products of
same size, colour and design etc., are produced, manufacturing schedules can be
easily prepared.
But in case where a product is produced in different sizes, quantity, colour and
design, it is bit difficult to prepare manufacturing schedule. The important
information contained in this schedule relates to name, number of the product,
quantity to be produced each day, week or any other stipulated time.
(c) Detail operation scheduling:
This type of schedule relates to allocation of time for each production operation
within each machine and manufacturing process in the organisation.
Both routing and scheduling are important elements in the process of product
control. They are interdependent on each other. Proper route cannot be assigned to
a product without proper schedule, at the same time schedules cannot be prepared
properly without the knowledge of exact route of production.
(d) Dispatching:
Dispatching relates to the process of initiating production in accordance with pre-

conceived production plan. It is concerned with giving practical shape to the
production plan. This includes issuing necessary orders and instructions and other
important guidelines and information pertaining to work.

Some important definitions of dispatching are enumerated here: “A good

definition of dispatching is the routine of setting productive activities in motion
through the release of orders and instructions, in accordance with previously
planned times and sequences, embodied in route sheet and schedule charts.”
“Despatches put production in effect by releasing and guiding manufacturing

orders in the sequence previously determined by route sheets and schedules.”
“The despatching function involves the actual granting of permission to proceed

according to plans already-laid down. This is similar in case of the traveller, to
his employer finally approving his vacation leave.”
Procedure or steps followed in dispatching:
Following steps are undertaken in discharging the function of dispatching’:
1. Issuing materials from stores to different production processes.
2. Assignment of work to various machines and work places.
3. Procuring necessary tools, equipment and fixtures to be issued to workmen as

and when needed.
4. Issuing necessary work orders, giving instructions and other information with
regard to work to the workers.
5. To record and maintain the time taken from starting to completion of each job
and also recording the total production time.
6. After the completion of work, all tools, implements, drawings and charts etc.,
to be returned to respective issuing departments.

7. Recording idle time of machines and workers.
a. To have liaison with routing and scheduling departments for effective

performance.
Types of Despatching:
Despatching is of two types viz.,
(a) Centralised and
(b) Decentralised.
(a) Centralised despatching:
Under this system there is a centralised despatching section from where orders
and instructions are directly issued to workmen and machines. This system of
despatching ensures greater control and flexibility in its operation.
(b) Decentralised despatching:
This is just the reverse of the first method. Under this system, work orders are
sent to the foreman of each department. It is the duty of the departmental head
to adjust the process and sequence of work in accordance with the requirements
of the department.This system minimises production delays, duplication of
postings and other drawbacks involved in centralised dispatching. The most
important drawback of this system is that there are difficulties in achieving co-
ordination in different departments and more clerical work is involved.
Various cards and forms used in carrying the functions of dispatching are:
(i) Material requisitions:

These are sent by workers working on different jobs for getting supply of
materials from stores.
(ii) Job Cards:
These cards are issued to each individual worker who enters his performance
and time taken on a job.
(iii) Move tickets:
These tickets authorize the movement of materials in between various

production operations.
(iv) Tool and gauge tickets:
These tickets authorize the issue of various tools and equipment from stores.
(v) Inspection Cards:
These cards show the quantity of work passed and rejected at each inspection
point.
(e) Checking the progress or Follow-up:
Follow-up or expediting function relates to evaluation and appraisal of work

performed. If goods are to be produced as planned, proper follow up or
expediting must be undertaken. A properly planned follow up procedure is
helpful in finding errors and defects in the work and it also suggests remedial
measures.
In the words of Bethel, Atwater etc.,

“Follow up or expediting is that branch of production control procedure which

regulates the progress of materials and part through the production process” The
function of follow-up is carried by ‘follow-up men’. These men act as
intermediaries between various departments bringing about co-ordination
between them. ‘Follow-up men’ are also referred as expeditors, ‘go-betweens’,
‘stock chasers’ and ‘progress-men’ etc.Follow-up function can be applied in
accordance with product or process layout. Follow up under product layout is
easier to undertake as the follow-up men are responsible for the progress of a
single product from inspection to packing.
On the other hand, follow-up under process layout is difficult to carry on

account of scattered departments. Different follow-up men are appointed in
different department’s viz., lathe department, welding department and finishing
department etc.
In brief the element of follow up is concerned with the following three steps
viz.,
(a) To review the present situation with regard to materials, work-in-progress and
finished products.
(b) Expediting the performance of those departments which lag behind.
(c) Removing obstacles in the way of production for smooth and uninterrupted
flow of production.
(f) Inspection:
This is the last but not the least component in the process of production
planning and control. The function of inspection is primarily carried to ensure
whether desired quality of products has been achieved or not. Inspection is
carried out at different levels of production activity.

“Inspection is the art of comparing materials, product or performance with

established standards.”
Inspection of product at every stage viz., raw material, work in progress or semi
finished goods and finished goods may be undertaken. Plant, machinery,
equipment and tools used in production may also be inspected. For conducting
inspection, specialised laboratories may be set up. The most important benefit
derived from inspection is that it ensures pre-determined quality and minimises
wastage and rejected products.


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MARRILAXMAN REDDY INSTITUTE OF TECHNOLOGY AND MANAGEMENT

Production planning and control lecture notes by v.v.sudheerbabu

We will be shouldering the responsibilities of executive of tomorrow so it is to

Mr.V.V.Sudheer Babu, Asst Prof.

1.2 PREPLANNING, PLANNING & CONTROL

Mr.V.V.Sudheer Babu, Asst Prof.

Mr.V.V.Sudheer Babu, Asst Prof.

1.3 PROJECT PLANNING OR PREPLANNING:

Before starting every project its planning is done. Planning a

Market survey in a broad sense, is a commercial survey for the suitability of

Mr.V.V.Sudheer Babu, Asst Prof.

One of the most important aspects of production system design is layout of

Design and Drawing :

The list of materials required for manufacture is prepared from the

Work of this is to select the best method of manufacturing, so that

Number of machines to be installed in a plant should be decided

With the development of technology and specialization, it is

The decision about particular item, whether to purchase or to

After knowing the number of equipments, their accessories and

Organisational Layout and staff Requirement :

Layout of organisation is decided by considering the nature of

The material handling problems must be studied before the

Budgeting is forecasting and preplanning for a particular future

Mr.V.V.Sudheer Babu, Asst Prof.

Critical Report on Feasibility :

Planning is exercise of intelligent anticipation in order to establish how an

Mr.V.V.Sudheer Babu, Asst Prof.

Planning is an act of prediction, the accuracy of which varies enormously

Planning is necessary because resources are limited. Production planning

The aggregate planning problem is to determine the production rate which

1.5 THE CONCEPTS OF PRODUCTION PLANNING AND SCHEDULING

funds availability and inherent product restrictions like process time or

It is important to note that the division between planning, scheduling an

Mr.V.V.Sudheer Babu, Asst Prof.

concept and techniques. The amount inventory on hand will affect

It is readily apparent the need for adequate production planning,

Implementation is the stage of the project when the theoretical design

Implementation phase involves the staff of user departments carrying

Production is the process by which goods and services are created.

‘Creation’ of goods and services of production, to perform this

Three main factors may be said to determine the place of production

Size of the plant.

The type of industry i.e. the field of specialization of the plant.

Industries can be classified into types by several methods; by

1.7 THE MAIN OBJECTIVES OF PRODUCTION PLANNING

To translate orders received from sales department into orders on the

The second step is so measure what is being done. In the field of

automatic electronic and mechanical operations must be measured

Analysis of measurements in step two, aided by many reliable

Mr.V.V.Sudheer Babu, Asst Prof.

As the information is fed back from operations, it is compared with

The last step in production control is adjustment. Production control

Feedback & Flexibility :

Mr.V.V.Sudheer Babu, Asst Prof.

to measure actual progress against the planned and when discrepancies

1.9 WHAT IS FUNCTIONS OF PPC :

The highest efficiency in production is obtained by manufacturing the

Raw material, standard finished parts, finished parts of products must

Mr.V.V.Sudheer Babu, Asst Prof.

Machines And Equipments :

Determination of lot sheet. It depends primarily upon the

Determination of scrap factor : Is the anticipated normal scrap

Mr.V.V.Sudheer Babu, Asst Prof.