POM Notes for Cycle Test (1)

SRM UNIVERSITY

RAMAPURAM CAMPUS

DEPARTMENT OF MANAGEMENT

STUDIES

Study Material

MBN 510 - Production and Operations

Management

CONTENTS

UNIT - 1

Chapter1 - Overview of Production Management

Chapter 2 - Production System

UNIT – II

Chapter 1 - Product Design

Chapter 2 – Process planning

Chapter 3 – Make or Buy Decisions

Chapter 4 – Modern production management

( CAD,CAM)

UNIT - III

Chapter 1 – Production Planning & Control

Chapter 2 - Demand Forecasting

Chapter 3 – Plant location

Chapter 4 – Plant Layout

Chapter 5 - Capacity planning

Chapter 6 - Inventory control

UNIT – IV

Chapter 1 - Quality Control

By

Mrs.VIJAYA RANI ANANDAN, MBA., M.Phil., (Ph.D).,

Assistant Professor (OG)

Department of Management studies

SRM University

Ramapuram Campus.

Chapter 2 – Work Study ( method study/ time Study/

Work measurement)

UNIT – V

Chapter 1 – Maintenance Management

Chapter 2 – Purchasing

Chapter 3 – Store Keeping

Unit - 1

Chapter - 1

Overview of Production Management

Synopsis

Meaning of POM

Scope of POM

Objectives of POM

Functions of POM

Factors affecting POM

POM relation with other functional areas

MEANING OF PRODUCTION

Production is an intentional act of producing something

in an organized manner. It is the fabrication of a physical

object through the use of men, material and some function

which has some utility e.g. repair of an automobile, legal

advice to a client, banks, hotels, transport companies etc.

The main inputs are materials, Machines, Men ( Labour),

Money and Methods.

INPUTS PROCESS

OUTPUT

Goods & services

Transformation

Materials

Machines

Men

Money

Production and operations management (POM) is

the management of an organization’s production

system.

• A production system takes inputs and converts them

into outputs.

• The conversion process is the predominant activity of a

production system.

• The primary concern of an operations manager is the

activities of the conversion process.

MEANING OF PRODUCTION MANAGEMENT

A few definitions of production management are being

reproduced here under to understand the meaning of the term

clearly:

“Production management is the process of effectively

planning and regulating the operations of that part of an

enterprise which is responsible for actual

transformation of materials into finished products”.

Elwood S. Buffa has defined the term in a broader sense as:

“Production management deals with decision making

related to production process so that the resulting goods

or services are produced according to specifications, in

amounts and by the schedules demanded and at a

minimum cost”.

SCOPE OF PRODUCTION MANAGEMENT

Specifying and accumulating the input resources, i.e.,

management, men, information, materials, machine and

capital.

Designing and installing the assembling or conversion

process to transform the inputs into output, and

Coordinating and operating the production process so

that the desired goods and services may be produced

efficiently and at a minimum cost.

FUNCTIONS OF PRODUCTION MANAGEMENT

a) Product selection and design: the product mix marks

the production system either efficient or inefficient.

Choosing the right products keeping the mission and

overall objective of the organization in mind is the key

to success. It is the design of the product, which makes

the organization competitive or noncompetitive.

b) Activities relating to production system designing:

decision related to the production system design is one

of the most important activities of the production

management. This activity is related to production

engineering and includes problems regarding design of

tools and jigs, the design, development and installation

of equipment and the selection of the optimum size of

the firm. All these areas require the technical expertise

on the part of the production manager and his staff.

c) Facilities location: the selection of an optimum plant

location very much depends upon the decision taken

regarding production engineering. A wrong decision

may prove disastrous. Location should as far as

possible cut down the production and distribution cost.

There are diverse factors to be considered for selecting

the location of a plant.

d) Method study: the next decision regarding production

system design concerns the use of those techniques,

which are concerned with work environment and work

measurement. Standard method should be devised for

performing the repetitive functions efficiently.

Unnecessary movements should be eliminated and

suitable positioning of the workers for different

processes should be developed. Such methods should

be devised with the help of time study and motion

study. The workers should be trained accordingly.

e) Facilities layout and materials handling: plant layout

deals with the arrangements of machines and plant

facilities. The machine should be so arranged that the

flow of production remains smooth. There should not

be overlapping, duplication or interruption in

production flow. Product layout where machines are

arranged in a sequence required for the processing of a

particular product, and process layout, where machines

performing the similar processes are grouped together

are two popular methods of layout. The departments are

layout in such a way that the cost of material handling

is reduced. There should be proper choice of material

handling equipment.

f) Capacity planning: This deals with the procurement of

productive resources. Capacity refers to a level of

output of the conversion process over a period of time.

Full capacity indicates maximum level of output.

Capacity is planned for short-term as well as for long

term. Process industries pose challenging problems in

capacity planning, requiring in the long run, expansion

and contraction of major facilities in the conversion

process.

Tools for capacity planning are marginal costing (Break

Even Analysis), learning curves, linear

programming, and decision trees.

g) Production planning: the decision in production

planning include preparation of short-term production

schedules, plan for maintaining the records of raw

materials, finished and semi-finished stock, specifying

how the production resources of the concern are to be

employed over some future time in response to the

predicted demand for products and services

h) Production control: after planning, the next

managerial production function is to control the

production according to the production plans because

production plans cannot be activated unless they are

properly guided and controlled.

“Production control is the process of planning

production in advance of operations; establishing the

exact route of each individual item, part or assembly;

setting, starting and finishing dates for each important

item, assembly and the finished products; and releasing

the necessary orders as well as initiating the required

follow-up to effect the smooth functioning of the

enterprise.

i) Inventory Control: inventory control deals with the

control over raw-materials, work-in-progress, finished

products, stores, supplies, tools, and so is included in

production management. The raw materials, supplies

etc should be purchased at right time, right quality, in

right quantity, from right source and at right price.

PRODUCTS VERSUS SERVICES

The output is spoken as a “bundle of products and

services” . The line between product & services is not

necessarily always clear. Nevertheless, there are important

differences between them. Products are tangible things that we

can carry away with us, where as services are intangible and

perishable and are consumed in the process of their production.

Products may be produced to inventory and made available “

off-the-shelf” whereas the availability of the services requires

keeping the productive system that produces them in readiness

to produce the services, as they are needed. In addition the

person being served often participates in the productive

process. In product systems, there is very little if any, contact

between the producers and consumer.

PRODUCTS SERVICES

Tangible

Can be produced to inventory

for-off the- shelf” availability

Minimal contact with ultimate consumer

Complex and interrelated processing

Demand on productive systems variable on weekly, monthly, and seasonal basis

Markets served by productive system are regional, national and international

Large units that can take advantage of economies of scale

Intangible and perishable; consumed in the process of their production

Availability achieved by keeping the productive system open for services

High contact with clients or customers

Simple processing

Demand commonly variable onhourly, daily and weekly bases .

Markets served by productive system are usually local

Relatively small units to serve local markets

Location dependent on location of local customers, clients and users

OBJECTIVES OF PRODUCTION/ OPERATIONS

MANAGEMENT

Every system (or organization) has a purpose, certain

objectives & goals to achieve since the objectives of an

organization have hierarchical structure, sub-goals lead to

accomplishment of goals, which contribute, to the achievement

of objectives and eventually the purpose or mission of an

organization .It is very important that these objectives should

be unambiguously identified, properly structured and explicitly

stated.

In general terms, the objectives of an organization may be to

produce the goods/or services in required quantities and of

right quality as per schedule and at a minimum cost.

Thus quantity, quality and time schedule are the objectives that

determine the extent of customer satisfaction. If an

organization can provide for these at a minimum cost then the

value of goods created or services rendered enhances and that

is the only way to remain competitive. Thus various objectives

can be grouped as- performance objectives and cost objectives.

I. Performance Objectives

The performance objectives may include:

a) Efficiency or productivity expressed as output per

unit of input.

b) Effectiveness: It concerns expressed whether a right set

of outputs is being produced. Where efficiency may

refer to “doing things right”, effectiveness may mean

“doing the right things”.

c) Quality: Quality is the extent to which a product or

service satisfies the customer needs. The output has to

conform to quality specifications laid down before it

can be accepted

d) Lead times: Manufacturing lead-time or throughput time is the time

elapsed in the conversion process? Minimization of idle time, delays,

waiting etc. will reduce throughput time.

e) Capacity utilization: Percentage utilization of

manpower, machines etc. is calculated in order to

enhance overall capacity utilization.

f) Flexibility: If the conversion process has the flexibility

of producing a combination of outputs, it is possible to

satisfy a variety of customer needs.

II. Cost objectives

Attaining high degree of customer satisfaction on performance

front must be coupled with lower cost of producing the goods

or rendering a service. Thus cost minimization is an important

systems objective. Costs can be explicit or implicit. These

could be tangible in economic terms or intangible in social cost

terms- such as delayed supplies, customer complaints etc.

While managing production systems we must consider the

visible and invisible, tangible and intangible costs some

examples of these costs are:

Direct and Indirect labour cost

Scrap/rework cost

Maintenance cost

Cost of carrying inventory

Cost of stock outs, storage, back-logging, lost

sales

Cost of delayed deliveries

Cost of material handling

Cost of inspection and Opportunity cost

For the purpose of managerial decision-making, we

should consider the total relevant systems costs

including visible and invisible. A longer term cost

implication rather than only short-term will help in

arriving at better decision.

Types of Production system

Continuous Production Intermittent Production

Batch Production

Assembly line ProductionProcess Productionpr

Job Production

Mass production ( Flow)

POM RELATION WITH OTHER FUNCTIONAL AREAS

1.Human Resource - Recruit people ( Labour) for production

Department activities.

2. Finance – Allocation Funds ( Money) for production

department ( for purchasing land , machinery, materials ect.,)

3.Marketing Department – Making demand forecasting,

customer satisfaction, marketing research etc.,

Unit – I

Chapter – 2

Production system Analytical Synthetic

TYPES OF PRODUCTION SYSTEM

According to Webster, “System is a regular interacting

inter-dependent group of items forming a unified whole”. A

system may have many components and variation in one

component is likely to affect the other components of the

system e. g. change in rate of production will affect inventory,

overtime hours etc. Production system is the framework within

which the production activities of an organization are carried

out. At one end of a system are inputs and at the other output.

Input and output are linked by certain process or operations or

activities imparting value to the inputs. These processes,

operations or activities may be called production system. The

nature of production system may differ from company to

company or from plant to plant in the same firm.

ELEMENTS OF PRODUCTION SYSTEM

(1) Inputs

(2) Conversion process

(3) Outputs

(4) Storage

(5) Transportation

(6) Information

TYPES OF PRODUCTION SYSTEMS

There are two main types of production systems

(1) Continuous system

(2) Intermittent system

I. CONTINUOUS OR FLOW SYSTEM : According to

Buffa, “Continuous flow production situations are those where

the facilities are standardised as to routing and flow since

inputs are standardised. Therefore a standard set of processes

and sequences of process can be adopted”. Thus continuous or

flow production refers to the manufacturing of large quantities

of a single or at most a very few varieties of products with a

standard of processes and sequences. The mass production is

carried continuously for stock in anticipation of demand.

CHARATERISTICS OF CONTINUOUS OR FLOW

SYSTEM:

The volume of output is generally large (mass

production) and goods are produced in anticipation

of demand.

The product design and the operations sequence are

standardised i.e. identical products are produced.

Special purpose automatic machines are used to

perform standardized operations.

Machine capacities are balanced so that materials

are fed at one end of the process and finished

product is received at the other end.

Fixed path materials handling equipment is used

due to the predetermined sequence of operations.

Product layout designed according to a separate line

for each product is considered.

MERITS OF CONTINUOUS OR FLOW SYSTEM:

The main advantage of continuous system is that work

in progress inventory is minimum.

The quality of output is kept uniform because each

stage develops skill through repetition of work.

Any delay at any stage is automatically detected.

Handling of materials is reduced due to the set pattern

of production line. Mostly the materials are handled

through conveyer belts, roller conveyers, pipe lines,

overhead cranes etc.

Control over materials, cost and output is simplified.

The work can be done by semi- skilled workers because

of their specialisation.

DEMERITS OF CONTINUOUS OR FLOW SYSTEM :

Continuous system, however, is very rigid and if there

is a fault in one operation the entire process is

disturbed.

Due to continuous flow, it becomes necessary to avoid

pilling up of work or any blockage on the line.

Unless the fault is cleared immediately, it will force the

preceding as well as the subsequent stages to be

stopped.

Moreover it is essential to maintain stand-by

equipments to meet any breakdowns resulting in

production stoppages.

Thus investments in machines are fairly high.

TYPES OF CONTINUOUS PRODUCTION SYSTEM

(A) MASS PRODUCTION : Mass production refer to the

manufacturing of standardized parts or components on a large

scale. Mass production system offers economies of scale as the

volume of output is large. Quality of products tend be uniform

and high due to standardized and mechanization. In a properly

designed and equipped process, individual expertise plays less

prominent role.

(B) PROCESS PRODUCTION : Production is carried on

continuously through a uniform

and standardized sequence of operations highly sophisticated

and automatic machines are used. Process production is

employed in bulk processing of certain materials. The typical

processing industries are fertilizers plants, petrochemical

plants and milk diaries which have highly automated systems

and sophisticated controls. They are not labour–intensive and

the worker is just an operator to monitor the system and take

corrective steps if called for. On the basis of the nature of

production process, flow production may be classified in

Analytical And Synthetic Production .

In Analytical Process production, a raw material is

broken into different products e. g. crude oil is analysed into

gas, naptha, petrol etc. Similarly, coal is processed to obtain

coke, coal gas , coaltar etc..

Synthetic process of production involves the mixing of

two or more materials to manufacture a product for instance,

lauric acid, myristic acid, stearic acid are synthesised to

manufature soap.

(C) Assembly lines : Assembly lines a type of flow

production which is developed in the automobiles industry in

the U.S.A. A manufacturing unit prefers to develop and employ

assembly line because it helps to the efficiency of production.

In an assembly line, each machine must directly receive

materials from the previous machine and pass it directly to the

next machine. Machine and equipment should be arranged in

such a manner that every operator has a free and safe access to

each machine. Space should be provided for free movement of

fork lifts, trucks etc. which deliver materials and collect

finished products.

II.INTERMITTENT PRODUCTION SYSTEM

ACCORDING TO BUFFA, “Intermittent situations are

those where the facilities must be flexible enough to enough to

handle a variety of products and sizes or where the basic nature

of the activity imposes change of important characteristics of

the input (e.g. change in the product design). In instances such

as these, no single sequence pattern of operation is appropriate,

so the relative location of the operation must be a compromise

that is best for all inputs considered together”. In the industries

following the intermittent production system, some

components may be made for inventory but they are combined

differently for different customers. The finished product is

heterogeneous but within a range of standardized options

assembled by the producers. Since production is partly for

stock and partly for consumer demand, there are problems to

be met in scheduling, forecasting control and coordination.

CHARACTERISITICS OF INTERMITTENT

PRODUCTION SYSTEM :

The flow of production is intermittent, not

continuous.

The volume of production is generally small.

A wide variety of products are produced.

General purpose, machines and equipments are used

so as to be adaptable to a wide variety of operations.

No single sequence of operations is used and

periodical adjustments are made to suit different

jobs or batches.

Process layout is most suited.

Intermittent system is much more complex than

continuous production because every product has to be

treated differently under the constraint of limited resources.

Intermittent system can be effective in situation which

satisfy the following conditions:

The production centers should be located in such a

manner so that they can be handle a wide range of

inputs.

Transportation facilities between production centers

should be flexible enough to accommodate variety

of route different inputs.

It should be provided with necessary storage

facility.

TYPES OF INTERMITTENT PRODUCTION.

(A) JOB PRODUCTION : job production involves

the manufacturing of single complete unit with the use of a

group of operator and process as per the customer’s this is a

“ special order” type of production. Each job production or

product is different from the other and no repetition is

involved. The product is usually costly and non-

standardized. Customers do not make demand for exactly

the same product on a continuing basis and therefore

production become intermittent. Each product is a class by

itself and constitute a separate job for production process.

Shipbuilding, electric power plant dam construction etc. are

common examples of job production

CHARACTERISTICS :

The product manufacture is custom-made or non –

standardized.

Volume of output is generally small.

Variable path materials handling equipment are

used.

A wide range of general purpose machines like

grinders, drilling, press, shaper etc is used .

MERITS :

It is flexible and can be adopted easily to change in

product design. A fault in one operation does not

result into complete stoppages of the process.

it is cost effective and time- effective since the

nature of the operation in a group are similar there

is reduced materials handling since machines are

close in a cell.

The waiting period between operation is also

reduced. This also results in a work- in- progress

inventrory.

DEMERITS:

Job shop manufacturing is just most complex

system of production e. g. in building a ship

thousand of individual parts must be fabricated and

assemble.

A complex schedule of activity is required to ensure

smooth flow of work with out any bottleneck.

Raw materials and work-in-progress inventories are

high due to uneven and irregular flow of work.

Work loads are unbalanced, speed of work is slow

and unit costs are high

(B) BATCH PRODUCTION : it is defined as, “

The manufacture of a product in small or large bathes or

lots at intervals by a series of operations, each operation

being carried out on the whole batch before any subsequent

operation is performed’ the batch production is mixture of

mass production and job production and job production

under it machines turn out different product at intervals,

each product being produced for comparatively short tome

using mass production methods.

Both job production and batch production are similar in

nature, except that in batch production the quantity of

product manufacture is comparatively large.

DEMERITS :

work-in-progress inventory is high and large storage

space is required .

The main problem in batch production is ideal time

between one operation and other the work has to

wait to until a particular operation is carried out on

the whole batch.

COMPARISON OF DIFFERENT PRODUCTION

SYSTEM

As we have discussed various system and sub-system in

detail in the above lines, we can now make a comparative

study of them as follows

(1) MANUFACTURING COST : Cost of

production per unit is lowest in process production while it

is highest in job production because large scale continuous

production is carried out under process production. Unit

cost in mass production is higher while it is lower than the

batch production or job production.

(2) SIZE AND CAPITAL INVESTMENT : as stated

earlier , the scale of operation is small in job production,

medium in batch production, large in mass production

and very large in process production. Hence the size of

capital investment different from system. Process

production calls for the higher investment while mass

production requires lesser amount of capital investment .

it is lower in case of job production and comparatively

higher in batch production.

(3) FLEXIBILITY IN PRODUCTION : in case of in

demand of the product, the production facilities may be

adjust very shortly with out increasing much expenses

under the system of job or batch production .But both the

sub-system of continuous production system i.e, mass

production or process production employ single purpose

machine in their manufacturing process. They can not

adjust their production facilities so quickly and easily as

is possible in job or batch production where general

purpose machines are used

(4) REQUIRED TECHNICAL ABILITY : both job and

batch production require high skilled technical foreman and

other executives . but under mass production for process

production systems, managerial ability plays plays an

important role because it require higher ability for planning and

coordinating several functions in mass and process production

than in the case of job and batch production.

(5) ORGANISATIONAL STRUCTURE : mostly

functional organization is adopted in case of job and batch

production systems. On the other hand , divisional

organization is preferred in mass product process production

system due to the greater emphasis for centralization.

(6) JOB SECURITY : job and batch system of

production do not provide and type of job security to workers

due to their intermittent character during odd times, workers

particularly unskilled worker are thrown out of job. On the

contrary, mass and process production systems provide greater

job security to worker because production operation are carried

out continuously in anticipation of stable and continuous

demand of the product.

(7) INDUSTRIALS APPLICATION : the application

of different system is suitable in different industries depending

upon the nature of work. The mechanisum of job production

applies in products of construction and manufacturing

industries like building , bridges special purpose machines etc.

batch production is mostly used in mechanical engeering and

consumer-goods industries like cotton, jute , machine tools ,

shoe-making etc. mass production is found in automobiles,

sugar refining, refrigerators , electricals goods etc. process

production is most appropriate in chemical , petroleum , milk

processing industries etc.

Unit – II

Chapter – 1

Product Design

MAJOR FACTORS IN PRODUCT DESIGN

– Cost

– Quality

– Time-to-market

– Customer satisfaction

– Competitive advantage

PRODUCT DESIGN ACTIVITIES

• Translate customer wants and needs into

product and service requirements

• Refine existing products and services

• Develop new products and services

• Formulate quality goals

• Formulate cost targets

• Construct and test prototypes

• Document specifications

REASONS FOR PRODUCT DESIGN

• Economic

• Social and demographic

• Political, liability, or legal

• Competitive

• Technological

OBJECTIVES OF PRODUCT DESIGN

Main focus

– Customer satisfaction

Secondary focus

– Function of product/service

– Cost/profit

– Quality

– Appearance

– Ease of production/assembly

– Ease of maintenance/service

FORMS OF PRODUCT DESIGN

1. Priliminary Design – Pre design or proto type of the

product design

2. Final Design – Final decision making of the product design

after testing etc.,

3.Modular Design - is a form of standardization in which

component parts are subdivided into modules that are easily

replaced or interchanged. It allows:

– easier diagnosis and remedy of failures

– easier repair and replacement

– simplification of manufacturing and assembly

4. Reverse Engineering - Reverse engineering is the

dismantling and inspecting of a competitor’s product to

discover product improvements.

PHASES IN PRODUCT DEVELOPMENT PROCESS

1. Idea generation

2. Feasibility analysis

3. Product specifications

4. Process specifications

5. Prototype development

6. Design review

7. Market test

8. Product introduction

9. Follow-up evaluation

UNIT – II

Chapter – 2

Make-or-Buy Decisions

The make-or-buy decision is the act of making a

strategic choice between producing an item internally (in-

house) or buying it externally (from an outside supplier). The

buy side of the decision also is referred to as outsourcing.

Make-or-buy decisions usually arise when a firm that has

developed a product or part—or significantly modified a

product or part—is having trouble with current suppliers, or

has diminishing capacity or changing demand.

Make-or-buy analysis is conducted at the strategic and

operational level. Obviously, the strategic level is the more

long-range of the two. Variables considered at the strategic

level include analysis of the future, as well as the current

environment. Issues like government regulation, competing

firms, and market trends all have a strategic impact on the

make-or-buy decision.

FACTORS CONSIDERATIONS THAT FAVOR

MAKING A PART IN-HOUSE:

Cost considerations (less expensive to make the part)

Desire to integrate plant operations

Productive use of excess plant capacity to help absorb

fixed overhead (using existing idle capacity)

Need to exert direct control over production and/or

quality

Better quality control

Design secrecy is required to protect proprietary

technology

Unreliable suppliers

No competent suppliers

Desire to maintain a stable workforce (in periods of

declining sales)

Quantity too small to interest a supplier

Control of lead time, transportation, and warehousing

costs

Greater assurance of continual supply

Provision of a second source

Political, social or environmental reasons (union

pressure)

Emotion (e.g., pride)

FACTORS THAT MAY INFLUENCE FIRMS TO BUY A

PART EXTERNALLY INCLUDE:

Lack of expertise

Suppliers' research and specialized know-how exceeds

that of the buyer

cost considerations (less expensive to buy the item)

Small-volume requirements

Limited production facilities or insufficient capacity

Desire to maintain a multiple-source policy

Indirect managerial control considerations

Procurement and inventory considerations

Brand preference

Item not essential to the firm's strategy

Cost considerations for the "Make " analysis include:

Incremental inventory-carrying costs

Direct labor costs

Incremental factory overhead costs

Delivered purchased material costs

Incremental managerial costs

Any follow-on costs stemming from quality and related

problems

Incremental purchasing costs

Incremental capital costs

Cost considerations for the "buy" analysis include:

Purchase price of the part

Transportation costs

Receiving and inspection costs

Incremental purchasing costs

Any follow-on costs related to quality or service

Unit - II

Chapter – 3

Modern Production Management

( CIM, CAD, CAM, FMS)

Computer Integrated Manufacturing

Computer-Integrated Manufacturing (CIM) in

engineering is a method of manufacturing in which the entire

production process is controlled by computer. Typically, it

relies on closed-loop control processes, based on real-time

input from sensors. It is also known as flexible design and

manufacturing.

Overview

The term "Computer Integrated Manufacturing" is both

a method of manufacturing and the name of a computer-

automated system in which individual engineering, production,

marketing, and support functions of a manufacturing enterprise

are organized. In a CIM system functional areas such as design,

analysis, planning, purchasing, cost accounting, inventory

control, and distribution are linked through the computer with

factory floor functions such as materials handling and

management, providing direct control and monitoring of all

process operations.

As method of manufacturing, three components distinguish

CIM from other manufacturing methodologies:

Means for data storage, retrieval, manipulation and

presentation;

Mechanisms for sensing state and modifying processes;

Algorithms for uniting the data processing component

with the sensor/modification component.

CIM is basically use of Information and Communication

Technology (ICT)in manufacturing.

History of CIM

The idea of "Digital Manufacturing" is a vision for the

1980s. In the 1980s, Computer Integrated Manufacturing was

developed and promoted by machine tool manufacturers and

the CASA/SME (Computer and Automated Systems

Association /Society for Manufacturing Engineers).

"CIM is the integration of total manufacturing

enterprise by using integrated systems and data

communication coupled with new managerial

philosophies that improve organizational and personnel

efficiency."

Key Challenges to CIM

There are three major challenges to development of a smoothly

operating Computer Integrated Manufacturing system:

Integration of components from different suppliers:

When different machines, such as CNC, conveyors and

robots, are using different communications protocols. In

the case of AGVs, even differing lengths of time for

charging the batteries may cause problems.

Data integrity : The higher the degree of automation, the

more critical is the integrity of the data used to control

the machines. While the CIM system saves on labor of

operating the machines, it requires extra human labor in

ensuring that there are proper safeguards for the data

signals that are used to control the machines.

Process control : Computers may be used to assist the

human operators of the manufacturing facility, but there

must always be a competent engineer on hand to handle

circumstances which could not be foreseen by the

designers of the control software.

Subsystems in Computer Integrated Manufacturing

A Computer Integrated Manufacturing system is not the same

as a "lights out" factory, which would run completely

independent of human intervention, although it is a big step in

that direction. Part of the system involves flexible

manufacturing, where the factory can be quickly modified to

produce different products, or where the volume of products

can be changed quickly with the aid of computers. Some or all

of the following subsystems may be found in a CIM operation:

CAD/CAM (Computer-aided design/Computer-aided

manufacturing)

CAPP, (Computer-aided process planning)

ERP (Enterprise resource planning)

CNC (computer numerical control) machine tools

DNC, direct numerical control machine tools

FMS, flexible machining systems

ASRS, automated storage and retrieval systems

AGV, automated guided vehicles

Robotics

Automated conveyance systems

Computerized scheduling and production control

CAQ (Computer-aided quality assurance)

A business system integrated by a common database.

Lean Manufacturing

Computer-aided design

Computer-Aided Design (CAD) is the use of computer

technology to aid in the design and particularly the drafting

(technical drawing and engineering drawing) of a part or

product, including entire buildings. It is both a visual (or

drawing) and symbol-based method of communication whose

conventions are particular to a specific technical field.

Drafting can be done in two dimensions ("2D") and three

dimensions ("3D").

Drafting is the communication of technical or

engineering drawings and is the industrial arts sub-discipline

that underlies all involved technical endeavors. In representing

complex, three-dimensional objects in two-dimensional

drawings, these objects have traditionally been represented by

three projected views at right angles.

Overview

Current Computer-Aided Design software packages

range from 2D vector-based drafting systems to 3D solid and

surface modellers. Modern CAD packages can also frequently

allow rotations in three dimensions, allowing viewing of a

designed object from any desired angle, even from the inside

looking out. Some CAD software is capable of dynamic

mathematic modeling, in which case it may be marketed as

CADD — computer-aided design and drafting.

CAD is used in the design of tools and machinery and

in the drafting and design of all types of buildings, from small

residential types (houses) to the largest commercial and

industrial structures (hospitals and factories).

CAD is mainly used for detailed engineering of 3D

models and/or 2D drawings of physical components, but it is

also used throughout the engineering process from conceptual

design and layout of products, through strength and dynamic

analysis of assemblies to definition of manufacturing methods

of components.

CAD has become an especially important technology

within the scope of computer-aided technologies, with benefits

such as lower product development costs and a greatly

shortened design cycle. CAD enables designers to lay out and

develop work on screen, print it out and save it for future

editing, saving time on their drawings.

Uses

Computer-Aided Design is one of the many tools used

by engineers and designers and is used in many ways

depending on the profession of the user and the type of

software in question. There are several different types of CAD.

Each of these different types of CAD systems require the

operator to think differently about how he or she will use them

and he or she must design their virtual components in a

different manner for each.

There are many producers of the lower-end 2D systems,

including a number of free and open source programs. These

provide an approach to the drawing process without all the fuss

over scale and placement on the drawing sheet that

accompanied hand drafting, since these can be adjusted as

required during the creation of the final draft.

3D wireframe is basically an extension of 2D drafting. Each

line has to be manually inserted into the drawing. The final

product has no mass properties associated with it and cannot

have features directly added to it, such as holes. The operator

approaches these in a similar fashion to the 2D systems,

although many 3D systems allow using the wireframe model to

make the final engineering drawing views.

The Effects of CAD

Starting in the late 1980s, the development of readily

affordable Computer-Aided Design programs that could be run

on personal computers began a trend of massive downsizing in

drafting departments in many small to mid-size companies. As

a general rule, one CAD operator could readily replace at least

three to five drafters using traditional methods. Additionally,

many engineers began to do their own drafting work, further

eliminating the need for traditional drafting departments. This

trend mirrored that of the elimination of many office jobs

traditionally performed by a secretary as word processors,

spreadsheets, databases, etc. became standard software

packages that "everyone" was expected to learn.

Another consequence had been that since the latest

advances were often quite expensive, small and even mid-size

firms often could not compete against large firms who could

use their computational edge for competitive purposes. Today,

however, hardware and software costs have come down. Even

high-end packages work on less expensive platforms and some

even support multiple platforms. The costs associated with

CAD implementation now are more heavily weighted to the

costs of training in the use of these high level tools, the cost of

integrating a CAD/CAM/CAE PLM using enterprise across

multi-CAD and multi-platform environments and the costs of

modifying design work flows to exploit the full advantage of

CAD tools.

CAD vendors have effectively lowered these training costs.

These methods can be split into three categories:

1. Improved and simplified user interfaces. This includes

the availability of “role” specific tailor able user

interfaces through which commands are presented to

users in a form appropriate to their function and

expertise.

2. Enhancements to application software. One such

example is improved design-in-context, through the

ability to model/edit a design component from within

the context of a large, even multi-CAD, active digital

mockup.

3. User oriented modeling options. This includes the

ability to free the user from the need to understand the

design intent history of a complex intelligent model.

Computer - Aided Manufacturing

(CAM)

Definition:

Computer-Aided Manufacturing (CAM) is the use of computer

software and hardware in the translation of computer-aided

design models into manufacturing instructions for numerical

controlled machine tools.

Applications

The field of computer-aided design has steadily advanced

over the past four decades to the stage at which conceptual

designs for new products can be made entirely within the

framework of CAD software. From the development of the

basic design to the Bill of Materials necessary to manufacture

the product there is no requirement at any stage of the process

to build physical prototypes.

Computer-Aided Manufacturing takes this one step further by

bridging the gap between the conceptual design and the

manufacturing of the finished product. Whereas in the past it

would be necessary for a design developed using CAD

software to be manually converted into a drafted paper drawing

detailing instructions for its manufacture, Computer-Aided

Manufacturing software allows data from CAD software to be

converted directly into a set of manufacturing instructions.

CAM software converts 3D models generated in CAD into a

set of basic operating instructions written in G-Code. G-code is

a programming language that can be understood by numerical

controlled machine tools – essentially industrial robots – and

the G-code can instruct the machine tool to manufacture a large

number of items with perfect precision and faith to the CAD

design.

Modern numerical controlled machine tools can be linked into

a ‘cell’, a collection of tools that each performs a specified task

in the manufacture of a product. The product is passed along

the cell in the manner of a production line, with each machine

tool (i.e. welding and milling machines, drills, lathes etc.)

performing a single step of the process.

In addition to lower running costs there are several additional

benefits to using CAM software. By removing the need to

translate CAD models into manufacturing instructions through

paper drafts it enables manufactures to make quick alterations

to the product design, feeding updated instructions to the

machine tools and seeing instant results.

In addition, many CAM software packages have the ability to

manage simple tasks such as the re-ordering of parts, further

minimising human involvement. Though all numerical

controlled machine tools have the ability to sense errors and

automatically shut down, many can actually send a message to

their human operators via mobile phones or e-mail, informing

them of the problem and awaiting further instructions.

All in all, CAM software represents a continuation of the trend

to make manufacturing entirely automated. While CAD

removed the need to retain a team of drafters to design new

products, CAM removes the need for skilled and unskilled

factory workers. All of these developments result in lower

operational costs, lower end product prices and increased

profits for manufacturers.

Problems

Unfortunately, there are several limitations of computer-aided

manufacturing. Obviously, setting up the infrastructure to

begin with can be extremely expensive. Computer-aided

manufacturing requires not only the numerical controlled

machine tools themselves but also an extensive suite of

CAD/CAM software and hardware to develop the design

models and convert them into manufacturing instructions – as

well as trained operatives to run them.

Additionally, the field of computer-aided management is

fraught with inconsistency. While all numerical controlled

machine tools operate using G-code, there is no universally

used standard for the code itself. Since there is such a wide

variety of machine tools that use the code it tends to be the case

that manufacturers create their own bespoke codes to operate

their machinery.

While this lack of standardisation may not be a problem in

itself, it can become a problem when the time comes to convert

3D CAD designs into G-code. CAD systems tend to store data

in their own proprietary format (in the same way that word

processor applications do), so it can often be a challenge to

transfer data from CAD to CAM software and then into

whatever form of G-code the manufacturer employs.

FLEXIBLE MANUFACTURING SYSTEM

A flexible manufacturing system (FMS) is a

manufacturing system in which there is some amount of

flexibility that allows the system to react in the case of

changes, whether predicted or unpredicted. This flexibility is

generally considered to fall into two categories, which both

contain numerous subcategories.

1. The first category, machine flexibility, covers the system's

ability to be changed to produce new product types, and ability

to change the order of operations executed on a part.

2. The second category is called routing flexibility, which

consists of the ability to use multiple machines to perform the

same operation on a part, as well as the system's ability to

absorb large-scale changes, such as in volume, capacity, or

capability.

Most FMS systems comprise of three main systems. The work

machines which are often automated CNC machines are

connected by a material handling system to optimize parts flow

and the central control computer which controls material

movements and machine flow.

The main advantages of an FMS is its high flexibility in

managing manufacturing resources like time and effort in order

to manufacture a new product. The best application of an FMS

is found in the production of small sets of products like those

from a mass production.

Advantages

Productivity increment due to automation

Preparation time for new products is shorter due to

flexibility

Saved labor cost, due to automation

Improved production quality, due to automation

However, it is not always necessary that on increasing

flexibility productivity also increases.

Industrial FMS Communication

An Industrial Flexible Manufacturing System (FMS)

consists of robots, Computer-controlled Machines, Numerical

controlled machines (CNC), instrumentation devices,

computers, sensors, and other stand alone systems such as

inspection machines. The use of robots in the production

segment of manufacturing industries promises a variety of

benefits ranging from high utilization to high volume of

productivity. Each Robotic cell or node will be located along a

material handling system such as a conveyor or automatic

guided vehicle. The production of each part or work-piece will

require a different combination of manufacturing nodes. The

movement of parts from one node to another is done through

the material handling system. At the end of part processing, the

finished parts will be routed to an automatic inspection node,

and subsequently unloaded from the Flexible Manufacturing

System.

The FMS data traffic consists of large files and short

messages, and mostly come from nodes, devices and

instruments. The message size ranges between a few bytes to

several hundreds of bytes. Executive software and other data,

for example, are files with a large size, while messages for

machining data, instrument to instrument communications,

status monitoring, and data reporting are transmitted in small

size.

There is also some variation on response time. Large

program files from a main computer usually take about 60

seconds to be down loaded into each instrument or node at the

beginning of FMS operation. Messages for instrument data

need to be sent in a periodic time with deterministic time delay.

Other type of messages used for emergency reporting is quite

short in size and must be transmitted and received with almost

instantaneous response.

The demands for reliable FMS protocol that support all

the FMS data characteristics are now urgent. The existing IEEE

standard protocols do not fully satisfy the real time

communication requirements in this environment. The delay of

CSMA/CD is unbounded as the number of nodes increases due

to the message collisions. Token Bus has a deterministic

message delay, but it does not support prioritized access

scheme which is needed in FMS communications. Token Ring

provides prioritized access and has a low message delay,

however, its data transmission is unreliable. A single node

failure which may occur quite often in FMS causes

transmission errors of passing message in that node. In

addition, the topology of Token Ring results in high wiring

installation and cost.

A design of FMS communication protocol that supports a real

time communication with bounded message delay and reacts

promptly to any emergency signal is needed. Because of

machine failure and malfunction due to heat, dust, and

electromagnetic interference is common, a prioritized

mechanism and immediate transmission of emergency

messages are needed so that a suitable recovery procedure can

be applied. A modification of standard Token Bus to

implement a prioritized access scheme was proposed to allow

transmission of short and periodic messages with a low delay

compared to the one for long messages.

Unit – II

Chapter – 4

DEMAND FORECASTING

Forecasts are needed to aid in determining what

resources are needed, scheduling existing resources, and

acquiring additional resources. Accurate forecasts allow

scheduler to use machine capacity efficiently, reduce

production times, and cut inventories.

Forecasting methods may be based on mathematical models

using historical data available, qualitative methods drawing on

managerial experience, or a combination of both.

Forecasting demand in such situations require uncovering the

underlying patterns from available information.

PATTERNS OF DEMAND

The five basic patterns of the most demand time series are-:

1. Horizontal, or the fluctuation of data around a constant

mean;

2. Trend, or systematic increase or decrease in the mean of

the series overtime;

3. Seasonal, or a repeatable pattern of increase or decrease

in demand, depending on the time of day, week, month,

or season;

4. Cyclic, or less predictable gradual increases or

decreases in demand over longer periods of time (years

or decades); and

5. Random, or unforecastable, variation in demand

Four of the patterns of demands- Horizontal, Trend, Seasonal,

and Cyclic- combine in varying degrees to define the

underlying time pattern of demand for a product or service.

The fifth pattern, random variations, results from chance causes

and thus cannot be predicted.

FACTORS AFFECTING DEMAND

Generally such factors can be divided into main categories: -

Externals and Internals.

I. External Factors. External factors that affect demand for a

firm’s products or services are beyond management’s control.

Leading indicators. Such as the rate of business failures,

are external factors with turning points that typically precede

the peaks and troughs of general business cycle. Coincident

indicator, such as unemployment figures, are the time series

with turning points that generally match those of the general

business cycle.

Lagging indicators, such as retail sales, follow those turning

points, typically by several weeks or months.

II. Internal Factors: internal decision about product or service

design, price and advertising promotion, packaging design,

sales persons quotas or incentive and expansion and

contraction of geographic market, target areas all contribute to

changes in demand volume. The term demand management

describes the process of influencing the timing and volume of

demand or adapting to the undesirable effects of unchangeable

demand patterns.

Forecasting methods The two general types of forecasting

techniques used for demand forecasting are: Qualitative

methods and Quantitative methods

II.QUALITATIVE METHODS

a) Sales Force Estimate

Sales force estimates are forecasts compiled from estimates of

future demand made periodically by members of a company’s

sales force. This approach has several advantages.

The sales force is the group most likely to know which

products or services customers will be buying in the

near future, and in what quantities.

Sales territories often are divided by district or region.

Information broken down in this manner can be useful

for inventory management, distribution, and sales force

staffing purposes.

The forecasts of individual sales force members can be

combined easily to get regional or national sales.

But it also has several disadvantages.

Individual biases of the sales people may taint the

forecast; moreover, some people are naturally

optimistic, other more cautious.

Sales people may not always be able to detect the

difference between what a customers “wants” (a wish

list) and what a customer “needs” (a necessary

purchase).

If the firm uses individual sales as a performance

measure, salespeople may underestimate their forecasts

so that their performance will look good when they

exceed their projections or may work hard only until

they reach their required minimum sales.

b) Executive opinion

Executive opinion is a forecasting method in which the

opinions, and technical knowledge of one or more managers

are summarized to arrive at a single forecast. As we will

discuss later, executive opinion can be used to modify an

existing sales forecast to account for unusual circumstances,

such as a new sales promotion or unexpected international

events. Executive opinion can also be used for technical

forecasting. This method of forecasting has several

disadvantages. Executive opinion can be costly because it takes

valuable executive time. Although that may be warranted under

certain circumstances, it sometimes gets out of control. In

addition, if executives are allowed to modify a forecast without

collectively agreeing to the changes, the resulting forecast will

not be useful.

c) Market research

Market research is a systematic approach to

determine consumer interest in a product or services by

creating and testing hypotheses through data-gathering surveys.

Conducting a market research study includes

1. Designing a questionnaire that request economic and

demographics information from each person

interviewed and asks whether the interviewee would be

interested in the product or services;

2. Deciding how an administrative sample of household to

survey, whether by telephone polling, mailings, or

personal interviews;

3. Selecting a representative sample of households to

survey, which should include a random selection within

the market area of the proposed product or service; and

4. Analyzing the information using judgment and

statistical tools to interpret the responses, determine

their adequacy, make allowance for economic or

competitive factors not included in the questionnaire,

and analyze whether the survey represents a random

sample of the potential market.

Market research may be used to forecast demand for the short,

medium, and long term. Accuracy is excellent for the short

term, good for the medium term, and only fair for the long

term.

d) Delphi method

The Delphi method is process of gaining consensus

from a group of experts while maintaining their anonymity.

This form of forecasting is useful when there are no historical

data from which to develop statistical models and when

managers inside the firm have no experience on which to base

informed projections. A coordinator sends a question to each

member of the group of outside experts, who may not even

know who else, is participating. The Delphi method can be

used to develop long-range forecasts of product demand and

new product sales projections. It can also be used for

technological forecasting. The Delphi methods can be used to

obtain a consensus from a panel of experts who can devote

their attention to following scientific advances, changes in

society, government regulations, and the competitive

environment.

The Delphi method has some shortcomings, including the

following major ones.

The process can take a long time (sometime a year or

more). During that time the panel of people considered

to be experts may change, confounding the results or at

least further lengthening the process.

Responses may be less meaningful than if experts were

accountable for their responses.

There is little evidence that Delphi forecasts achieve

high degrees of accuracy. However, they are known to

be fair- to- good in identifying turning points in new

product demand.

Poorly designed questionnaires will result in ambiguous

or false conclusions.

II. QUANTITATIVE METHOD

a) Linear Regression

In linear regression, one variable, called a dependent variable,

is related to one or more independent variables by a linear

equation.

In the simple linear regression models, the dependent variable

is a function of only one independent variable, and therefore

the theoretical relationship is a straight line:

Y=a + bX

Where Y = dependent variable

X = independent variable

a = Y-intercept of the line

b = slope of the line.

The objectives of linear regression analysis is to find values of

a and b that minimize the sum of squared deviations of the

actual data points from the graphed line.

The sample correlation coefficient, r, measures the direction

and strength of the relationship between the independent

variable and the dependent variable. The value of r can range

from – 1.00 to + 1.00.

b) Time series methods

Simple Moving Averages. The simple moving

average method is used to estimate the average of demand time

series and thereby remove the effects of random fluctuation. It

is most useful when demand has no pronounced trend or

seasonal influences.

Weighted Moving Averages. In the simple moving

average method, each demand has the same weight in the

average --namely, 1/n. In the weighted moving average

method; each historical demand in the average can have its

own weight. The sum of the weight equal 1.0.

The advantage of a weighted moving average method is that it

allows you to emphasize recent demand over earlier demand.

The forecast will be more responsive than the simple moving

average forecast to changes in the underlying average of the

demand series. Nonetheless, the weighted moving average

forecast will still lag behind demand because it merely

averages past demands. This lag is specially noticeable with a

trend because the average of the time series is systematically

increasing or decreasing.

c) Exponential smoothing.

The exponential smoothing method is a sophisticated weighted

moving average method that calculates the average of a time

series by giving recent demands more weight than earlier

demands. It is the most frequently used formal forecasting

methods because of its simplicity and the small amount of data

needed to support it.

Ft+1 =a(Demand this period) + (1-a) (Forecast calculated last

period)= aDt+(1-a)Ft

Ft+1 =Ft + a(Dt-Ft)

Larger a values emphasize recent levels of demand and result

in forecasts more responsive to changes in the underlying

average. Smaller a values treat past demand more uniformly

and result in more stable forecasts.

Exponential smoothing requires an initial forecast to get

started. There are two ways to get this initial forecast: Either

use last period’s demand or, if some historical data are

available, calculate the average of several recent periods of

demand. The effect of the initial estimate of the average on

successive estimate of the average diminishes over time

because, with exponential smoothing, the weights given to

successive historical demands used to calculate the average

decay exponentially.

Exponential smoothing has the advantages of simplicity and

minimal data requirements. It is inexpensive to use and

therefore very attractive to firms that make thousands of

forecasts for each time period. However, its simplicity also is

disadvantage when the underlying average is changing, as in

the case of a demand series with a trend.

Unit – III

Chapter – 1

Production Planning & Control

Production Planning and control are basic managerial

functions which are essential to every organized activity. Proper

planning and control of manufacturing activities or the

production system is equally essential for efficient and

economical production. Economy and productivity are to a large

extent directly proportional to the thoroughness with which the

planning and control functions are performed. In a modern

enterprise, production is a complex system and steps must be

taken to ensure that goods are produced in the right quantity and

quality, at the right time and place and by the most efficient

methods possible. This is the task of production planning and

control.

PRODUCTION PLANNING

Production planning is concerned with deciding in

advance what is to be produced, when to be produced, where to

be produced and how to be produced. It involves foreseeing

every step in the process of production so as to avoid all

difficulties and inefficiency in the operation of the plant.

Production planning has been defined as the technique of

forecasting or picturing ahead every step in a long series of

separate operations, each step to be taken in the right place, of

the right degree, and at the right time, and each operation to be

done at maximum efficiency. In other words, production

planning involves looking ahead, anticipating bottlenecks and

identifying the steps necessary to ensure smooth and

uninterrupted flow of production. It determines the requirements

for materials, machinery and man-power; establishes the exact

sequence of operations for each individual item and lays down

the time schedule for its completion.

Objectives of Production Planning

The basic objectives of production planning are as under:-

(i) On the basis of the sales forecast and its engineering

analysis, to estimate the kind of the resources like

men, materials, machines, methods etc. in proper

quantities and qualities. It also estimates when and

where these resources will be required so that the

production of the desired goods is done most

economically.

(ii) It also aims to make all necessary arrangement so that

the production targets as set in the production budget

and master schedules are reached. While attaining

these targets, adjustments are made for the

fluctuations in the demand.

For an effective planning of production activities, the

executives concerned must have complete information

regarding the following:-

(i) Engineering data including complete analysis of

the product to be manufactured ,the operations,

processes and methods through which each

component or class of product must pass, the

nature of inspection required, and the method of

assembly.

(ii) Machine analysis giving full information

regarding speeds of all available machines and

their maximum capacity to perform certain

operations, and the rate of output per day, week

or month, and the maximum plant capacity per

day for each process or operation.

(iii) The various types and classes of tools and

equipment required of production.

(iv) Material analysis giving full information as to the

type, quality and quantity of the raw material to

be used in each process or operation. Also,

information as to raw materials in stores, how

much are on order, and how much are a located or

reserved for current orders.

(v) The characteristics of each job and the degree of

skill and personnel qualifications required for the

effective performance of each such job.

(vi) Information relating to power production and

consumption, internal transport and material

handling service.

(vii) Job analysis giving information as to what

methods of operation would yield uniformity of

output, ease in production and reduction in costs.

(viii) Information as to the customers orders on hand,

and the delivery for customers, and what for stock

purpose.

It is the job of the production department to arrange for the

order in which the work will be done the routing and

scheduling of work, and determine what machines tools,

workplaces materials and operatives should do the work.

A balanced production planning would tend to increase

operating efficiency by stabilizing productive activities,

facilitate selling and customer service, and help reduce

production cost by providing reliable basis for investment in

raw materials and tools. It would promote fuller utilization of

plant, equipment and labour by controlling all time and

efforts essential in manufacturing.

Levels of Production Planning

Production planning can be done at three levels namely

Factory Planning, Process Planning and Operation Planning

which are as follows:

(i) Factory Planning: At this level of planning the

sequence of work/ tasks is planned in terms of

building machines and equipment required for

manufacturing the desired goods and services. The

relationship of workplaces in terms of departments is

also planned at this stage taking into consideration the

space available for the purpose.

(ii) Process Planning: There are many operations

involved in factory planning for transforming the

inputs into some desired end product. In process

planning these operations are located and the

sequence of these operations in the production

process is determined. Plans are also made for the

layout of work centers in each process.

(iii) Operation Planning: It is concerned with planning

the details of the methods required to perform each

operation viz. selection of work centers, designing of

tools required for various operations. Then the

sequences of work elements involved in each

operation are planned. Specifications about each

transfer, work centers, nature of tools required and the

time necessary for the completion of each operation

are prescribed.

PRODUCTION CONTROL

All organizations irrespective of size, use production

control to some degree. In small organizations, the production

control may be performed by one person; but in large complex

industries the production control department is normally well-

organised and highly specialized. Production control

presupposes the existence of production plans, and it involves the

use of various control techniques to ensure production

performance as per plans. Co-ordinating men and materials and

machines is the task of production control.

Production control may be defined as “the process of planning

production in advance of operations; establishing the exact route

of each individual item, part of assembly; setting and finishing

dates for each important item, assembly and the finished

products, and releasing the necessary orders as well as initiating

the required follow-up to effectivate the smooth functioning of

the enterprises.” According to Henry Fayol, production control

is the art and science of ensuring that all which occurs is in

accordance with the rules established and the instructions

issued”. Thus, production control regulates the orderly flow of

materials in the manufacturing process from the raw material

stage to the finished product.

Production control aims at achieving production targets,

optimum use of available resources, increased profits through

productivity, better and more economic goods and services etc.

An effective production control system requires reliable

information, sound organization structure, a high degree of

standardization and trained personnel for its successful operation.

A sound production control system contributes to the efficient

operation of plant. In terms of manufacturing customer’s orders,

production control assures a more positive and accurate

completion and delivery date. Delivering an order on time is

obviously important to the customer and to the development of

customer goodwill. Production control also brings plan and

order to chaotic and haphazard manufacturing procedures. This

not only increases the plant efficiency but also makes it a more

pleasant place in which to work. Most people recognize that

employees prefer to work and do better work under conditions of

obvious control and plan. Morale may be considerably

improved.. Effective production control also maintains working

inventories at a minimum, making possible a real saving in both

labour and material investment. Thus, good production control

helps a company operate and produce more efficiently and

achieve lowest possible costs.

Objectives of Production Control

The success of an enterprise greatly depends on the performance

of its production control department. The production control

department generally has to perform the following functions:

(i) Provision of raw material, equipment, machines and

labour.

(ii) To organize production schedule in conformity with

the demand forecasts.

(iii) The resources are used in the best possible manner in

such a way that the cost of production is minimized

and delivery date is maintained.

(iv) Determination of economic production runs with a

view to reduce setup costs.

(v) Proper co-ordination of the operations of various

sections/departments responsible for production.

(vi) To ensure regular and timely supply of raw material

at the desired place and of prescribed quality and

quantity to avoid delays in production.

(vii) To perform inspection of semi-finished and finished

goods and use quality control techniques to ascertain

that the produced items are of required specifications.

(viii) It is also responsible for product design and

development.

Thus the fundamental objective of production control is to

regulate and control the various operations of production

process such a way that orderly flow of material is ensured at

different stages of the production and the items are produced

of right quality, in right quantity, at the right time with

minimum efforts and cost.

Levels of Production Control

Production control starts with some particular goal and

formulation of some general strategy for the accomplishment of

desired objectives. There are three levels of production control

namely programming, ordering and dispatching. Programming

plans the output of products for the factory as a whole. Ordering

plans the output of components from the suppliers and

processing departments. Dispatching considers each processing

department in turn and plans the output from the machine, tools

and other work centers so as to complete the orders by due date.

Factors Determining Production Control

The nature of production control operations varies from

organization to organization. The following factors affect the

nature and magnitude of production control methods in an

organization.

a) Nature of production: In job-oriented manufacturing,

products and operations are designed for some particular order

which may or may not be repeated in future. Hence

production usually requires more time, whereas in a continuous

manufacturing system inventory problems are more complex

but control operations are rather simple due to fixed process.

In mixed stock and custom manufacturing systems the problem

of control is further complicated due to simultaneous

scheduling of combined process.

b) Nature of operations/activities: In intermittent

manufacturing system the operations are markedly varied in

terms of their nature, sequence and duration. Due to this the

control procedure requires continuous modifications and

adjustments to suit the requirements of each order.

c) Magnitude of operations: Centralised control secures the

most effective co-ordination but as an organization grows in

size, decentralization of some production control functions

becomes necessary. The degree to which the performance of

an activity should be decentralized depends upon the scope of

operations and convenience of their locations.

PRODUCTION PLANNING AND CONTROL

Planning and control are interrelated and

interdependent. Planning is meaningless unless control action

is taken to ensure the success of the plan. Control also

provides information feedback which is helpful in modifying

the existing plans and in making new plans. Similarly, control

is dependent on planning as the standards of performance are

laid down under planning. Therefore, production and control

should be considered an integrated function of planning to

ensure the most efficient production and regulation of

operations to execute the plans successfully.

Production planning and control may be defined as the

direction and coordination of the firm’s material and physical

facilities towards the attainment of pre-specified production

goals in the most efficient available way .It is the process of

planning production in advance of operations, establishing the

exact route of each individual item, part or assembly, setting

starting and finishing dates for each important item or

assembly and finished products, and releasing the necessary

orders as well as initiating the required follow up to effectuate

the smooth functioning of the enterprise. Thus, production

planning and control involves planning, routing, scheduling,

dispatching and expediting to coordinate the movements of

materials, machines and manpower as to quantity, quality, time

and place. It is based upon the old adage of “first plan your

work and then work your plan”.

Objectives of Production Planning and Control

The main objective of production planning and control is to

ensure the coordinated flow of work so that the required

number of products are manufactured in the required quantity

and of required quality at the required time at optimum

efficiency. In other words, production planning and control

aims at the following purposes:

a) Continuous Flow of Production: It tries to achieve

as smooth and continuous production by eliminating

successfully all sorts of bottlenecks in the process of

production through well-planned routing and

scheduling requirements relating to production

work.

b) Planned Requirements of Resources: It seeks to

ensure the availability of all the inputs i.e. materials,

machines, tools, equipment and manpower in the

required quantity, of the required quality and at the

required time so that desired targets of production

may be achieved.

c) Co-ordinated work Schedules: The production

activities planned and carried out in a

manufacturing organization as per the master

schedule. The production planning and control tries

to ensure that the schedules to be issued to the

various departments/units/supervisors are in co-

ordination with the master schedule.

d) Optimum Inventory: It aims at minimum

investment in inventories consistent with

continuous flow of production.

e) Increased Productivity: It aims at increased

productivity by increasing efficiency and by being

economical. This is achieved by optimizing the use

of productive resources and eliminating wastage

and spoilage.

f) Customer Satisfaction : It also aims at satisfying

customers’ requirements by producing the items as

per the specifications or desires of the customers. It

seeks to ensure delivery of products on time by co-

ordinating the production operations with

customers’ orders.

g) Production and Employment Stabilisation:

Production planning and control aims at ensuring

production and employment levels that are

relatively stable and consistent with the quantity of

sales.

h) Evaluation of Performance: The process of

production planning and control is expected to keep

a constant check on operations by judging the

performance of various individuals and workshops

and taking suitable corrective measures if there is

any deviation between planned and actual

operations.

Importance of Production Planning and Control

The system of production planning and control serves

as the nervous system of a plant. It is a co- ordinating agency

which co-ordinate the activities of engineering, purchasing,

production, selling and stock control departments. An efficient

system of production planning and control helps in providing

better and more economic goods to customers at lower

investment. It is essential in all plants irrespective of their

nature and size. The principal advantages of production

planning and control are summarized below:

(i) Better Service to Customers: Production planning and

control, through proper scheduling and expediting of work,

helps in providing better services to customers is terms of

better quality of goods at reasonable prices as per promised

delivery dates. Delivery in time and proper quality, both help in

winning the confidence of customers, improving relations with

customers and promoting profitable repeat orders.

(ii) Fewer Rush Orders :In an organization, where there is

effective system of production planning and control,

production, operations move smoothly as per original planning

and matching with the promised delivery dates. Consequently,

there will be fewer rush orders in the plant and less overtime

than, in the same industry, without adequate production

planning and control.

(iii) Better Control of Inventory: A sound system of

production planning and control helps in maintaining inventory

at proper levels and, thereby, minimizing investment in

inventory. It requires lower inventory of work-in-progress and

less finished stock to give efficient service to customers. It

also helps in exercising better control over raw-material

inventory, which contributes to more effective purchasing.

(iv) More Effective Use of Equipment : An efficient

system of production planning and control makes for the most

effective use of equipment. It provides information to the

management on regular basis pertaining to the present position

of all orders in process, equipment and personnel requirements

for next few weeks. The workers can be communicated well in

advance if any retrenchment, lay-offs, transfer, etc. is likely to

come about. Also, unnecessary purchases of equipment and

materials can be avoided. Thus, it is possible to ensure proper

utilization of equipment and other resources.

(v) Reduced Idle Time: Production planning and control

helps in reducing idle time i.e. loss of time by workers waiting

for materials and other facilities; because ensures that material

and other facilities are available to the workers in time as per

the production schedule. Consequently, less man-hours are

lost, which has a positive impact on the cost of production.

(vi) Improved Plant Morale: An effective system of

production planning and control co-ordinates the activities of

all the departments involved in the production activity. It

ensures even flow of work and avoids rush orders. It maintains

healthy working conditions in the plant thus, there is improve

plant morale as a by-product.

(vii) Good public image: A proper system of production

planning and control is helpful in keeping systematized

operations in an organization .Such an organization is in a

position to meet its orders in time to the satisfaction of its

customers. Customers satisfaction leads to increased sales,

increased profits ,industrial harmony and, ultimately, good

public image of the enterprise .

(viii) Lower capital requirements: Under a sound system

of production planning and control , everything relating to

production is planned well in advance of operations.

Where, when and what is required in the form of input is known

before the actual production process starts .Inputs are made

available as per schedule which ensures even flow of production

without any bottlenecks .Facilities are used more effectively and

inventory levels are kept as per schedule neither more nor

less .Thus ,production planning and control helps, in minimizing

capital investment in equipment and inventories.

Basic Elements of PPC ( Refer Class notes also)

1. Routing

Routing may be defined as the selection of path, which each

part of the product will follow, which being transformed from

raw material to finished products. Routing determines the most

advantageous path to be followed for department to department

and machine to machine till raw material gets its final shape.

Factors Affecting Routing Procedure:

Manufacturing type

Availability of plant equipment and its component

parts.

Human factors.

2. Scheduling

Scheduling determines the programme for the operations.

Scheduling may be defined as 'the fixation of time and date for

each operation' as well as it determines the sequence of

operations to be followed.

3. Dispatcing

Dispatching is concerned with the starting the processes. It gives

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

been already been planned under ‘Routing’ and ‘Scheduling’.

Therefore, dispatching is ‘Release of orders and instruction for

the starting of production for any item in acceptance with the

Route sheet and Schedule Charts’

4. Follow – up

Follow up which regulates the progress of materials and parts through the Production process. This closely inter elated with activities of dispatcher to whom is delegated scheduling responsibility