Operations Planning and Control Short Notes
Operations Planning and Control Short Notes
Unit 1
Meaning and Objective of Production Planning & Control (PPC)
Production Planning and Control (PPC) refers to the process of planning, organizing, directing, and
controlling the production process in order to efficiently produce goods and services. It involves a
series of activities that aim to ensure that the right materials, labor, and equipment are available at
the right time and in the right quantity to meet production demands while minimizing costs and
maximizing efficiency.
Objectives of PPC:
1. Effective Utilization of Resources: Ensure that labor, machinery, and raw materials are
utilized efficiently and without wastage.
3. Cost Optimization: Minimize production costs by optimizing the use of materials, labor, and
overheads.
4. Quality Assurance: Maintain consistent product quality throughout the production process.
6. Maximizing Production Efficiency: Ensure that production processes are streamlined, and
there is minimal downtime and delays.
Functions of PPC
1. Routing: Determines the path or sequence of operations that materials follow through the
production process. This ensures that raw materials move through machines and
workstations in the most efficient manner.
2. Scheduling: Specifies when each operation will occur. It ensures that the production process
is time-efficient and helps in meeting delivery deadlines. It involves creating detailed
schedules for production stages.
3. Loading: Assigns specific tasks to machines or workers based on their capacity and
availability, ensuring optimal resource allocation.
4. Dispatching: Involves issuing orders and instructions to initiate the production process. This
function helps in maintaining the workflow.
5. Expediting: Ensures that production activities are running on schedule. It involves tracking
the progress of operations and resolving any issues that may cause delays.
6. Inventory Control: Manages the raw materials, work-in-progress (WIP), and finished goods
inventories to ensure that the right amount of material is available without excessive
stockpiling.
7. Quality Control: Ensures that the product meets the required standards at every stage of
production, minimizing defects and ensuring customer satisfaction.
8. Feedback and Evaluation: Constantly reviews the production process, identifying areas for
improvement and implementing corrective actions.
The PPC Manager oversees the entire production planning and control process. Their role involves
managing resources, ensuring production schedules are met, and optimizing processes for cost-
effectiveness and quality.
Key Responsibilities:
2. Resource Management: Ensuring that materials, machinery, and human resources are
available as required for production.
3. Scheduling: Coordinating production timelines, ensuring that deadlines are met and
resources are used efficiently.
4. Monitoring & Control: Monitoring ongoing production to identify issues or bottlenecks, and
taking corrective actions when necessary.
5. Inventory Management: Ensuring that the right amount of raw materials and finished goods
are available, and minimizing excess inventory.
6. Coordination: Liaising with other departments like procurement, sales, and logistics to
ensure smooth production operations.
7. Reporting: Providing regular reports on production progress, delays, and resource usage to
upper management.
8. Quality Assurance: Ensuring that production meets established quality standards and
addressing any quality issues that arise during production.
Forecasting refers to the process of predicting future demand for products or services based on
historical data and analysis. Accurate forecasting helps organizations plan production schedules,
manage inventory, and meet customer demand.
1. Expert Opinion: Gathering insights from individuals with experience or expertise in the
market to predict future trends.
2. Market Research: Conducting surveys or focus groups to gather customer opinions and
understand potential demand.
5. Executive Opinion: Senior management provides forecasts based on their strategic vision
and experience.
Quantitative forecasting relies on historical data and mathematical models to predict future demand.
These methods are more objective and can be used when sufficient historical data is available.
1. Time Series Analysis: Involves using historical data to identify trends, seasonal patterns, and
cycles to forecast future demand. Techniques include moving averages and exponential
smoothing.
2. Causal Models: These models identify relationships between demand and external factors
(e.g., advertising, economic conditions). The most common example is regression analysis,
which predicts future demand based on independent variables.
3. Trend Projection: Involves analyzing historical data to determine the general direction of
future demand (upward, downward, or stable) and projecting future values based on that
trend.
4. Regression Analysis: Used to model the relationship between variables, such as how sales
depend on factors like price, advertising expenditure, or economic indicators.
5. Simulation Models: Use computer simulations to model the impact of different variables and
scenarios on future demand, often used in complex or dynamic environments.
Unit 2
Process of Production Planning and Control (PPC)
Production Planning and Control (PPC) is the systematic process of planning, organizing, and
controlling the production process to ensure that production runs efficiently, at the required levels,
and within set timelines. The process involves several stages, which are:
1. Capacity Planning
2. Routing
3. Scheduling
4. Loading
5. Dispatching
6. Expediting
7. Inventory Control
8. Quality Control
These functions work together to optimize the production process, minimize costs, and ensure timely
delivery of products.
Capacity Planning
Capacity planning is the process of determining the production capacity needed to meet changing
demands for products. It ensures that a company has enough resources (labor, machines, materials)
to produce the required quantity of goods within a specific time frame.
Capacity planning focuses on the ability of the production system to meet the demand. It involves
forecasting demand, determining the necessary capacity, and comparing it with available capacity to
avoid overloading or underutilization of resources.
Types of Capacity:
1. Design Capacity: The maximum output that a system is designed to achieve under ideal
conditions, usually specified by the manufacturer.
2. Effective Capacity: The maximum output that a system can achieve under normal operating
conditions, taking into account inefficiencies such as downtime, maintenance, and human
error.
3. Actual Capacity: The real output produced, which may be less than effective capacity due to
breakdowns, absenteeism, or other disruptions.
4. Idle Capacity: The unused portion of the effective capacity. This may result from fluctuating
demand or inefficiencies in production.
Plant Capacity:
Plant capacity refers to the total production capability of a plant or factory, typically measured in
units produced per time period (e.g., units per day, per week). It is important to calculate the plant
capacity in order to plan production schedules effectively.
1. Lead Strategy: This strategy involves planning for future growth by increasing capacity in
advance of demand growth. It’s suitable when a company anticipates high future demand.
2. Lag Strategy: Capacity is added only after demand has increased, often resulting in short-
term shortages or longer lead times.
3. Match Strategy: Involves adjusting capacity incrementally to match changes in demand. It’s a
balanced approach, where capacity is aligned with demand growth through small
adjustments.
Routing in PPC
Routing is the process of determining the path and sequence of operations through which raw
materials, parts, or components must pass in the production process. It identifies the specific
workstations or machines to be used for each operation.
Procedure of Routing:
2. Select Operations: Determine the necessary operations (e.g., drilling, welding, assembly) for
each stage of production.
4. Determine Work Sequence: Specify the order in which operations should be performed.
Materials flow patterns refer to how materials move through the production system, based on
routing. The flow can be:
1. Straight-line Flow: Materials move directly from one workstation to another, typically used
in mass production.
2. U-shaped Flow: The production process is designed in a U-shape, which allows for easier
material handling and worker flexibility.
3. Loop Flow: Materials circulate in a loop, often used in batch production processes.
Scheduling in PPC
Scheduling is the process of allocating specific tasks or operations to be performed at specific times.
It ensures that production is completed on time and according to the plan.
Production Scheduling:
Production scheduling refers to creating a timeline for the production of a product. It involves:
Master Production Scheduling (MPS): A high-level plan that determines what products need
to be produced and when.
Detailed Scheduling: Breaks down the MPS into specific tasks for each machine or worker.
Machine Scheduling:
Machine scheduling involves assigning specific tasks or jobs to available machines, ensuring that
machines are used efficiently, avoiding delays or bottlenecks.
Line Balancing:
Line balancing is the process of distributing tasks among workstations in a production line to ensure
that each workstation has an equal amount of work. The goal is to minimize idle time and optimize
productivity.
Numerical Example of Line Balancing: Suppose there are 4 workstations in an assembly line,
and the total production time for a product is 100 minutes. If the available time per cycle is
25 minutes per workstation, line balancing aims to distribute the total production time
evenly across these workstations. If some tasks take longer, adjustments are made by
redistributing tasks to balance the load across workstations.
Loading in PPC
Loading is the process of assigning work or tasks to production resources such as machines or
workers, based on their capacity and availability. It ensures that each machine or worker is used to
their full capacity without being overburdened.
Process of Loading:
1. Determine Available Capacity: Understand the capacity of each resource (e.g., machine,
labor).
2. Assign Jobs to Resources: Allocate tasks to each resource based on their capability and the
time required.
3. Balance the Load: Ensure that resources are loaded in a balanced way, preventing
bottlenecks or idle time.
Strategies of Loading:
1. Finite Loading: Jobs are assigned based on available capacity, ensuring that resources are not
overburdened.
2. Infinite Loading: Jobs are assigned regardless of the available capacity, leading to potential
overloads.
Overloading: When the assigned load exceeds the available capacity, leading to delays,
inefficiencies, and the potential for machine breakdowns.
Underloading: When the assigned load is less than the available capacity, leading to
underutilization of resources and inefficiency.
1. Job Production:
o PPC Focus: Flexibility in planning and routing, customized schedules, and detailed
load management.
2. Batch Production:
4. Continuous Production:
o Characteristics: 24/7 production of bulk goods like chemicals, oil, or utilities. The
production process is continuous with minimal stoppage.
o PPC Focus: Maintaining steady production flow, capacity management, and system
integration to avoid breakdowns and interruptions.
Unit 3
Aggregate Planning: Meaning, Strategies, and Cost
Aggregate planning helps businesses match supply with demand by focusing on production levels,
inventory, labor, and other operational variables. It aims to:
Ensure efficient use of resources.
There are different strategies for aggregate planning, depending on the nature of demand,
production flexibility, and available resources. These strategies can be categorized into the following:
o The production and inventory levels are adjusted to directly match changes in
customer demand.
o Companies using this strategy hire or lay off workers, or adjust shifts, to match
production to actual demand.
o Example: A company that produces seasonal products like toys during Christmas.
o Example: A car manufacturer that produces cars at a constant rate but holds
inventory to cover seasonal spikes in demand.
3. Hybrid Strategy:
o A combination of the chase demand and level production strategies, where some
elements of the production process are adjusted to meet demand while others are
kept at a constant rate.
4. Subcontracting Strategy:
o In cases where the company has limited production capacity, subcontracting some
production to third-party suppliers or manufacturers can help meet demand.
Inventory Costs: Costs related to storing, handling, and managing excess inventory.
Labor Costs: Costs of hiring, training, and laying off workers, as well as overtime pay.
Backorder Costs: Costs incurred when customer demand exceeds production capacity,
requiring delays.
Setup and Changeover Costs: Costs associated with changing production lines or processes.
1. Capital-Intensive Industries:
2. Labor-Intensive Industries:
o These industries rely heavily on human labor rather than capital investment.
Examples include textile production, food processing, and construction.
o Aggregate Planning Focus: Labor availability, productivity, and training are key
factors. The strategies often focus on managing workforce shifts, minimizing layoffs,
and balancing labor costs with production demands.
3. Fashion Industries:
Materials Requirement Planning (MRP I) and Manufacturing Resource Planning (MRP II)
Materials Requirement Planning (MRP I) and Manufacturing Resource Planning (MRP II) are
computer-based systems used to manage manufacturing processes. Both systems focus on efficiently
managing materials, production schedules, and inventory levels.
MRP I is a system designed to manage materials in the production process. It focuses on the
following:
Inventory Management: Ensures that the right materials are available for production at the
right time.
Bill of Materials (BOM): Defines the parts and components needed for each product.
Production Scheduling: Ensures that production is scheduled based on material availability
and production lead times.
MRP I helps businesses avoid overstocking or understocking of materials, ensuring that production
processes can run smoothly.
MRP II extends the basic concepts of MRP I by integrating other business functions like finance,
human resources, and sales into the production planning process. It helps optimize not only material
requirements but also the capacity planning and scheduling aspects of production. MRP II focuses
on:
Capacity Planning: Ensures that enough resources (e.g., labor, machines) are available to
meet production needs.
Master Production Scheduling (MPS): Specifies what products to make, when, and in what
quantities.
Integration with Other Functions: Links production with other business areas like
procurement, finance, and sales for more cohesive planning and decision-making.
The Master Production Schedule (MPS) is a critical component of MRP II and is responsible for
determining the timing and quantity of finished products to be produced. It helps bridge the gap
between aggregate production planning and individual work orders. The MPS takes customer orders,
forecast data, and available resources into account to develop a detailed production schedule.
Demand Forecasting: Predicts the demand for finished products based on sales projections.
Order Scheduling: Specifies when each product will be produced and in what quantity.
Resource Allocation: Ensures that resources like labor and machines are available for the
planned production.
Enterprise Resource Planning (ERP) is a comprehensive system that integrates all business
processes, including manufacturing, sales, finance, human resources, and supply chain management,
into one unified system. ERP systems enable businesses to plan and manage resources efficiently by
providing real-time information across departments. It allows businesses to:
Some popular ERP systems include SAP, Oracle, and Microsoft Dynamics.
Global Practices in Aggregate Planning and Resource Management
In the global context, companies have increasingly adopted advanced technologies and best
practices for aggregate planning and resource management. Some of these practices include:
1. Demand Forecasting: Global companies use advanced forecasting models that incorporate
real-time data, market trends, and external factors (e.g., economic conditions, political
events) to make more accurate production plans.
2. Lean Manufacturing: Lean principles aim to minimize waste, optimize production processes,
and reduce costs. Companies implement just-in-time (JIT) production to synchronize
production with demand and reduce inventory.
3. Supply Chain Integration: Companies have integrated their aggregate planning processes
with their global supply chains to ensure smooth material flow, on-time deliveries, and cost
reduction.
4. Automation and AI: Modern tools like Artificial Intelligence (AI), machine learning, and
automation are used to optimize scheduling, resource allocation, and production control,
reducing human error and improving efficiency.
Unit 4
Waste Management: Value and Waste
Waste management is the process of handling, reducing, and disposing of waste materials efficiently,
with a focus on minimizing environmental impact and improving operational effectiveness. In the
context of production and operations management, waste refers to any activity, process, or material
that does not add value to the final product from the customer's perspective. The goal of waste
management is to eliminate or minimize waste to improve the value of the process or product.
Value: In Lean manufacturing, value refers to any activity that directly contributes to meeting
customer needs and is reflected in the product or service. These are activities that the
customer is willing to pay for, such as production, assembly, and delivery.
Waste: Waste refers to anything that does not add value to the customer and consumes
resources without contributing to the product. This includes inefficiencies in the production
process, excess inventory, unnecessary transportation, and idle time.
In Lean principles, "value" is defined as anything that meets the customer’s requirements and
"waste" is anything that does not. The goal is to identify waste and reduce it to improve productivity,
quality, and customer satisfaction.
1. Overproduction:
o Producing more than what is needed, at the wrong time, or too early, leading to
excessive inventory.
o Example: Manufacturing extra units that are not needed immediately or based on
inaccurate demand forecasting.
2. Waiting:
o Idle time where resources (employees, machines, materials) are waiting for the next
operation to occur.
3. Transport:
o Example: Moving products back and forth between workstations or facilities without
adding value to the product.
4. Extra Processing:
o Performing more work or using more resources than necessary to achieve the
desired result.
5. Inventory:
o Holding excess raw materials, work-in-progress (WIP), or finished goods that are not
needed in the short term.
o Example: Large stockpiles of materials or finished products that tie up resources and
take up space.
6. Motion:
o Unnecessary movement of people or equipment that does not add value to the
product.
7. Defects:
o Producing products that do not meet quality standards, leading to rework, scrap, or
returns.
5S is a methodology used to organize and maintain a clean, efficient, and effective workplace. It
stands for Sort, Set in Order, Shine, Standardize, and Sustain. 5S is a powerful tool for eliminating
waste and creating a safer, more productive environment.
1. Sort (Seiri):
o Only keep items that are needed for the current work process, and remove clutter
that distracts workers and wastes space.
o Waste elimination: Reduces time spent searching for tools and materials.
o Arrange necessary items so that they are easy to access and use.
o Establish designated places for tools, materials, and documents to reduce movement
and handling time.
o Waste elimination: Prevents unnecessary motion and time spent looking for tools or
materials.
3. Shine (Seiso):
o Keep the workplace clean and organized by regularly cleaning equipment, floors, and
workstations.
4. Standardize (Seiketsu):
o Create guidelines for maintaining the order and cleanliness created by the first three
steps.
o Waste elimination: Ensures that best practices are followed and prevents variation
in work processes.
5. Sustain (Shitsuke):
Lean manufacturing, based on the principles of Toyota Production System (TPS), focuses on
minimizing waste and maximizing value. It aims to optimize production processes by identifying and
eliminating non-value-added activities. The primary goal of Lean is to improve efficiency, reduce
costs, and increase customer satisfaction.
o A technique used to visualize and analyze the flow of materials and information
through the production process. It helps identify waste and areas for improvement.
o Example: By mapping the process from order receipt to product delivery, you can
identify bottlenecks, unnecessary steps, or delays.
2. Just-in-Time (JIT):
o A production strategy that aims to reduce inventory and produce items only when
needed, in the right quantity, and at the right time.
o Waste elimination: Reduces overproduction and inventory costs while ensuring that
products are delivered on time.
5. Cellular Manufacturing:
o Organizing production into cells, where all necessary equipment and workstations
are grouped together to work on a specific product or process.
o Waste elimination: Reduces transport and motion waste by optimizing the layout
and flow of materials.
o Waste elimination: Reduces defects and rework, improving quality and efficiency.
8. Standardized Work:
1. Value Stream Mapping: Helps to visualize the entire production process and identify non-
value-added activities.
2. Kanban System: Limits inventory by pulling parts through production based on actual
demand.
3. JIT (Just-In-Time): Helps reduce waste by ensuring that products are produced only when
needed, thus avoiding overproduction.
Unit 5
Control Systems in Production:
A control system in production refers to the mechanisms and processes used to monitor and manage
the production process to ensure that the output meets the desired goals, quality standards, and
timelines. Control systems provide feedback about the production process and help in detecting
deviations, ensuring that necessary corrective actions are taken. These systems are essential in
achieving consistency, efficiency, and flexibility in manufacturing operations.
Production control systems are frameworks that help in the planning, monitoring, and controlling of
the manufacturing process. Their primary objectives are to ensure the production process runs
smoothly, efficiently, and aligns with the set production schedule.
3. Inventory Control: Managing raw materials, work-in-progress (WIP), and finished goods to
avoid stockouts or overstocking.
4. Routing: Determining the most efficient path for the flow of materials and products through
the production process.
6. Monitoring and Feedback: Tracking the progress of production to detect any issues or
deviations from the plan.
7. Performance Analysis: Evaluating production data to assess how effectively resources are
being utilized.
8. Corrective Action: Taking measures to address any identified issues or inefficiencies in the
production process.
These systems utilize a range of tools and techniques to ensure the production process meets its
goals, including Gantt Charts, Bar Charts, production progress reporting, and performance analysis
systems.
Gantt Charts
A Gantt chart is a visual representation of a project schedule, often used in production control to
illustrate the timeline for production tasks and their dependencies.
Time-based scheduling: The chart plots tasks against a time axis, indicating when each task is
scheduled to start and finish.
Task dependencies: It shows the relationships between tasks, allowing managers to identify
which tasks must be completed before others can begin.
Task progress: The chart can also indicate the progress of each task, helping managers track
performance in real-time.
Clear timeline visualization: Helps managers visualize the entire production schedule at a
glance.
Easy progress tracking: The visual nature makes it easy to see if the production is on
schedule.
Resource allocation: Gantt charts help in allocating resources and assigning tasks to specific
time slots.
Example:
In a manufacturing plant, a Gantt chart may track the production of a batch of goods, showing which
stages (e.g., assembly, testing, packaging) are scheduled at what times.
Bar Charts
A Bar Chart is a simple graphical tool used to represent data, usually indicating quantities or
performance metrics over a period of time. It is particularly useful in production control systems for
tracking key performance indicators (KPIs).
Time-based or category-based: The x-axis could represent time intervals (e.g., days or shifts)
or different categories of tasks (e.g., workstations, products).
Bar lengths: The length of the bar corresponds to the value being measured (e.g., production
volume, downtime, or resource utilization).
Applications in Production:
Production performance: Bar charts are commonly used to show production volumes, cycle
times, or machine efficiency.
Resource utilization: They help visualize how effectively resources such as labor or
machinery are being used.
Simple and easy to understand: Quick visual reference for performance tracking.
Versatile: Can be used to track various metrics such as output, downtime, or machine
performance.
Production progress reporting and performance analysis are critical in monitoring how well the
production process is proceeding. These activities provide the data necessary to ensure that
production goals are met.
Involves regular updates on the status of production, typically against the established
production plan or schedule.
o Completion percentages: How much of the total production has been completed.
o Issues and delays: Any deviations from the plan that need to be addressed.
Performance Analysis:
Involves evaluating production data against key performance indicators (KPIs) such as:
Benefits:
Real-time monitoring: Managers can identify problems early and take corrective actions.
A feedback system in production control involves continuous monitoring of the production process to
detect deviations from the plan and taking appropriate actions.
Types of Feedback:
1. Positive Feedback: Signals that the system is performing as expected and encourages the
continuation of the current process.
Corrective Actions:
Corrective actions are the measures taken when there are deviations in production. These include:
Effective: Ensuring that the root cause of the problem is addressed, not just the symptoms.
In many manufacturing facilities, a control room plays a central role in monitoring and controlling
production operations. The control room serves as the nerve center where real-time data is
collected, analyzed, and used to make decisions on production processes.
Key Roles of Control Rooms:
1. Real-time Monitoring:
o Control rooms are equipped with various monitoring systems (SCADA, sensors, PLCs)
that provide data on machine status, production rates, quality, and more.
2. Performance Tracking:
o Operators in the control room track the performance of production lines, identifying
any deviations or issues that need attention.
3. Decision-Making:
o Control room operators are responsible for making decisions regarding production
adjustments, resource allocation, and handling emergencies.
4. Communication Hub:
5. Feedback Implementation:
o When issues are detected, the control room coordinates with other areas of the
plant to implement corrective actions, such as machine maintenance, changes in
production schedules, or workforce adjustments.
o Control rooms gather data from various parts of the plant and generate reports on
production performance. These reports are used for performance analysis,
identifying areas for improvement.