Module V - OPERATIONS MANAGEMENT

Production planning and control in different production systems; aggregate planning;

short-term scheduling; maintenance management. ERP solutions and its functionalities
in operations Management.
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Production planning and control in different production systems:
introduction:
For efficient, effective and economical operation in a manufacturing unit of an
organization, it is essential to integrate the production planning and control system.
 Production planning and control address a fundamental problem of low productivity,
inventory management and resource utilization.
 Production planning is required for scheduling, dispatch, inspection, quality
management, inventory management, supply management and equipment
management.
Production control ensures that production team can achieve required production
target, optimum utilization of resources, quality management and cost savings.
 “Production planning and control is the coordination of a series of functions
according to a plan which will economically utilize the plant facilities and regulate the
orderly movement of goods through the entire manufacturing cycle, from the
procurement of all materials to the shipping of finished goods at a predetermined
rate.”
Benefits Of Production Planning and Control
Planning and control are an essential ingredient for success of an operation unit. The
benefits are as follows:
 It ensures that optimum utilization of production capacity is achieved, by proper
scheduling of the machine items which reduces the idle time as well as over use.
 It ensures that inventory level are maintained at optimum levels at all time, i.e. there
is no over-stocking or under-stocking.

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

Characteristics of Production Planning and Control:

 1. It is the planning and control of manufacturing process in an enterprise. The
questions like—What is to be manufactured? When it is to be manufactured? How to
keep the schedule of production etc.? —are decided and acted upon for getting good
results.
 2. All types of inputs like materials, men, machines are efficiently used for
maintaining efficiency of the manufacturing process.
 3. Various factors of production are integrated to use them efficiently and
economically.
 4. The manufacturing process is organized in such a way that none of the work
centres is either overworked or under worked. The division of work is undertaken
very carefully so that every available element is properly utilized.
 5. The work is regulated from the first stage of procuring raw materials to the stage
of finished goods.

I) PRODUCTION PLANNING:
Production Planningis a technique of forecasting in the process of production, applied at
right time and in the right degree and trying to complete operations at the maximum
efficiency.
“The planning of industrial operations involvesfour considerations, namely,
 what work shall be done,
 how the work shall be done
 when the work shall be done.”

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

Objectives of production planning:

 To ensure right quantity and quality of raw material, equipment, etc. are available
during times of production.
 To ensure capacity utilization is in tune with forecast demand at all the time.
 To determine the requirements for men, materials and equipment.
 Production of various inputs at a right time and in right quantity.
 Making most economical use of various inputs.
 Arranging production schedules according to the needs of marketing department.
 Providing for adequate stocks for meeting contingencies.
 Keeping up-to-date information processes.

Benefits of production planning

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

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

II) PRODUCTION CONTROL

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  Production control is the process of systematic planning, coordinating, and
directing of all manufacturing activities and influences to ensure having goods made
on time, of adequate quality, and at reasonable cost
 (or) is the process that keeps a watchful eye on the production flow and size of
resources along with the location, so that any deviations from the present action are
to be adjusted accordingly.
 Production control looks to utilize different type of control techniques to achieve
optimum performance out of the production system as to achieve overall production
planning targets.
Objectives of production control are as follows:
 Regulate inventory management
 Organize the production schedules
 Optimum utilization of resources and production process
 Making efforts to adhere to the production schedules.
 Issuing necessary instructions to the staff for making the plans realistic.
 To ensure that goods produced according to the prescribed standards and quality
norms.
 To ensure that various inputs are made available in right quantity and at proper
time.
 To ensure that work progresses according to the predecided plans

Advantages of production control are as follows:

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

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

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  Nature of production( job oriented, service oriented, etc.)
 Nature of operation
 Size of operation
Production planning and control are essential for customer delight and overall success of an
organization
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AGGREGATE PLANNING&MAINTENANCE MANAGEMENT – Refer in Unit 3

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SHORT-TERM SCHEDULING:
Scheduling is the process of arranging, controlling and optimizing work and
workloads in a production process or manufacturing process. Scheduling is used to allocate
plant and machinery resources, plan human resources, plan production processes and
purchase materials.
Short term scheduling concerns with the allocation of CPU time to processes in
order to meet some pre-defined system performance objectives.

Short-Term Scheduling Goals

 Minimize completion time (average of production time)
 Maximize utilization (percentage of time the facility is used)
 Minimize Work-in-Process (WIP) to reduce inventories   (average number of jobs in
the system)
 Minimize customer waiting time (average of late days)

Importance of Short-Time Scheduling

a) ``Scheduling concerns the allocation of limited resources to tasks overtime.''
An illustrative example:
 Airlines (eg: Delta Airline) try to expect the unexpected Weather  Bad weather caused
10% of flights cancelations  Looses of 440 M$

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Solution: “Its function is to reallocate the passengers as soon as possible to maintain their
level of satisfaction”.
b)Effective scheduling means faster movement of goods and services through a facility. This
means greater use of assets and hence greater capacity per dollar invested, which in
turn, lower cost.
c)Added capacity, faster throughput, and the related flexibility mean better customer
service through faster delivery.
d)Good scheduling also contributes to realistic commitments and hence dependable
delivery.

Objective of short-term scheduling is

o To allocate and prioritize demand
o To match daily and hourly requirements to specific personnel and equipment.
o It should be simple, clear, easily understood, easy to carry out, flexible and
realistic. The competitive advantage of many firms may come from their
flexibility to make last minute adjustments.

New trends and challenges in Short term scheduling

Companies, especially airlines, should be able to recover from disruptions that arise
on the day of operations when there are limited opportunities in the operational time frame
to save costs, because most of the costs have been spent. There is nothing they can do to
save money, so they have to do the best out of the money they already have spent. What are
the key areas to look at when focusing on improving operational efficiency?
A schedule should be robust. Robustness means that if something happens on the day of
operations is it possible to recover from that disruption without throwing that schedule
away and thus spending more money trying to cover the flight, gap, etc. robust schedules
allow companies to recover easily from these disruption at the lower possible costs.

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TYPES- Short term scheduling:
a) Forward: Starts the schedule as soon as the job requirements are known. Jobs are
performed to customer order, and delivery is requested as soon as possible. (ex:
Hospital, Clinic, Restaurant…)
b) Backward: Begins with the due date, scheduling the final operation first. The
resources necessary to accomplish the schedule may not exist.
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 Waiting time:
Waiting time is the sum of the time periods spent in waiting in the ready queue.
 Response time:
Response time is the time it takes to start responding from submission time.It is
calculated as the amount of time it takes from when a request was submitted until
the first response is produced.**************************

ENTERPRISE RESOURCE PLANNING:

Enterprise resource planning (ERP) is a process by which a company manages and

integrates the important parts of its business. An ERP management information system
integrates areas such as planning, purchasing, inventory, sales, marketing, finance and
human resources. It is the most frequently used in the context of software.

Enterprise resource planning (ERP) is business process management software that allows
an organization to use a system of integrated applications to manage the business and
automate many back office functions related to technology, services and human resources.
These business activities can include:
 product planning, purchase
 production planning
 manufacturing or service delivery
 marketing and sales
 materials management

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  inventory management
 shipping and payment
 finance

Functional areas& Basic Features of ERP

 Financial accounting:General ledger, fixed asset, payables including vouchering,
matching and payment, receivables cash application and collections, cash
management, financial consolidation
 Management accounting:Budgeting, costing, cost management, activity based costing
 Human resources:Recruiting, training, rostering, payroll, benefits, retirement and
pension plans, diversity management, retirement, separation
 Manufacturing: Engineering, bill of materials, work orders, scheduling, capacity,
workflow management, quality control, manufacturing process, manufacturing
projects, product life cycle management
 Order Processing:Order to cash, order entry, credit checking, pricing, available to
promise, inventory, shipping, sales analysis and reporting, sales commissioning.
 Supply chain management: Supply chain planning, supplier scheduling, product
configurator, order to cash, purchasing, inventory, claim processing, warehousing.
 Project management: Project planning, resource planning, project costing, billing,
time and expense, performance units, activity management
 Customer relationship management: Sales and marketing, commissions, service,
customer contact, call center support 

Benefits of ERP
1. Increased Productivity
 Since all the data can be accessed from one location, it easier for the employees to manage
and perform day-to-day tasks.

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2. Managing day to day activity made easy
Reduces the cost of managing and maintaining servers. Reduces the overhead costs like IT
staff, power, data storage and bandwidth
3. Improved decision making
ERP in place will give easy access to the data, hence making it easier for the management to
take crucial decision with ease. This is easy for the management as all the data will be of
quality and updated.
4. Reduced Operation cost
With ERP, all the department’s system are connected to one integrated system. By
integrating, the organization can do away with the issue of duplicate data or information.
ERP also reduces the production cost and the inventory cost.

Advantages presented by the ERP are:

 Optimization of business processes.
 Accurate and timely access to reliable information.
 The ability to share information between all components of the organization.
 Elimination of unnecessary operations and data.
 Reduction of time and costs of litigation
 Redundancy (Idleness )is avoided.
 The performance of all work units that make up their business because better use
time is increased.
 To improve performance and save time,
 Optimize the control and analysis of management decisions there in the long term,
reduced costs for the company.
 Another obvious advantage is in terms of customer service, because the response
time is reduced attention to them.

Disadvantages of ERP are:

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  The installation of the ERP system is costly. ERP consultants are very expensive take
approximately 60% of the budget.
 The success depends on the skills and experience of the workforce, including
education and how to make the system work properly.
 Resistance in sharing internal information between departments can reduce the
efficiency of the software.
 The systems can be difficult to use.
 Change of staff, companies can employ administrators who are not trained to manage
the ERP system of the employing company, proposing changes in business practices
that are not synchronized with the system.
 ERP system does not guarantee the total success of the company. Organizational
culture, know how to involve staff and anticipate changes that will suffer the
organization using this system of administration, are important elements for the
completion of the implementation.
 The effectiveness of the ERP system may decrease if there is resistance to share
information between business units or departments. Due to strong changes that
implementation of the ERP system brings in the culture of work, there may be poorly
trained or disinterested in making use of the same staff…
 The benefits of having an ERP system are not presented immediately with the
implementation of the software, they will be evident long after the system is running.

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