Module 3

Production Planning and control

• Production process is properly decided in advance, and it is carried out as

per the plan.

• Production planning and control refers to the two separate pre-production

stages of manufacturing: production planning and production control.

• It’s the process of managing the resources, manpower, schedules, and

other aspects of producing goods and services.

Characteristics of production planning and control

• Planning and control of the manufacturing process in an enterprise.

• Materials, machines, men have been efficiently used for maintaining

manufacturing process efficiency

• Several aspects of production have been integrated to be used in an

economical and efficient manner.

• The properly organized manufacturing process is undertaken carefully to

utilize every available element.

• Work would be regulated/Controlled from the initial stage of procuring

raw materials to the finished goods.

Objectives of production planning and production control:

Production Planning:

• 1. To determine the requirements for men, materials and equipment.

• 2. To arrange the various inputs at a right time and in right quantity.

• 3. To Make most economical use of various inputs.

• 4. Arranging production schedules according to the needs of

marketing/sales department.
 • 5. To provide adequate stocks for meeting contingencies/emergency.

• 6. To ensure safe and economical production process.

Production Control:

• 1. To make efforts to adhere/Stick to the production schedules.

• 2. To give necessary instructions to the staff for making the plans realistic.

• 3. To ensure that goods produced according to the prescribed standards

and quality norms.

• 4. To ensure that various inputs are made available in right quantity and at
proper time while production.

• 5. To ensure that work progresses according to the pre decided plans.

The importance or functions of production planning and control:

• Utilizes resources effectively.

• Makes steady flow of production.

• Estimates production resources.

• Maintains necessary stock levels.

• Coordinates departmental activities.(inter department)

• Minimizes wastage of resources.

• Improves labor efficiency.

• Helps to face competition.

• Provides better work environment.

• Facilitates quality improvement.

• Customer satisfaction.
 • Reduces production costs.
1. Utilizes resources effectively

• Production planning and control result in effective utilization of plant capacity,

equipment and resources. It results in low-cost and high-returns for the organization.

2. Makes steady flow of production

• Production planning and control ensure a regular and steady flow of production.

• All machines are put to their optimum use.

• This helps in achieving a continuous production of goods.

• This also helps to provide a regular supply of goods to consumers.

3. Estimates production resources

• production planning and control help to estimate the resources like men, materials,
machines, etc.

• The estimate is made based on sales forecast.

• So, production is planned to meet sales requirements.

4. Maintains necessary stock levels

• Production planning and control prevent over-stocking and under-stocking of materials.

• Necessary stocks are maintained.

• Stock of raw-material is maintained at a proper level in order to meet production

demands.

• Stock of finished goods is also maintained to meet regular demands from customers.

5. Coordinates departmental activities

• Production planning and control helps to co-ordinate the activities of different

departments.

• Consider, for an example, the marketing department co-ordinates with production

department to sell the goods.

• This results in profit to the organization.

6. Minimizes wastage of resources

• Production planning and control ensure proper inventory of raw-materials and effective
handling of materials.

• This helps to minimize the wastage of raw materials.

• It also ensures production of quality goods. This results in minimal rejects.

• So, it results in minimum wastage.

7. Improves labor efficiency

• There is maximum utilization of manpower.

• Training is provided to the workers.

• The profits are shared with the workers in form of increased wages and other
incentives.

• Workers are motivated to perform their best. This results in improved labor efficiency.

8. Helps to face competition

• Production planning and control help to give delivery of goods to customers in time.

• This is because of regular flow of quality production.

• So, the company can face competition effectively, and it can capture the market.

9. Provides better work environment

• Production planning and control provide a better work environment to workers.

• They get better work facilities, proper working hours, leave and holidays, increased
wages and other incentives.

10. Facilitates quality improvement

• Production planning and control facilitate quality improvement because the production
is checked regularly.

• Quality consciousness is developed among the employees through training, suggestion

schemes, quality circles, etc.

11. Customer satisfaction

 • Production planning and control help to give a regular supply of goods and services to
consumers at competitive market price.

• This results in customer satisfaction.

12. Reduces production costs

• Production planning and control make optimum utilization of resources, and it

minimizes wastage.

• It also maintains an optimal level of inventories.

• Overall, this reduces the production costs.

MRP
• Material Requirements Planning is basically concerned with the inventory of raw
materials and components which are required to produce the products in a facility.

The demand for raw materials and components is termed as secondary demand which is
essentially depending upon the demand for the finished products

MATERIAL REQUIREMENT PLANNING (MRP)

• MRP refers to the basic calculations used to determine components required from end
item requirements.

• It also refers to a broader information system that uses the dependence relationship

• to plan and control manufacturing operations.

• “Materials Requirement Planning (MRP) is a technique for determining the quantity and
timing for the acquisition of dependent demand items needed to satisfy master
production schedule requirements.”
 Objectives of MRP
1. Inventory reduction:

MRP determines how many components are required when they are required in order to meet
the master schedule. It helps to procure the materials/ components as and when needed and
thus avoid excessive build up of inventory.

2. Reduction in the manufacturing and delivery lead times:

MRP identifies materials

and component quantities, timings when they are needed, availabilities and procurements and
actions required to meet delivery deadlines. MRP helps to avoid delays in production and
priorities

production activities by putting due dates on customer job order.

3. Realistic delivery commitments:

By using MRP, production can give marketing timely information about likely delivery times to
prospective customers.

4. Increased efficiency:

MRP provides a close coordination among various work centres and hence help to achieve
uninterrupted flow of materials through the production line. This increases the efficiency of
production system.

Steps/Stages in production planning and control

 Catering service in an event: 3 days later

• Menu: Sweets (2 types), Salad, Chapati/Puri, 2 Sabji, Masala Rice with Curry, Papad

• Planning: Men, Material, Money.

• Routing: Path raw materials flow in cooking area from store.

• Scheduling: When to start and When to Finish.

• Loading: Amount of work loaded Workers and utensils (Machines)

• Dispatching: release of Items and Ensure all items are correctly placed.

• Follow-up: (expediting): Main Cook measures the actual performance from start until
the end.

1. Planning

• Planning determines what will be produced, by whom, and how. It formulates the plan
for labor, equipment, work centers, and material requirements needed for production.

2. Routing

• Routing determines the path raw materials flow within the factory. Using the sequence,
raw materials are transformed into finished goods.

3. Scheduling
 • Scheduling emphasizes “when” the operation will be completed. It aims to make the
most of the time given for the completion of the operation.

4. Loading

• Loading looks into the amount of work loaded against machines or workers. The total
time to perform new work is added to the work already scheduled for the machine or
workstation.

5. Dispatching

• Dispatching is the release of orders and their instructions. It follows the routing and
scheduling directions. This step ensures all items are in place for the employees to do
their jobs.

6. Follow-up

• Also known as expediting, follow-up locates fault or defects, bottlenecks, and loopholes
in the production process. In this step, the team measures the actual performance from
start until the end and then compares it with the expected performance