2. Productionplanning& control [ ppc ]
(Meaning)
▪ Productionplanning is the function of looking ahead, forecast
difficulties to be faced and the likely remedial steps to remove them.It
is the techniqueof forecastingahead every step in the long process of
production, taking them at the right time and in the right degree and
trying to complete the operations at maximum efficiency.
▪ Productioncontrol, guides and directs flow of productionso that
products are manufacturedin a best way and confirm to a planned
scheduleand are of the right quality.
3. Definition
▪ “PPC is the process of planning or decidingon the resources the
firm will requirefor its futuremanufacturingoperations and of
allocating and time schedulingthese resources to producethe
desiredproducts on time at the least total cost”
4. Characteristics
▪ Various factors of productionare integrated to use them
efficiently and economically.
▪ The manufacturingprocess is organized in such a way that none
of the work centre is either overworked or under worked. The
divisionof work is undertaken very carefully so that every
available element is properly utilized.
▪ All types of inputs like materials, men, machines are efficiently
used for maintainingefficiency of the manufacturingprocess.
▪ The work is regulated from the firststage of procuringraw
materials to the stage of finishedgoods.
5. Objectives
The following points will bring out the objectives of production
planning and productioncontrol.
oProductionplanning
1. Making economical use of various input.
2. To determinethe requirements for men, materials and machines.
3. Productionof various inputs at a righttime and in right quantity
and of right quality.
4. Arrangingproductionschedules according to the needs of
marketing department.
5. Providingfor adequate stocks & Keeping up-to-dateinformation
processes.
6. oProductioncontrol
1. Making efforts to adhere to the productionschedules.
2. Issuingnecessary instructionsto the staff for making the plans
effective.
3. To ensurethat goods produced accordingto the prescribed
standardand quality.
4. To ensurethat work progresses accordingto the predefined
plans.
7. StagesOf PPC
Productionplanning and control has three phases namely as
follows:
1. Planning Phase
2. ActionPhase
3. ControlPhase
▪ PlanningPhase
▪ Planning is an exercise of intelligentforecastingin order to
establish how an objective can be achieved.
Prior planning
Planning phase
Active planning
8. o Priorplanning[ Pre-production planning ]
Modules of prior-planning:
1. Product development and design : process of developing a new
product with all the features, which are essentialfor effective
use in the field.
2. Forecasting : It is the demand which willhappen in the future.
It gives sales forecast, the factory capacity, the aggregate
inventory levels and sizeof the work force required.
3. Aggregate planning : To find product wiseplanning.
4. Material requirement planning : It is a techniquefor
determiningthe quantity and timing for the dependent items
needed to satisfy the master productionschedule.
9. oActiveplanning
Modules of Active planning :
1. Processplanning & routing : It is complete determination of
process steps and their sequenceto produce products at the
desiredquality, quantity and cost. Routingin particular
prescribes the flow of work in the plant & temporary location
of raw material and component and material handling system.
2. Material planning : Determines the requirements of various
raw materials/subassembliesby consideringcost component.
3. Tool’s planning : Determines the requirements of various tools
by taking process specification, Materialspecification&
Equipmentspecification.
4. Loading : It is the process of assigning jobs to several
machines such that there is a load balance among the
machines.
5. Scheduling : It is the time phase of loading and determines
when and in what sequencethe work will be carried out. This
fixes the starting as well as the finishingtimefor each job.
10. •Scheduling
Types of schedule’s :
1. Master Scheduling – It is the breakupof production
requirements. Itis the start of scheduling. It is prepared by
keeping in view the order or likely sales order in near future.
2. Manufacturing Scheduling – It is used whereproduction
process is continuous. The order of preferencefor manufacture
is also mentioned in the schedulefor a systematic production
planning.
3. Detail Operation Scheduling – It indicates the time required
to perform each and every detailed operations of a given
process.
11. ▪ Actionphase
▪ Dispatching :
• It is the transitionfrom planningphase to active phase. In this
phase, the worker is ordered to start manufacturingthe product.
• The tasks which are includedin dispatchingare job order, store
issueorder, tool order, time ticket, inspectionorder, move order
etc.
Ex, Job order is the key item which is to be mentioned in all other
reports/orders.
Stores issue order gives instructionto stores to issue material for
manufacturingof product.
Tool Order instructthe tool room to issuenecessary tools.
Time ticket is nothing but a card which is designed to note down
the actual time taken at various processes.
12. ▪ Controlphase
Modules for control phase :
1. Progress reporting : It collects data regardingwhat is
happeningwith the job. Also, it helps to compare with the
present level of performance.
2. Correctiveaction : Due to unforeseenreasons such as, machine
breakdown, rejectiondue to poor material quality, itmay not
possibleto scheduleas per plan. Under such condition, it is
better to reschedulethe whole product mix so that we get a
clear picture
13. Functions/ScopeOf PPC
▪ Material : Material must be available with ( Right
quntity,quality,price )
▪ Manpower : Important to maintaineoperational & managerial
staff having requisiteskills.
▪ Method : Mustposses alternative to choose best.
▪ Machines & equipment : Imp for manufacturingprocess.
▪ Routing : Specifies what work is to be done where& whenit is to
be performed.
14. Cont,..
▪ Estimating: Establishingperformancestandardof each work.
▪ Loading & scheduling: It is made as per productionrequirement.
▪ Dispatching: It is the release of orders & instructions to start
productionas per route sheet & schedule charts.
▪ Expediting: Follow-up after dispatching.
▪ Inspection: For maintainingquality in productionand process.
▪ Evaluating : It provides feedbackon process.
▪ Cost control : Costs can be kept withincontrol through wastage
reduction, value analysis, inventory control & efficientuse of
resources.
15. FACTORSAFFECTINGPPC
1. Market forecast: Future trends and demands for manufactured
product.
2. Sales order : Variation or changes in sales order will drastically
affect productionplanning and control.
3. Standard process sheets : It includes all process regardingdata
like machines used, time requiredfor that process. If machine
get’s damaged so for that this standard process sheet gets
disturb.
4. Load charts : Prepared for each workstationor machine in the
plant.
5. Project planning method : In manufacturingproductquantity
and there total processingtimecan be measured. Bestknown
methods for this are CriticalPath Method (CPM) and Program
Evaluation and Review Technique(PERT).
16. Productionplanningsystem
A good planningsystemmust answer four questions of priority
and capacity: What are we going to make? What does it take to
make it? What do we have? What do we need?
1. Priority : It is establishedby marketplace, relates to what
products are needed, how many are needed, and when they are
needed.
2. Capacity : It is the capability of manufacturingto produce
goods and services.
17. MakingThe ProductionPlan
• Based on market plan, the production plan sets the limits or levels of
manufacturing activity for some time in the future.
• For planning purposes, a small number of product groups based on
similarity of manufacturing processes is what is needed. Here
manufacturing is more concerned with demand of specific kinds of
capacity.
• Capacity is the ability to produce goods and services, i.e having the
resources available to satisfy the demands.
• Three to four basic strategies in developing production plan :
Demand matching
Production levelling
Subcontracting
Hybrid strategy
• The objective in developing a production plan is to minimize the costs of
carrying inventory,changing production levels, and stocking out( Not
supplying what needed, when it is needed).
18. • Make-to-stock production plan : When demand is constant & predictable
with few product option, Delivery times shorter and product having long
shelf life.
• Level production plan : It is the forecast to calculate total production
required (Total Production = totalforecast + back orders + ending
inventory – opening inventory).
• Make-to-order production plan : Wait until an order is received from a
customer before starting to make the goods.
• Assemble to order : Where several product options exist and where the
customer is not willing to wait until the product is made, so components
are stocked and by the time of delivering it is assembled.
• Resource planning : Preliminary production plan is compaired with
resources available in the company, if the capacity not meets the plan
then that plan must be changed.
• Resource bill shows quantity of critical resources( Material, labour &
operation )
19. Processplanning
▪ The process plan is basically a plan of how your parts will be
produced, what machines to use and in what order, to achieve the
correct tolerances etc. It involves strategic decisions and careful
analysis with productionengineers and expertisein order to plan
and adapt the production of every singlecomponent that you
wish to buildyourself. Process planning is often seen as the
interfacebetween designand manufacturingstages.
20. ManufacturingOf PPC System
The five major level in manufacturing planning & control system are :
▪ Strategic business plan : It is based on long-range forecasts and provides a
frameworkthat sets the goals and objectives for further planning by marketing,
finance, engineering and production/operations.
▪ Production plan : Concerned with quantities of each product group produced in
each period, inventary level,theresources of equipments, labour & materialneeded
in each period and available resources.The planning horizonis usually 6 to 18
months, but reviewedeach month.
▪ Master production schedule ( MPS ): is a plan for the production of individual
end items.
▪ Material requirement plan (MRP) : is a plan for the production and purchase of
the components and/or services used in making the items in the MPS.
▪ Purchasing & production activity control(PAC) : Purchasing is responsible for
establishing and controlling the flow of raw materialsinto the factory. PAC is
responsible for planning and controllingthe flow of work through the factory.
21. Role of ppc in manufacturingindustry
Basic roles of PPC is as follows :
1. Taking orders from marketing division.
2. Analyzing the orders & feeling the requirements of customer.
3. Planning for production.
4. Cost analysis & lead time.
22. Sales Forecasting
What is sales forecasting ?
• A sales forecast is a projectionof the expected customer demand for
products or services at a specific company, for a specific time horizon,
and with certainunderlying assumptions.
• Essential tool used for business planning, marketing, and general
management decisionmaking.
• It helps to achievebusiness goals, improve efficiancy, increase customer
retention& reduce’s cost.
Definition :
• “An estimate of sales in physical units (or monetary value) for a
specified future period under proposed marketing plan or program and
under the assumed set of economicand other forces outside the
organizationfor which the forecast is made” by American marketting
association.
23. Factor’saffectingsalesforecasting
External Factor’s Internal Factor’s
Relativestate of economy Labour problem
Direct & indirect competition Inventory shortage
Styles of fashion Working capital shortage
Consumer earnings Price change
Population changes Change in distribution method
Weather Productioncapability shortage
New product lines
24. Salesforecastingmethods
• Executive opinion method: Most widely used.Method of combining and
averagingviews of severalexecutivesregarding a specific decisionor forecast. Leads
to a quicker (and often more reliable)result without use of elaboratedata
manipulation and statistical techniques
• Delphi method : It includes a coordinator getting forecasts separatelyfrom experts,
summarizing the forecasts giving the summary report to experts who are asked to
make another prediction( Estimation future event through subjective consideration) ;
the process is repeated till some consensus is. Reached.
• Time series analysis : Make forecasts based purely on historical patterns in the
data. It has four components,…
1. Trend(T)
2.Cyclicalfluctuation( C) : Affected by swings in general economicactivity.
3.Seasonalvariation(S) : Distinguished pattern of sales caused by
weather,holidays, local cutoms & generalconsumer behaviour.
4.Irregular variation(R)
Most commonly used expressionfor a time series forecast is:
Y=TCSR
Where, Y= Forecasted value ,T= Secular trend ,C= Cyclicvariations
,S= Seasonal variations ,R= Irregular fluctuations.
25. • Market test method : One time forecast particularlyfor new products. A market
test provides data about consumers actual purchases and responsiveness to the
various elements of the marketing mix. On the basis of the response receivedto a
sample market test, product sales forecast is prepared.
• Sales force composite method(Grassrootapproach): Individual salespersons
forecast sales for their territories. Individual forecasts are combined & modified by
the sales manager to form the company sales forecast.
• Regressionanalysis : Identifies a statistical relationship betweensales(dependent
variable) and one or more influencing factors, which are termed the independent
variables. When just one independent variable is considered (eg. population
growth), it is called a linear regression, and the results can be shown as a line graph
predicting future values of sales based on changes in the independent variable.
When more than one independent variable is considered, it is called a multiple
regression.
• Survey of Buyer’s intention: Process includes asking customers about their
intentions to buy the company’s product and services.
26. Benefitsof salesforecasting
• Better control of Inventory
• Staffing
• Customer Information
• Use for Sales People
• Obtaining Financing
LIMITATION’S OF SALES FORECASTING
• Part hard fact, part guesswork
• Forecast may be wrong
• Times may change