OPERATION MANAGEMENT

Course Leader: Dr. B Dayal

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Lecture 4

OPERATIONS PLANNING & CONTROL

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Lecture 4: Operations Planning and Control
● Introduction
● Reason for location changes
● General factors influencing location
● Specific factors for manufacturing and service organisations
● Comparison of rural and urban sites
● General procedure for facility location
● Facility location models

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Operations Planning and Control
Introduction
● Operations Planning and Control (OPC) is concerned with implementing the
plans, i.e., the detailed scheduling of jobs, assigning of workloads to machines
(and people), and the actual flow of work through the system.
● Operations Planning and Control (OPC) philosophy:
● “First plan your work, then work your plan”.
● Operations planning is concerned with the determination, acquisition and
arrangement of all facilities necessary for the future operations,
whereas Operations control is concerned with the implementation
of a predetermined operations plan or policy and the control of all
aspects of operations according to such a plan or policy. It
is also called ‘Production Planning and Control (PPC)’ in
manufacturing sector.

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Operations Planning and Control
Introduction (Cont.…)
● Formally OPC or PPC can be defined as the process of planning the
production in advance, setting the exact route of each item, fixing the
starting and finishing date for each item, giving production orders to shop
and lastly following up the progress of products according to orders. It is
also called the ‘nerve center’ of the factory.

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 BENEFITS OF BETTER OPERATIONS
PLANNING AND CONTROL
The benefits of a better OPC are summarized in three groups as follows:
i. Benefits to Consumers/Investors. Better planning leads to increased
productivity in the firm, efficient deliveries of the products at proper time, more
products available to the consumers at cheaper price, and better quality. This
means more values for the consumers’ money and more satisfaction from the
products. This also means lots of profit margin to the investors who in turn can
recycle more money back to the production system, which will improve the
efficiency and productivity of the plant, and thus the cycle
may go on.

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 BENEFITS OF BETTER OPERATIONS
PLANNING AND CONTROL
ii. Benefits to Producers, Employees, Community and Share-holders. Better
planning means that the firm can earn more money and in turn can pay better
wages to its employees. There will not be any interrupted employment as it
was in older days, when there used to be none or very little scientific planning.
This will lead to job security, improved working conditions and thus increased
satisfaction among the employees. This will also keep the employees highly
motivated for more productive work. To the investors or the share-holders
there is a security of money and an adequate return in the form
of dividends. The Government may get lots of revenue by way
of taxes and the community may get more economic and
social stability, better infrastructure.

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 BENEFITS OF BETTER OPERATIONS
PLANNING AND CONTROL
iii. Benefits to The Nation. The Nation gains economic, political
and social stability, a better image on the global front, and
increased say in the global policy. It also brings security and
prosperity to the nation.

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MAIN FUNCTIONS OF OPC
● The following are the key functions of Operations Planning and Control:
a) Release orders to the system in accordance with the priority plan. Priority
means control over the status of jobs and work activities by specifying the
order in which materials or jobs are assigned to work centers.
b) Assign jobs to specific work centers (including machine loading, or shop
loading). These activities are also called ‘short-run capacity planning’.
c) Provide sequencing priorities to specify the order in which jobs are to be
processed. This function may also include the dispatching function, which is
the actual authorization for the work to begin.
d) Control the manufacturing lead time by tracking and
expediting jobs if required.
e) Monitor the priority status of jobs via summary, scrap,
rework, and other reports.

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MAIN FUNCTIONS OF OPC
f) Monitor the capacity status of facilities via input/output reports of workload
versus capacity. The input/output controls are also referred to as ‘short-run
capacity control’.
● The sequencing, tracking, expediting, and status control activities mentioned in
(c, d, e, and f) are popularly associated with the term shop floor controls
[Joseph G. Monks].

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SOME SPECIFIC ACTIVITIES OF OPC
Typical activities in OPC are to:
● Forecast the demand for an existing product and find out the demand of a
new product. Also estimate in advance the cost of a new product.
● Plan for capacity required to meet production needs. Ensure utilization of
capacity, equipment and other facilities.
● Schedule production activities with respect to the resources like labor,
machines, working hours, etc. Fix the starting and finishing dates for each
item.
● Plan for materials (to be available in right time and in right quantity).
Maintain appropriate inventories in the correct location.
● Prepare route sheet, and schedules for production and machine
loading.

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SOME SPECIFIC ACTIVITIES OF OPC
Typical activities in OPC are to: ( Cont.…)
● Issue orders for various activities to be performed.
● Simplify the activities and standardize the methods.
● Track materials, labor, machines, customer orders and other resources.
Direct and coordinate the company’s resources towards the achievement
of desired goals in the most efficient manner.
● Communicate with customers and suppliers on specific issues. Respond
when things go wrong and unexpected problems arrive.
● Meet customers’ requirements in a dynamic environment.
● Give production orders to shops, and
● Follow up the progress of products according to orders.

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Practice Question
● Out of these, which is not the key functions of Operations Planning and
Control?
o Control the manufacturing lead time
o Monitor the capacity status of facilities
o Monitor the efficiency of the workers.
o Monitor the priority status of jobs

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DETAILED FUNCTIONS OF OPC
● Planning,
● Routing,
● Scheduling,
● Dispatching,
● Follow up, and
● Inspection.

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DETAILED FUNCTIONS OF OPC
Planning Phase.
● Planning phase consists of the following:
o Investigation about the complete details and requirements of the
product to be manufactured.
o Estimation of future demand (forecasting)
o Planning the design, quality and quantity of the product to be
manufactured, and the sequence of operations
o Determination of material requirement, its quantity and
quality, equipment and its capacity, manpower need,
and transportation needs

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DETAILED FUNCTIONS OF OPC
Planning Phase. (Cont.…)
o Detailed drawing of components and their assemblies
o Information about the stores and delivery times
o Information about the equipment, their capacity and specifications
o Information regarding standard times for the product
o Information about the market conditions
o Type of workers employed and their salaries

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DETAILED FUNCTIONS OF OPC
ROUTING OR SEQUENCING
● Sequencing procedures seek to determine the best order for processing a
set of jobs through a set of facilities. Two types of problems can be
identified.
● First, the static case, in which all jobs to be processed are known and are
available, and in which no additional jobs arrive in the queue during the
exercise.
● Second, the dynamic case, which allows for the continuous
arrival of jobs in the queue.

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DETAILED FUNCTIONS OF OPC
ROUTING OR SEQUENCING (Cont...)
● Associated with these two cases are certain objectives. In the static case
the problem is merely to order a given queue of jobs through a given
numbers of facilities, each job passing through the facilities in the required
order and spending the necessary amount of time at each.
● The objective in such a case is usually to minimize the total time required
to process all jobs: the throughput time. In the dynamic case the objective
might be to minimize facility idle time, to minimize work in
progress or to achieve the required completion or delivery
dates for each job. Sequencing procedures are relevant
primarily for static cases.

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DETAILED FUNCTIONS OF OPC
ROUTING OR SEQUENCING (Cont...)
● Route or sequencing depends on the nature and type of industries as
discussed below:
o Continuous Industry. In this type of industry, once the route is
decided in the beginning, generally no further control over the route
is needed. The raw material enters the plant, moves through different
processes automatically till it gets final shape, e.g. soft drink bottling
plant, brewery, food processing unit, etc..

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DETAILED FUNCTIONS OF OPC
ROUTING OR SEQUENCING (Cont...)
o Assembly Industry. Such industries need various components to be
assembled at a particular time. So, it is necessary that no component
should fail to reach at the proper time and proper place in required
quantity, otherwise the production line will be held up, resulting in
wastage of time and production delay (e.g. assembly of bike, scooter,
car, radio, type writer, watch, etc). If all batches visit the same
sequence of workstations, the system is called a flow shop.

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DETAILED FUNCTIONS OF OPC
ROUTING OR SEQUENCING (Cont...)
o Job-shop Industry. This is also called sequencing and scheduling
situation with many products. The general job shop problem is to
schedule production times for N jobs on M machines. At time 0, we
have a set of N jobs. For each job we have knowledge of the
sequence of machines required by the job and the processing time
on each of those machines. Due dates may also be known. The
objective may be to minimize the makespan for
completion of all jobs, minimizing the number of
tardy jobs or average tardiness, minimizing the
average flow time, or achieving some weighted
combination of these criteria.

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DETAILED FUNCTIONS OF OPC
SCHEDULING
● It is the time phase of loading. It is assignment of job to a facility specifying
the particular sequence of the work and the time of actual performance.
Examples of scheduling include: railway time-table, examination schedule,
the time table for teaching various subjects. Scheduling should be done at
relatively lower level of the organization.
● Scheduling activities are highly dependent on the type of the production
system and the output volume delivered by the system. Scheduling
activities differ in:
a) High-volume system
b) Intermediate-volume system, and
c) Low-volume Systems

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DETAILED FUNCTIONS OF OPC
ROUTING OR SEQUENCING (Cont...)
● It is observed that in a job shop, jobs spend 95 percent of their time in
nonproductive activity. Much of this time is spent waiting in the queue. The
remaining 5 percent is divided between lot setup and processing. Many
facilities do not produce high enough volumes of a particular parts to
justify products layout. Random batch arrival rates and processing times
mean variability in resource requirements through time.

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 DETAILED FUNCTIONS OF OPC
CHARACTERISTICS OF SCHEDULING SYSTEM
High Volume Intermediate Volume Low Volume

Type of Continuous (flow Intermittent (flow and Job shop (batch or Project (single jobs)
production operations) batch operations) single jobs)
system

Key • Specialized • Mixture of • General-purpos • Mixture of

characteristics equipment equipment e equipment equipment
• Same sequence of • Similar sequence • Unique • Unique
operations unless for each batch sequence for sequence for
guided by each job each job
microprocessors
and robots

Design • Line balancing • Line and • Worker-machin • Allocating

concerns worker-machine e balance resources to
• Changeover time balance • Capacity minimize time
and cost • Changeover time utilization and cost
and cost
Operational • Material shortages • Material and • Job sequence • Meeting time
concerns • Equipment equipment • Work-center schedule
breakdowns problems loading • Meeting
• Quality problems • Set-up costs and • Workflow and budgeted costs
• Product mix and run lengths work in process • Resource
volume • Inventory utilization
accumulations
(run-out times)
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DETAILED FUNCTIONS OF OPC
SCHEDULING STRATEGIES
● Scheduling Strategies vary among firms and range from very detailed
scheduling to no scheduling at all. A cumulative schedule of total
workload is useful for long-range planning of approximate capacity needs.
However, detailed scheduling of specific jobs on specific equipment at
times far in future is often impractical—because of inevitable changes.

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DETAILED FUNCTIONS OF OPC
SCHEDULING STRATEGIES (Cont.…)
● For continuous systems, detailed schedules (production rates) can often be
firmed as the master schedule is implemented.
● For job shop operations, schedules may be planned based on the estimated
labor and equipment (standard hour) requirements per week at key work
centers. When detailed scheduling is desirable, capacity is sometimes
allocated to specific jobs as late as a week, or a few days, before the actual
work is to be performed. One of the goals of agile manufacturing
activities is to enhance the system’s ability to respond very quickly
to such customer needs. However, detailed scheduling is not
always used; some firms simply rely on priority decision rules
like first come, first served.

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DETAILED FUNCTIONS OF OPC
Techniques of Scheduling
● Master Scheduling (MS): It shows the dates on which important
production items are to be completed. It’s a weekly or monthly break-up of
the production requirements for each product.
● Shop Manufacturing Schedule: After preparing the MS, shops schedules
(SS) are prepared. It assigns a definite period of time to a particular shop
for manufacturing products in required quantity. It shows how many
products are to be made, and on what day or week.

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DETAILED FUNCTIONS OF OPC
Techniques of Scheduling (Cont.)
● Backward or Reverse Scheduling: External due date considerations will
directly influence activity scheduling in certain structures. The approach
adopted in scheduling activities in such cases will often involve a form of
reverse scheduling with the use of bar or Gantt charts. A major problem
with such reverse or ‘due date’ scheduling is in estimating the total time to
be allowed for each operation, in particular the time to be allowed for
waiting or queuing at facilities. Some queuing of jobs
(whether items or customers) before facilities is often
desirable since, where processing times on facilities
are uncertain, high utilization is achieved only by the
provision of such queues.

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DETAILED FUNCTIONS OF OPC
Techniques of Scheduling
● Forward Scheduling: For a manufacturing or supply organization a
forward scheduling procedure will in fact be the opposite of that
described above. This approach will be particularly relevant where
scheduling is undertaken on an internally oriented basis and the objective
is to determine the date or times for subsequent activities, given the times
loran earlier activity, e.g. a starting time.
● Example: A job is due to be delivered at the end of 12th week.
It requires a lead time of 2 weeks for material acquisition,
1 week of run time for operation-1, 2 weeks for operation-2,
and 1 week for final assembly. Allow 1 week of transit time
prior to each operation. Illustrate the completion schedule
under (a) forward, and (b) backward scheduling methods.
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Practice Questions
● Out of these, which is not the detailed function of OPC?
o Planning
o Satisfying the superiors
o Routing
o Scheduling

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 DETAILED FUNCTIONS OF OPC
solution
FORWARD Start by scheduling raw
SCHEDULING material and work

Obtain raw Oper Operation 2 Final

material ation asse
Required due
1 mbly date

1 2 3 4 5 6 7 8 9 10 11 12
Time period

BACKWARD
Obtain raw Oper Operation 2 Final SCHEDULING
material ation asse
1 mbly

Today’s date

Today’s date Operation time Transit or queue time

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DETAILED FUNCTIONS OF OPC
Techniques of Scheduling
● Optimized Production Technique (OPT): OPT was developed in Israel. It
recognizes the existence of bottlenecks through which the flow gets
restricted. It consists of modules that contain data on products, customer
orders, work center capacities, etc., as well as algorithms to do the actual
scheduling. A key feature of the program is to simulate the load on the
system, identify bottleneck (as well as other) operations, and develop
alternative production schedule.

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DETAILED FUNCTIONS OF OPC
● OPT is guided by the following rules:
o Balance flow, not capacity.
o The level of utilization of a non-bottleneck is not determined by its
own potential but some other constraint in the system.
o An hour lost at a bottle-neck is an hour lost for the total system.
o An hour saved at a non-bottle-neck is a mirage.
o Bottlenecks govern both throughput and inventories.

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DETAILED FUNCTIONS OF OPC
Techniques of Scheduling
● Optimized Production Technique (OPT):
o The transfer batch may not, and often should not , be equal to the
process batch.
o The process batch should be variable, not fixed.
o Move material as quickly as possible through the non-bottleneck
work center till it reaches the bottle-necks, where the work is
scheduled for maximum efficiency (large batches),
thereafter the work moves faster.
o Batch is of two types: transfer batch should be as
small as possible (ideally 1), and the Process batch
is larger.

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DETAILED FUNCTIONS OF OPC
Techniques of Scheduling (Cont.)
● OPT has some similarities with materials requirement planning (MRP). It
can be considered an extension of MRP: MRP can be used to form the
basis of a system for computer-aided scheduling and inventory control, to
which can be added the OPT approach for the identification of bottlenecks
and the maximization of throughputs.

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DETAILED FUNCTIONS OF OPC
DISPATCHING PHASE
● Dispatching is concerned with starting the processes. It gives necessary
authority to start a particular work, which has already been planned under
‘routing’ and ‘scheduling’. For starting the work, essential orders and
instructions are given. Therefore, the definition of dispatching is:
● ‘Release of orders and instructions for starting the production for an item
in accordance with the ‘route sheet’ and schedule charts’.

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DETAILED FUNCTIONS OF OPC
DISPATCHING PHASE (Cont.)
● Dispatching functions include:
o Implementing the schedule in a manner that retains any order
priorities assigned at the planning phase.
o Moving the required materials from stores to the machines, and from
operation to operation.
o Authorizing people to take work in hand as per schedule
o Distributing machine loading and schedule charts, route
sheet, and other instructions and forms.
o Issuing inspection orders, stating the type of
inspection at various stages.
o Ordering tool-section to issue tools, jigs and fixtures.

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DETAILED FUNCTIONS OF OPC
Dispatching or Priority Decision Rules
● Job shops generally have many jobs waiting to be processed. The
principal method of job dispatching is by means of priority rules, which are
simplified guidelines (heuristics) to determine the sequence in which jobs
will be processed. The use of priority rule dispatching is an attempt to
formalize the decisions of the experienced human dispatcher. Most of the
simple priority rules that have been suggested are listed in Table 5.6.
Some of the rules used job assignment are:
o first come, first served (FCFS), earliest due date (EDD),
longest processing time (LPT), and preferred customer
order (PCO).

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DETAILED FUNCTIONS OF OPC
Dispatching or Priority Decision Rules (Cont.)
● These rules can be classified as: Static or Dynamic.
● Static rules do not incorporate an updating feature.
● They have priority indices that stay constant as jobs
travel through the plant, whereas dynamic rules change
with time and queue characteristics.

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DETAILED FUNCTIONS OF OPC
● Standard Dispatching Rules
Rule Full form Description of the rule

SPT Shortest Processing Time Select a job with minimum

processing time
EDD Earlier Due Date Select a job which is due first

FCFS First Come, First Served Select a job that has been in
workstations queue the longest
FISFS First In System, First Served Select a job that has been on the
shop floor the longest
S/RO Slack Per Remaining Operation Select a job with the smallest
ratio of slack to operations
remaining to be performed
Covert Order jobs based on ratio-based
priority to processing time
LTWK Least Total Work Select a job with smallest total
processing time (SPT).

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DETAILED FUNCTIONS OF OPC
● Standard Dispatching Rules
Rule Full form Description of the rule

LWKR Least Work Remaining Select a job with smallest total

processing time for unfinished
operations.
MOPNR Most Operations Remaining select a job with the most
operations remaining in its
processing sequence.
MWKR Most Work Remaining Select a job with the most total
processing time remaining.
RANDOM Random Select a job at random.

WINQ Work In Next Queue Select a job whose subsequent

machine currently has shortest
queue.

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DETAILED FUNCTIONS OF OPC
Forms Used in Dispatching
● Work orders: are issued to departments to commence the desired lot of
products.
● Time card: is given to each operator in which the time taken by each operation
and other necessary operations are given.
● Inspection tickets: are sent to the inspection department, which shows the
quality of the work required, and stages at which inspection is to be carried out.
Afterwards these are returned with the inspection report and quantity rejected.
● Move tickets: are used for authorizing the movement of the
material from store to shops, and from operation to operation.
● Tool and equipment tickets: authorizes the tool department
that new tools, jigs, fixtures and other equipment may be
issued to shops.

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DETAILED FUNCTIONS OF OPC
CONTROLLING OR FOLLOW-UP PHASE
● After dispatching production orders to various shops, it is necessary to
regulate the progress of job through various processes. For this purpose, a
follow up section is formed. The function of follow-up section is to report
daily the progress of work in each shop in a prescribed format and to
investigate the causes of deviation from the planned performance. This
section sees that production is being performed as per schedule and tries
to expedite it.

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DETAILED FUNCTIONS OF OPC
CONTROLLING OR FOLLOW-UP PHASE
● Purpose of Controlling
o Material: should reach the shop in required time so that production
could be started as per schedule.
o Job progress: the follow up section sees that a particular product is
passing through all its operation from raw material to final shape as
per schedule.
o Assembly: follow up section sees that all the parts should be ready
for assembly purpose in actual quantities at required time.

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Causes Of Delay
● Error in routing, scheduling and dispatching
● Shortage and delay of material supply
● Equipment breakdown
● Lack of proper tools, gauges, jigs and fixtures, etc

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ANY QUESTIONS

?
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THANK YOU!

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