Unit-2 Production Planning & Control

2.1. Planning - Meaning, Objectives

2.2. Controlling - Meaning, Objectives
2.3. Production Planning &Control- Meaning, Objectives and Importance
2.4. Product Design & Product Development
2.4.1. Product Design - Meaning & Characteristics of a Good Product
2.4.2. Product Development, Factors Responsible for Product Development
2.5. Routine & Scheduling- Meaning, Importance, CPM & PERT

2.1 Planning - Meaning, Objectives:

Meaning of Planning –
Production planning means to fix the production goals and to estimate the resources which
are required to achieve these goals. It involves the means by which a manufacturing plan is
determined, information issued for its execution, data collected and recorded, which will
enable the plant to be controlled through all its stages. It prepares a detailed plan for
achieving the production goals economically, efficiently and in time. It forecasts each step in
the production process. It forecasts the problems, which may arise in the production
process. It tries to remove these problems. It also tries to remove the causes of wastage.
Production planning provides answers for two major questions, viz.,
1. What work should be done?
2. How much time will be taken to perform the work?

So, production planning decides the ways and means of production. It shows the direction. It
is based on sales forecasting. It is a prerequisite of production control.

In other words, Production planning is the planning of production & manufacturing modules
in a company or industry. It utilizes the resource allocation of activities of employees,
materials & production capacity, in order to serve different customers.

Definition: According to Ray Wild, production planning is defined as follows:

"Production Planning is concerned with the determination, acquisition and arrangement of
all facilities necessary for future operations."
Production Planning:
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. Therefore, objectives of production
planning are as follows:
 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.
A well thought production planning ensures that overall production process is streamlined
providing following benefits:
 Organization can deliver a product in a timely and regular manner.
 Supplier are informed will 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 dealing with facility planning, capital investment, location planning, etc.;
medium-range planning deals with demand forecast and capacity planning and lastly short
term planning dealing with day to day operations.

Objectives of Production Planning:

1. Effective utilization of resources.
2. Steady flow of production.
3. Estimate the resources.
4. Ensures optimum inventory.
5. Coordinates activities of departments.
6. Minimize wastage of raw materials.
7. Improves the labour productivity.
8. Helps to capture the market.
9. Provides a better work environment.
10. Facilitates quality improvement.
11. Results in consumer satisfaction.
12. Reduces the production costs.
The objectives in small details, one by one:
1. Effective utilization of resources - Production planning results in effective utilization of
resources, plant capacity and equipment. This results in low-cost and high returns for
the organization. To make adequate arrangement of men, money, materials, machines
tools, implements and equipment relating to production.
2. Steady flow of production - Production planning ensures a regular and steady flow of
production. Here, all the machines are put to maximum use. This results in a regular
production, which helps to give a routine supply to customers. To decide about the
production targets to be achieved by keeping in view the sales forecast.
3. Estimate the resources - Production planning helps to estimate the resources like men,
materials, etc. The estimate is made based on sales forecast. So production is planned to
meet sales requirements.
4. Ensures optimum inventory - Production planning ensures optimum inventory. It
prevents over-stocking and under-stocking. Necessary stocks are maintained. Stock of
raw material is maintained at a proper level in order to meet the production demands.
Stock of finished goods is also maintained to meet regular demands from customers.
5. Coordinates activities of departments - Production planning helps to coordinate the
activities of different departments. For e.g. the marketing department coordinates with
production department to sell the goods. This results in profit to the organization.
6. Minimize wastage of raw materials - Production planning minimizes wastage of raw
materials. It ensures proper inventory of raw materials and materials handling. This
helps to minimize wastage of raw material. It also ensures production of quality
products or goods. This results in a minimum rejects. So proper production planning and
control results in minimum wastage.
7. Improves the labour productivity - Production planning improves
the labour productivity. Here, 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 labour efficiency.
8. Helps to capture the market - Production planning helps 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 a better work environment - Production planning provides a better work
environment to the workers. Workers get improved working conditions, proper working
hours, leave and holidays, increased wages and other incentives. This is because the
company is working very efficiently.
10. Facilitates quality improvement - Production planning facilitates quality improvement
because the production is checked regularly. Quality consciousness is developed among
the employees through training, suggestion schemes, quality circles, etc.
11. Results in consumer satisfaction - Production planning helps to give a regular supply of
goods and services to the consumers at far prices. It results in consumer satisfaction.
12. Reduces the production costs - Production planning makes optimum utilization of
resources, and it minimizes wastage. It also maintains optimum size of inventories. All
this reduces the production costs.
2.2. Controlling - Meaning, Objectives
Meaning of Controlling -
 Production control is the activity of monitoring & controlling any particular production.
Production control is often run from a specific control room (or operations room). With
inventory control & quality control, production control is one of the key function.
 The production control is the function of mgmt. which plan, direct & control the material
supply & processing activities so that specified products are produced by specified
methods to meet an approved sales program. It ensures that activities are carried out in
such a way that the available labour & capital are used in the best possible way.

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.
Therefore, objectives of production control are as follows:
 Regulate inventory management
 Organize the production schedules
 Optimum utilization of resources and production process
The advantages of robust 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:
 Nature of production( job oriented, service oriented, etc.)
 Nature of operation
 Size of operation

Necessity of Production Control:

 Production process is a system consisting of material, labour & equipment combined
together by some dependence imposed by operations. Input factors in the process are
always uncontrollable. The controller of a production process tries to control the output
so that it is in conformity with the target set by the marketing department.
 In the present era of cut-throat competition, production control is a boon for an
enterprise. It tries to take corrective measures whenever there is some deviation from
the planned strategy. Goetz has rightly said that “Management planning seeks consistent,
integrated and articulated programs.” Production control aims to fulfill these needs.
 In the report on the elimination of waste in industry. President Noover’s committee states
that “Production control is the hallmark of production efficiency; it is a necessity and not
a luxury; a profitable investment and not an expense.”

Objectives of Production Control:

1. Provision of raw material, equipment, machines and labour.
2. To organise production schedule in conformity with the demand forecast.
3. The resources are used in the best possible manner in such a way that the cost of
production is minimised and delivery date is maintained.
4. Determination of economic production runs with a view to reduce setup costs.
5. Proper co-ordination of the operations of various sections/departments responsible for
production.
6. To ensure regular and timely supply of raw material at the desired place and of prescribed
quality and quantity to avoid delays in production.
7. To perform inspection of semi-finished and finished goods and use quality control
techniques to ascertain that the produced items are of required specifications.
8. It is also responsible for product design and development.

Thus, the fundamental objective of production control is to regulate and control the various
operations of production process in such a way that orderly flow of material is ensured at
different stages of the production and the items are produced of right quality in right
quantity at the right time with minimum efforts and cost.

The difference between - Production planning and Production control:

 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.
2.3. Production Planning & Control (PPC) - Meaning, Objectives & Importance
Meaning of Production Planning & Control (PPC):
Planning & control both is essential ingredient for success of an operation unit. Production
planning & control is a predetermined process which includes the use of human resource,
raw materials, machines etc. PPC is the technique to plan each and every step in a long
series of separate operation. It helps to take the right decision at the right time and at the
right place to achieve maximum efficiency.
 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 subsequent production control follow adaption of product
design and finalization of a production process.
 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.

The main purpose of production planning & control (PPC) is to establish routes & schedules
for the work that will ensure the optimum utilization of material, workers & machines and to
provide the means for ensuring the operation of the plant in accordance with these plans.
The benefits of production planning and control 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 levels are maintained at optimum levels at all time, i.e. there is
no over-stocking or under-stocking.
 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.
Objectives of Production Planning & Control:
 To ensure safe and economical production process
 To effectively utilize plant to maximize productivity
 To maximize efficiency by proper coordination in production process
 To ensure proper delivery of goods
 To place the right man for the right job, at right time for right wages.
 To reduce the waiting time

Importance of Production Planning & Control:

1. Materials Function: Raw materials, finished parts and bought out components should be
made available in required quantities and at required time to ensure the correct start and
end for each operation resulting in uninterrupted production. The function includes the
specification of materials (quality & quantity) delivery dates, variety reduction
(standardization) procurement and make or buy decisions.
2. Machines & Equipment: This function is related with the detailed analysis of available
production facilities, equipment down time, maintenance policy procedure & schedules.
Concerned with economy of jigs & fixtures, equipment availability. Thus the duties
include the analysis of facilities and making their availability with minimum down time
because of breakdowns, through staying efficient and on-time with future orders.
3. Methods: This function is concerned with the analysis of alternatives and selection of the
best method with due consideration to constraints imposed. Developing specifications for
processes is an important aspect of PPC and determination of sequence of Operations.
4. Routing: It is concerned with selection of path (route) which the raw follows to transform
into finished product. Routing find the most advantageous path. The duties include:
 Fixation of path of travel giving due consideration to layout.
 Breaking don of operations to define each operation in detail.
 Deciding the set up time and process time for each operation.
5. Estimating - After the process sheet for operations is made available, operation times are
then estimated. The function is then carried out using analysis on areas of operations
such as routing, raw materials, and various other areas; to plan for necessary facilities
with their financial availability, ordering and etc.
6. Loading & Scheduling: Scheduling is concerned with preparation of machine loads &
fixation of Starting & completion dates for each of the operations. Machines have to be
loaded according to their capability of performing the given task and according to their
capacity. Thus, the duties include:
 Loading the machines as per their capability and capacity.
 Determining the start and completion times for each operation.
 To Co-ordinate with sales department regarding delivery schedules.
7. Dispatching: This is the execution phase of planning. It is the process of setting
production activities in motion through release of orders and instructions. It authorises
the start of Production activities by releasing materials, components, tools, fixtures and
instruction sheets to the operator. The activities involved are:
 To assign definite work to definite machines, work centres and men.
 To issue required materials from stores.
 To issue jigs, fixtures and make them available at correct point of use.
 Release necessary work orders, time-tickets to authorize timely start of operations.
8. Expediting: This is the control tool that keeps a close observation on the progress of the
work. It’s a logical step after dispatching (to ‘follow-up’ or ‘Progress’). Progressing
function can be divided in to three parts, i.e. follow up of materials, follow up of work in
process and follow up of assembly. The duties include:
 Identification of bottlenecks and delays and interruptions because of which the
production schedule may be disrupted.
 To devise action plans (remedies) for correct the errors.
 To see that production rate is in line with schedule.
9. Inspection: It is a measure control tool. Though the aspects of quality control are the
separate function, this is of very much important to PPC both for the execution of the
current plans & scope for future planning. This forms the basis for knowing the limitations
with respects to methods, processes etc. which is very much useful for evaluation phase.
10. Evaluation: This stage though neglected is a crucial to the improvement of productive
efficiency. This stage includes evaluating the entire production process. This portion helps
identify areas where productivity is lacking and implements a strategy to improve that
particular area. A thorough analysis of all the factors influencing the production planning
and control helps to identify the weak spots and the corrective action with respect to
preplanning and planning will be effected by a feedback. The success of this step depends
on the communication, Data and information gathering and analysis.
2.4. Product Design & Product Development:
2.4.1. Product Design - Meaning & Characteristics of a Good Product:
Meaning of Product Design:
 Product design describes the process of imagining, creating, and iterating products that
solve users' problems or address specific needs in a given market.
 The key to successful product design is an understanding of the end-user customer, the
person for whom the product is being created.
 Product designers attempt to solve real problems for real people by using, empathy &
knowledge of their prospective customers’ habits, behaviors, frustrations, needs & wants.

Importance of Product Design:

 Good product design attracts more customers thereby giving an organization an edge
over competitors in the market.
 It is also important because it brings together three important issues, the concept, the
package and the process.
 Good product design is important in replacing obsolete designs.

The Product Design Process: The process of the product design will vary from company
to company, but these professionals do tend to follow somewhat similar philosophy or
framework when it comes to design thinking.
The design-thinking process involves several steps:
i) Empathize with people
ii) Define the problem
iii) Conceptualize / Ideate a solution
iv) Feasibility study and design planning
v) Build a prototype (Design & development)
vi) Test the solution (Verification)
vii) Validation & collateral production (Manufacturing)
viii) Improvement
Though it’s arranged in a linear way, the design process doesn’t necessarily move in a
linear path. Sometimes the results learned in a given step lead the team back to repeat or
refine an earlier step.
Characteristic of a Good Product:
1. Performance: How well the product functions
2. Conformance: How well the product conforms to the specifications or standards set for it.
3. Features: How many secondary characteristics does the product have to enhance its basic
function
4. Aesthetics: How attractive the product is.
5. Reliability: How well does the product maintain its performance during a certain given
time period.
6. Durability: How long the product lasts in use.
7. Serviceability: How easy is the product to maintain
8. Safety: How little, if any, is the risk to the users and those in the vicinity of the users
 When the product is in use, and
 When the product is thrown away after its useful life.
9. User friendliness:
 How easy is it to use. How easy is it to operate with
 Is it ergonomically all right
10. Customizing ability: How easily can the product be modified
 In case the requirements of the customer were to change ,or
 In order to accommodate improved / additional features in the future to suit the
customer’s needs then
11. Environment Friendliness: How safe is the product for the environment
 While it is being used and
 When it is discarded after its use
2.4.2. Product Development, Factors Responsible for Product Development
Meaning & Definition of Product Development:
Definition: Product development refers to the creation of a new product which has some
utility; or up-gradation of the existing product; or enhancement of the production process,
method or system. In simple words, it is all about bringing a change in the present goods or
services or the mode of production.

Meaning: Product development typically refers to all of the stages involved in bringing
a product from concept or idea through market release and beyond. In other words, product
development incorporates a product's entire journey. Identifying a market need—
Products solve problems.

Product development typically refers to all of the stages involved in bringing a product from
concept or idea through market release and beyond. In other words, product development
incorporates a product’s entire journey.

Product development is the complete process of delivering a new product or improving an

existing one for customers. The customers can be external or internal within a company. And
it can support many different types of products from software to hardware, to consumer
goods and services.

Product development methodologies are used to build many new offerings. In this article,
we are going to focus on its impact on software development for paying customers. It
encompasses all stages required to bring a new experience to end users — from ideation
and analysis to design, engineering, and testing.

A clear product development process gives companies a way to explore new product
ideas and learn what customers want in the early stages of conceptualization. The objective
is to ensure that the new or enhanced product satisfies a real customer need and helps the
company reach business goals.

Product development is the next step to product planning. It is the process of finding out the
possibilities of producing a product. It includes the decisions such as — whether it would be
feasible or not to produce the product.
Thus, product development includes the following —
 addition of a new product line to the product mix of the enterprise,
 elimination of a running product line from this product mix,
 addition of new product items to a product line,
 elimination of some existing product items from a product line,
 changes in the size, colour, design, packing, form, quality, characteristics and price of a
product, and
 discontinuation of an unprofitable product etc.

In short, devising a product to meet the changing requirements of the markets is known as
product development. In other words, the aim of product development is to
 Provide the goods the market demands in time,
 Adjust with the variation in quantity required, and
 Charge the price which the consumer is willing to pay after ensuring reasonable profits for
the organization.
 Finally, the product development by invention concerns itself with the development of
entirely a new product resulting in an increase in the product line.
 Product innovation is essential also to diversify the risks of business.
Methods of Product Development
Product development is one of the important aspects of industrial research. Product can be
developed in one of the three methods:
i) By imitation: Product development by imitation consists of marketing another product
similar to one in the market.
ii) By improvement or adaptation: Product development by adaptation refers to developing
an improved product for an already existing market.
iii) By innovation or invention: Product improvement consists of modification and
improvement in the existing quality, size, form or design of the existing product so that it
may appear almost like a new product. It includes the following:
a. Improvement in quality,

b. Improvement in features,

c. Improvement in style,
 d. Improvement in packing.

Categories of Product Development

There are four main tools for development of products viz.,
 Standardization,
 Simplification,
 Specialization and
 Diversification.
All these have a direct relation with production process and the acceptability of the product
in market.

Product development can be divided into two main categories:

a) Introduction of a New Product - There should be sufficient market research activities
and sales promotion work before introducing any product in the market. They are
essential because the chances of a new product failing in the market are quite high. The
company should properly evaluate the potential market for the product and for an
effective production planning, behavior pattern of the market change in technology, etc.,
should be carefully analyzed and assessed. The new product should have the capability to
replace the existing ones. This can be accomplished by proper designing and development
of the product.
b) Improvement of Existing Product - Every manufacturer continuously endeavors to
improve his product. For example, in automobile car industry, in 1920s there were two
wheel brakes in Sedans, Roodesters cars, etc., within a short period they were replaced
by four wheel brakes with self starters. In 1950s power brakes & power steering &
streamlining were introduced. Over the years, a no.of developments in the automobile
industry had taken place. Air-conditioned cars with improved tyres came into use.

Similarly, refrigerators with larger freezing units, were developed with passage of time.
Probably the most important factor contributing towards product development is the
functional demand of the ultimate consumer
Factors Responsible for Product Development:
Product Analysis is the process of identifying, looking at or disassembling a product and
identifying its main features. The aim is to understand more about a product and improve it
in the future.

Many factors influence the development of a product, some of them as shown below:

The picture above gives an outline to some of the many factors that affect the development
of a product:
1. Cost - The cost of the materials and labour required to manufacture the product. The
price potential customers are prepared to pay for the product.
2. Ergonomics - The product may be designed for human use. As a result ergonomics (sizes
etc...) Will pay a major role.
3. Materials - The availability of materials and the development of new, hi-technology
materials will have an influence on the final design of a product.
4. Customer Requirements - The customer will have great influence over the way a product
is designed and develops. As a product is designed it is normal for potential customers to
be questioned about the type of product or design that they prefer. For example, when
designing a mobile phone a design team will show potential customers several designs
and make changes according to their likes and dislikes.
5. Industrial Production - Products are manufactured by following mfg. techniques:
 Single Item / Prototype / One Off
 Batch Production
 Continuous Production
 Just in Time
6. Company Identity - The product may have to display the company image. Most
companies are proud of their public image. This may determine the colour scheme
applied to the product, the way it looks or even the materials that are used in its
manufacture (i.e. Recycled materials).
7. Aesthetics - The shape and form of the product may determine the layout of circuits or
mechanisms etc. Inside it. Products are often designed to look stylish. The style applied to
the outside of a product can quite easily influence the technology inside it. Aesthetics can
also alter the production / manufacturing techniques through which it is made.
8. Fashion - The fashion of the time influences the design of products. Usually people want
to buy up to date items not ones based on 'last years look'.
9. Culture - Some products are aimed at different cultures and countries. A product
acceptable in one culture may be looked up one as offensive or less desirable in another.
The use of colours and colour schemes are a good example of this.
10. Functions - The number of functions a product has to perform will inevitably affect its
design. Exactly what is the product going to do?
11. Environment - Many people (potential customers) are concerned about their
environment and the damage to it caused by industrial production. When designing a
product it may be wise to ensure that the materials can be recycled or the product
itself can be manufactured from a large proportion of recycled material.

Additional factors involved in new product development are –

i) Knowledge Management,
ii) Market Orientation,
iii) New Product Development Process,
iv) New Product Development Speed,
v) New Product Development Strategies,
vi) New Product Development Teams,
vii) Technology and
viii) Top Management Support.
2.5. Routine & Scheduling- Meaning, Importance, CPM & PERT:
Meaning of Routing: “Routing means determination of the route to be followed by each
part/component being transformed from input/raw material into final product.” Routing
manufacturing sometimes referred to as production routings. It is the route to be followed
during each step of the manufacturing process when transforming components & raw
materials into a final product. Routing show the production flow that needs to be achieved;
hence Routing lays down the flow of work in the plant. Routing also determines what work is
to be done and where & how it will be done i.e. it decides the path & sequence of operations
to be performed on the job from one machine to another. Routing of a production order
contains complete information of the product to be manufactured, complete details of each
operation to be performed, the set up time and the standard time needed for completing
the job/product.
Routing in various types of Products/Industries:
 Routing in continuous industries does not present any problem because of the product
type of layout, where the equipment is laid as per the sequence of operations required to
be performed on the components (from raw material to the finished products). In
continuous production systems with line type or product type layout, no managerial
effort is required for routing though different sets of machines may be utilized in
manufacturing the products in such systems.
 In open job shops, since, every time the job is new, though operation sheets (sometimes)
may serve the purpose, but the route sheets will have to be revise and this involves a
greater amount of work and expertise.
 For a single part/product is produced by fixed set of machines the job of routing becomes
automatic or mechanized.
 For different types of products to be manufactured like in intermittent production system,
routing becomes a complex task.

Functions of Routing: In all engineering industries, the steps in the direction of preparation
for production of a product are more or less the same and occur as follows:
 The future product exists only as an idea in the mind of the inventor & he draws the
sketch.
 The possible product is deeply analyzed, studied and developed to prepare the drawings.
 The next step is preparation of working drawings which may include the parts & assembly
drawings. Blue prints of the drawings with necessary technical details are prepared.
 The purpose of routing is to establish the optimum sequence of operations so that
the manufacture of the finished item is performed at the lowest cost and the fastest time.
 The function/purpose of Routing is to establish the optimum sequence of operations.
Routing in production management is related to considerations of layout, temporary
storage of in-process inventory and material handling.

Importance of Routing:
The routing decides the path and sequence of operations to be performed on the job from
one machine to another. The purpose of routing is to establish the optimum sequence
of operations so that the manufacture of the finished item is performed at the lowest cost
and the fastest time.

It is about selection of path or route through which raw materials pass in order to make it
into a finished product. The points to be noted while routing process are – full capacity of
machines, economical and short route and availability of alternate routing. Setting up time
for the process for each stage of route is to be fixed. Once overall sequence are fixed, then
the standard time of operations are noted using work measurement technique.

Meaning of Scheduling:
According to Kimball and Kimball, scheduling is defined as -
The determination of the time that should be required to perform the entire series as routed,
making allowance for all factors concerned.

Scheduling is, hence, the process of arranging, controlling and optimizing work and
workloads in a production process or manufacturing process. The scheduling, thus, may be
called as the time phase of loading. The loading means the assignment of work to a facility
(men & machine) whereas scheduling includes, in addition, the specifications of time &
sequence in which the work is to be done. Loading and Scheduling are concerned with
preparation of workloads and fixing of starting & completing date of each operation. On the
basis of the performance of each machine, loading & scheduling tasks are completed. In
manufacturing, the purpose of scheduling is to minimize the production time and costs, by
telling a production facility when to make, with which staff, and on which equipment.
Scheduling can be termed as:
 A detail of when and where each operation in the a manufacturing process is to be
performed or executed.
 Establishment of an activity time table which gives at which time to start and/or finish
each event or operation comprising any procedure or process.

Objectives of Scheduling:
The fundamental objective of scheduling is to arrange the manufacturing activities in such a
way that the cost of production is minimized and the goods produced are delivered on due
dates.
 In order to meet the delivery dates the sequence of operations is properly planned.
 To have minimum total time of production by having better resources utilisation.
 For having maximum capacity utilization and reducing the labour cost by minimization of
idleness of machines and manpower.
 To avoid unbalanced allocation of work among the various departments and
workstations.

Factors Affecting Scheduling:

Scheduling finalizes the planning phase of PPC. Following factors affect production
scheduling & are to be considered before finalizing the scheduling plan, they are-
1. External Factors:
a) Customer’s demand
b) Delivery dates of customer’s
c) Stock of goods already lying with dealers and retailers
2. Internal Factors:
a) Stock of Finished Products with the Enterprise
b) Time Interval to Process Finished Products from Raw Material
c) Availability of Machines and Equipment
d) Availability of Manpower
e) Availability of Materials
f) Manufacturing Facilities
g) Feasibility of Economic Production Runs
h) Types of Manufacturing a Product
1. External Factors: These are the factors which are not within the control of the
organization’s management. They are dictated by the outside forces to which the
management adjusts.
a) Customer’s demand - This demand is estimated by the sales forecasting deptt.
Scheduling is based on the forecasts of the expected sales of specific products in the
continuous production. The forecast is made on the basis of expected volume of
business in case of intermittent production.
b) Delivery dates of customer’s - In a continuous or mass production with seasonal
demand, the scheduling should be decided in such a way that there is a balanced
production throughout the year reducing the stock of inventories with a constant level
of production. In case of the intermittent production with the seasonal demand, it may
be adjusted by giving delivery on agreeable delivery dates to the consumer orders.
c) Stock of goods already lying with dealers and retailers - This situation arises in case of
continuous production of standardized goods. Usually the dealers and retailers are
maintaining certain stock levels with them. The scheduling should be based on the
stock position with the retailers and dealers.
2. Internal Factors: The factors within the control of management & should be manipulated
in such a way that objectives of the production function can be achieved most efficiently
and economically.
a) Stock of Finished Products with the Enterprise - Where the production is made to
stock, the scheduling should be adjusted to the stock of finished products with the
dealers. The new sales forecast should be made and the scheduling should be done in
the light of the fluctuations in the stock holding.
b) Time Interval to Process Finished Products from Raw Material - This is the time
required to process every sub assembly, and the finished product from the raw
materials.
c) Availability of Machines and Equipment - The various machines and equipment have
varying production capacities. Moreover their occupancy scheduling can be prepared
with the help of machine load charts.
d) Availability of Manpower - The scheduling should be done in the light of the
availability of the manpower. The production rush should be adjusted to overtime
working or hiring of the temporary labour.
 e) Availability of Materials - Sometimes stock out conditions interrupts the production
flow. Proper stock levels should be maintained to facilitate scheduling in continuous
production. In case of probable stock out of strategic goods, extra efforts should be
made to procure them as far as possible and the limited stock in hand should be issued
only for critical operations.
f) Manufacturing Facilities - The manufacturing facilities in terms of power
requirements, material handling services, store keeping and such other facilities should
be provided in accurate quantities so that it may not affect the smooth production
flow adversely and facilitate the scheduling function.
g) Feasibility of Economic Production Runs - Under the economic lot production, the two
costs i.e. set up cost and the carrying cost are equated.
h) Types of Manufacturing a Product - This determines the proper scheduling procedure.

Principles of Scheduling:
a) The principle of optimum task size: Scheduling tends to achieve maximum efficiency
when the task sizes are small, and all tasks of same order of magnitude.
b) Principle of optimum production plan: The planning should be such that it imposes an
equal load on all plants.
c) Principle of optimum sequence: Scheduling tends to achieve the maximum efficiency
when the work is planned so that work hours are normally used in the same sequence.

Inputs to Scheduling:
1. Performance standards: The information regarding the performance standards (standard
times for operations) helps to know the capacity in order to assign required machine
hours to the facility.
2. Units in which loading and scheduling is to be expressed.
3. Effective capacity of the work centre.
4. Demand pattern and extent of flexibility to be provided for rush orders.
5. Overlapping of operations.
6. Individual job schedules.
Importance of Scheduling:
Scheduling is the art of planning the activities so that one can achieve goals & priorities in
the available time. When it's done effectively, it helps the manager to achieve the desired
results, or else it causes neglecting the orders & leads to problems.

If any part of production is off, then delays happen. Manufacturing process optimization
means making sure dead stock and disappointed customers are non-existent.
In general, good production planning involves:
 Producing goods in the most logical and straightforward way possible;
 Thinking ahead — anticipating situations like high demand, shortfall, and bottlenecks;
 Identifying inefficient spots in the production chain; and
 Finding the optimal way to completing orders on time.

Initially, small inefficiencies may not be noticeable at first, but allow them to continue, then
it will grow into a big one. This leads to bottlenecks in production process. These bottlenecks
are slow spots in production line. They can cause significant issues in production flow, which
ultimately affects whole business.
 Customers will get frustrated with delayed orders.
 Team members will get stressed & demoralized while struggling to make-up/keep up.
 It takes an effective production manager to diagnose and address causes of bottlenecks.
This takes time & resources which could be spent elsewhere.
 Afterwards, measures need to be in place that prevents something similar from
occurring.
 Using production planning strategies helps you break this process down into manageable
pieces, which saves operation managers’ time while finding ways to optimize the
production flow.
Some may think that one can rush over management or sweep strategy under the rug. But,
make no mistake - Production scheduling in manufacturing is one of the hardest but most
important things to get right.
CPM & PERT: It is a resource utilizing algorithm that was developed in the 1950s by James
Kelly & Morgan Walker, with the aim of optimizing the cost & time of a project.
Meaning of CPM: The Critical Path Method in project management is a step-by-step
technique used in the planning process that explains the critical and non-critical activities of
a project. CPM is mainly used in projects to determine critical as well as non-critical tasks
that will help in preventing conflicts and reduce bottlenecks. CPM goals are to check time-
bound issues & process that causes blockage in the project. The CPM is preferably applicable
to projects that involve various activities that are associated with a complex method. Once
CPM is applied, it will help you keep your projects on track.
 In essence, CPM is about choosing the path in a project that will help in calculating the
least amount of time required to complete a task with the least amount of wastage.
 The Critical Path Method or CPM has been used in many industries starting from defence,
construction, software, aerospace, etc.
 Helps you recognize the action that needs to be performed on time so that the whole
project is completed on time.
 Indicates which responsibilities can be delayed and for how long without affecting the
overall project plan.
 Determines the least amount of time it will take to accomplish the project.
 Tells you the newest & latest time each activity can start on in order to manage the
schedule.
Advantages of CPM
 Provides an outline for long term coordination and planning of a project
 Recognizes critical activities
 Easy to plan, schedule and control project
 It improves productivity
 Manages the resource needed
Disadvantages of CPM
 For beginners its difficult to understand
 Software too expensive
 Sometimes, to structure CPM is too time-consuming
 It cannot control and form the schedule of a person involved in the project
 Allocation of resources cannot be monitored properly.
Meaning of Project Evaluation & Review Technique (PERT): PERT is a procedure
through which activities of a project are represented in its appropriate sequence & timing
i.e. to understand the planning, arranging, scheduling, coordinating & governing of a project.
It is a scheduling technique used to schedule, organize & integrate tasks within a project.
PERT is basically a mechanism for management planning & control which provides blueprint
for a particular project. All of the primary elements or events of a project have been finally
identified by the PERT i.e. this program helps to understand the technique of a study taken
to complete a project, identify the least & minimum time taken to complete the whole
project. In this technique, a PERT Chart is made which represent a schedule for all the
specified tasks in the project.
Characteristics of PERT:
 It serves as a base for obtaining the important facts for implementing the decision-
making.
 It forms the basis for all the planning activities.
 PERT helps management in deciding the best possible resource utilization method.
 PERT take advantage by using time network analysis technique.
 PERT presents the structure for reporting information.
 It helps the management in identifying the essential elements for the completion of the
project within time.
Advantages of PERT:
 Estimation of completion time of project is given by the PERT.
 It supports the identification of the activities with slack time.
 The start and dates of the activities of a specific project is determined.
 It helps project manager in identifying the critical path activities.
 PERT makes well organized diagram for the representation of large amount of data.
Disadvantages of PERT:
 The complexity of PERT is more which leads to the problem in implementation.
 The estimation of activity time are subjective in PERT which is a major disadvantage.
 Maintenance of PERT is also expensive and complex.
 The actual distribution of may be different from the PERT beta distribution which causes
wrong assumptions.
 It under estimates the expected project completion time as there is chances that other
paths can become the critical path if their related activities are deferred.
PERT vs CPM
 Abbreviation

PERT – Project Evaluation & Review Technique CPM – Critical Path Method

What does It Mean?

PERT is a popular project management CPM is a statistical algorithm which has

technique that is applicable when the time a certain start & end time for a project
required to finish a project is not certain

Model Type

PERT is a probabilistic model CPM is a deterministic model

Focus

The main focus of PERT is to minimise the time The main focus of CPM is on a trade-off
required for completion of the project. between cost & time, with a major
emphasis on cost-cutting.

Orientation type

PERT is an event-oriented technique. CPM an activity-oriented technique.

End of Unit - 2