UNIT I

 Introduction: Definition, Objectives, Scope and

Functions of Production & Operations Management,
Types of Production Systems, Transformation Process
Model, Systems Perspectives of Operations
Management, and Relationship of Operations
Management with Other Functional Areas.
 Production Planning and Control: Objectives,
Importance, Levels and Procedures of Production
Planning and Control.
 Production Design and Development: Product
Design, Factors determining the Design of a Product,
Approaches to Product Design, Product Development
Process, and Factors influencing Product
Development.
 PRODUCTION MANAGEMENT?

The job of coordinating and controlling the activities

required to make a product, typically involving
effective control of scheduling, cost,
performance, quality, and waste requirement.
 TWIN DEFINITION

Conversion of inputs into outputs using physical

resources and process to provide the desired utility
to customers while meeting the other organizational
objectives of effectiveness, efficiency & adaptability.
 HISTORICAL
EVOLUTION

 1776 -Specialization of labor in manufacturing -Adam Smith

 1799 -Interchangeable parts, cost accounting -Eli Viihitney and

others

 1832 -Division of labor by skill; assignment of jobs by skill; basics

of time study -Charles Babbage

 1900- Scientific management time study and work study

developed; dividing planning and doing of work -Frederick W.
Taylor

 1900- Motion of study of jobs -Frank B. Gilbreth

 HISTORICAL
EVOLUTION(CONT..)

 1901- Scheduling techniques for employees, machines jobs in

manufacturing -Henry L. Gantt

 1915 -Economic lot sizes for inventory control -F.W. Harris

 1927 -Human relations; the Hawthorne studies -Elton Mayo

 1931 -Statistical inference applied to product quality: quality

control charts -W.A. Shewart

 1935 -Statistical sampling applied to quality control;

inspection sampling plans -H.F. Dodge &H.G. Roming
 HISTORICAL
EVOLUTION(CONT..)

 1940- Operations research applications in World War ll -

P.M. Blacker and others.

 1946- Digital computer -John Mauchlly and J.P. Eckert

 1947-Linear programming -GB. Dantzig, Williams &

others

 1950- Mathematical programming, on-Iinear and stochastic

processes –A. Charnes, W.W. Cooper & others

 1951- Commercial digital computer; large s-cale

computations available. -Sperry Univac
 HISTORICAL
EVOLUTION(CONT..)

 1960- Organizational behavior; continued study of people

at work -L. Cummings, L. Porter

 1970- Integrating operations into overall strategy and

policy. Computer applications to manufacturing.
Scheduling and control. Material requirement planning
(MRP)-W. Skinner J. Orlicky and G. Wright

 1980-Quality and productivity applications from Japan

robotics. CAD-CAM -W.E. Deming and J. Juran
 SPECIALIZATION OF LABOUR IN
MANUFACTURING

 The specialization theory was devised by Adam Smith.

 The specialization theory is better known as division of
labour.
 The theory was created for specialized knowledge of a

particular trade or task, also known as self interest.

 Division of labour involved in the production of a
particular product leads to increased productivity
 SPECIALIZATION OF
LABOUR(CONT..)

 Today specialization can be seen in companies and

businesses.
 Kellogg specializes in cereals.
 Coca-Cola specializes in soft drinks.
 Hershey’s specializes in candy.
 Apple specializes technology.
 MOTION OF STUDY OF
JOBS

 Motion of study of jobs was devised by Frank B.

Gilbreth
 Motion study involves the analysis of the basic
hand, arm, and body movements of workers as they
perform work.
 HUMAN
RELATIONS

 Human relations theory is characterized by a shift

in emphasis from TASK to WORKER
 Need for attention
 Social interaction
 Individual achievement
 Intended as a move away from the “organization as
machine” metaphor
 Management recognizes employees as humans with
needs rather than cogs of a machine
 THE HAWTHORNE
STUDIES

 “The Hawthorne Studies were conducted from 1927-1932 at

the Western Electric Hawthorne Works in Chicago, where
Harvard Business School Professor Elton Mayo examined
productivity and work conditions.”
 “Mayo wanted to find out what effect fatigue and monotony
had on job productivity and how to control them through
such variables as rest breaks, work hours, temperatures and
humidity.”
 HISTORICAL MILESTONES IN OM

 The Industrial Revolution

 Post-Civil War Period
 Scientific Management
 Operations Research
 The Service Revolution
 The Computer Revolution
THE INDUSTRIAL REVOLUTION
 The industrial revolution developed in England in
the 1700s.
 The steam engine, invented by James Watt in 1764,
largely replaced human and water power for
factories.
 Adam Smith’s The Wealth of Nations in 1776 touted
the economic benefits of the specialization of labor.
 Thus the late-1700s factories had not only machine
power but also ways of planning and controlling the
tasks of workers
 THE INDUSTRIAL REVOLUTION(CONT..)

 The industrial revolution spread from England to

other European countries and to the United Sates.
 In 1790 an American, Eli Whitney, developed the
concept of interchangeable parts.
 The first great industry in the US was the textile
industry.
 In the 1800s the development of the gasoline engine
and electricity further advanced the revolution.
 POST-CIVIL WAR
PERIOD

 During the post-Civil War period great expansion of

production capacity occurred.
 By post-Civil War the following developments set the
stage for the great production explosion of the 20th
century:
 increased capital and production capacity
 the expanded urban workforce
 new Western US markets
 an effective national transportation system
 SCIENTIFIC
MANAGEMENT

 Frederick Taylor is known as the father of scientific

management. His system employed these steps:
 Each worker’s skill, strength, and learning ability were
determined.
 Stopwatch studies were conducted to precisely set standard
output per worker on each task.
 Material specifications, work methods, and routing sequences
were used to organize the shop.
 Supervisors were carefully selected and trained.
 Incentive pay systems were initiated.
 OPERATIONS RESEARCH

 During World War II, enormous quantities of resources

(personnel, supplies, equipment, …) had to be deployed.
 Military operations research (OR) teams were formed to
deal with the complexity of the deployment.
 After the war, operations researchers found their way
back to universities, industry, government, and
consulting firms.
 OR helps operations managers make decisions when
problems are complex and wrong decisions are costly.
 THE SERVICE
REVOLUTION

 The creation of services organizations accelerated

sharply after World War II.
 Today, more than two-thirds of the US workforce is
employed in services.
 About two-thirds of the US GDP is from services.
 There is a huge trade surplus in services.
 Investment per office worker now exceeds the
investment per factory worker.
 Thus there is a growing need for service operations
management.
 THE COMPUTER
REVOLUTION

 Explosive growth of computer and communication

technologies
 Easy access to information and the availability of
more information
 Advances in software applications such as Enterprise
Resource Planning (ERP) software
 Widespread use of email
 More and more firms becoming involved in E-
Business using the Internet
 Result: faster, better decisions over greater distances
UNDERSTANDING PRODUCTION AND
OPERATION MANAGEMENT
 'Operations Management' is the term often used with
production management; therefore it is useful to
understand the nature of operations management.

 Operations are useful actions or activities which are

done methodically as part of plan of work by a process
that is designed to achieve the pre-decided objectives.

 Operations management consists of scheduling work,

assigning resources including people, equipment,
managing inventories, assessing quality standards,
process type decisions and the sequence for making
individual items is a product mix set.
5 P’s of Operations Management
 Plants: The factory, the location where all the
activities take place, machinery and heavy equipments
 People: Direct or Indirect workforce

 Parts: The components, sub-assemblies or even

products
 Processes: Methodologies, technology, tooling, fixtures
for establishing, maintaining and improving
productivity;
 Planning and Control: This is an information
management system which initiates, directs, monitors
and collects feedback to enable efficient use of all other
resources
HISTORICAL MILESTONE IN OPERATION
MANAGEMENT
 Form a group and present the topic in class.
DEFINITIONS
 Production / Operations Management is defined as the
process which transforms the inputs/resources of an
organization into final goods (or services) through a set
of defined, controlled and repeatable policies.

 E.S. Buffa defines production management as,

“Production Management deals with decision making
related to production processes so that the resulting
goods or services are produced according to
specifications, in the amount and by the schedule
demanded and out of minimum cost.”
OBJECTIVES OF PRODUCTION MANAGEMENT
The objective of the production management is ‘to produce goods
services of right quality and quantity at the right time and right
manufacturing cost’.
1. RIGHT QUALITY: The quality of product is established based upon
the customers needs. The right quality is not necessarily best quality.
It is determined by the cost of the product and the technical
characteristics as suited to the specific requirements.
2. RIGHT QUANTITY: The manufacturing organization should
produce the products in right number. If they are produced in excess
of demand the capital will block up in the form of inventory and if the
quantity is produced in short of demand, leads to shortage of
products.
3. RIGHT TIME: Timeliness of delivery is one of the
important parameter to judge the effectiveness of
production department. So, the production department
has to make the optimal utilization of input resources
to achieve its objective.
4. RIGHT MANUFACTURING COST: Manufacturing
costs are established before the product is actually
manufactured. Hence, all attempts should be made to
produce the products at pre-established cost, so as to
reduce the variation between actual and the standard
(pre-established) cost.
OBJECTIVES OF OPERATION MANAGEMENT

 CUSTOMER SERVICE
 RESOURCE UTILIZATION
 DIFFERENCE BETWEEN PRODUCTION AND
OPERATIONS MANAGEMENT
 Production management and operations management are
differentiated on the basis of tangibility of finished goods or
services. Production management and operations
management are used interchangeably.

There are only two points for describing the difference

between production and operations management.
 The term 'production management' is more frequently used
for a system where tangible goods are produced, whereas
operations management is used for various inputs are
transformed into intangible services.
 The second distinction relates to the evolution of the subject.
Operations management is the term used nowadays
whereas the production management precedes operations
management in the historical growth of the subject.
 POM is the conversion of raw materials and
information into finished goods inventory or product or
services.
 In other words, the conversion of input into output
using physical resources ,so as to provide the desired
output while meeting the various objectives such as
,productivity , effectiveness ,adoptability and
efficiency.
Production System
THE EXAMPLES OF A PRODUCTION
SYSTEM ARE AS FOLLOWS:
Tangible goods : Consider an example of a
manufacturing industry like a Sugar Industry. Here,
sugarcane is first used as an input, then the juice of
sugarcane is processed through a conversion process,
finally to get an output known as a refined sugar
(used for mass consumption).

Intangible goods : Consider an example from a service

industry that of a software-development firm or
company. Here, initially, written program codes are
used as an inputs. These codes are then integrated in
some database and are provided with a user-friendly
interface through a conversion process. Finally, an
output is made available in form of an executable
application program.
FUNCTIONAL AREAS OF PRODUCTION AND
OPERATION MANAGEMENT

 Facility location
 Facility layouts and material handling.

 Product design

 Process design

 Production and planning control

 Quality control

 Materials management

 Maintenance management

 Customer feedback mechanism

FACILITY LOCATION
 Location of facility (machines, department) for
operations is a long term capacity decision that affects
business organization.
 The selection of location is a key decision as a heavy
investment is made in building plant and installing
machineries.
 The purpose of facility location study is to determine
the optimal facility location that provides greatest
advantage to the organization.
 FACILITY LAYOUT AND MATERIAL HANDLING

 It is defined as an optimal arrangement of

facilities in both manufacturing and service
environment.
 The objective of facility layout is to maximize the
material handling cost.
 Material handling refers to the movement of
materials from one machine to another during
the process of manufacturing.
 In other words it is defined as the art and science
of moving ,packaging and storing of product in
any form.
 Proper design of plant layout and material
handling devices increases the output, speeds up
the deliveries and decreases the cost of
production
PRODUCT DESIGN
 Product design deals with conversion of ideas
into reality
 Product development transforms the needs of
customers provided by the marketing into usable
products.
 The product design also optimizes the processes
by which the product can be manufactured in the
minimum possible manufacturing time.
PROCESS DESIGN
 Product design is a routing of complete process
for converting the raw material into finished
goods inventory.
 The decision encompass process selection, choice
of technology, flow analysis and layout facilities.
 Important decision in process design are to
analyze the workflow and optimize the workflow
PRODUCTION PLANNING & CONTROL
 It is defined as the process of planning the
production to meet the demand at optimum
production cost.
 The main working principle of production
planning and control is “First plan your work and
then work on your plan”.
 The main function of production planning and
control includes planning, routing, scheduling,
dispatching,monitoring and follow up
QUALITY CONTROL
 QC is defined as a systematic approach that can
be used to manufacture a product within the
approved design specification.
 QC also aims at the prevention of defects at the
source ,relies on effective feedback system and
corrective action procedures.
 The main objectives of QC are:
CONTD..

1. To minimize manufacturing cost through

reduction of losses due to defects.
2. To produce optimal quality at reduced price.
3. To ensure satisfaction of customers by providing
quality goods.
4. To make inspection prompt to ensure quality
control
5. To check the variation during manufacturing.
MATERIAL MANAGEMENT
 Material management is that area of
production/operation management ,which deals
with the acquisition, control and use of materials
needed for timely completion of manufacturing of
finished goods.
 The main objectives of material management are:

1. To minimize material cost.

2. To purchase ,receive and store materials

efficiently and to reduce the related cost.
3. To identify new suppliers that can deliver order
in time.
MAINTENANCE MANAGEMENT
 The main objective of maintenance management
are:
1. To achieve minimum breakdown and to keep
the plant in good working condition.
2. To keep the facilities in proper condition.
3. To ensure the availability of machines, building
and services in good and proper condition.
SCOPE OF OPERATION MANAGEMENT
 Forecasting
 Capacity planning

 Scheduling

 Managing inventories

 Assuring quality

 Motivating employees

 Deciding where to locate facilities

 Design of work system

 Operations planning and control

 Resource requirement planning

 Project management

 Quality management
 OPERATIONS MANAGEMENT?

Operations management is an area of management

concerned with overseeing, designing, and
controlling the process of production and
redesigning business operations in the production of
goods or services.
ROLE OF OPERATION MANAGEMENT
 The role of operation management is to produce
the desired product in right quantity and quality
by specified methods so that the optimal
utilization of resources are met.
 Broadly the role of OM is categories as

Service level
Operation
management
Resource
utilization.
 Customer service Resource utilization
objective: objective
 To provide  To achieve adequate
agreed/adequate levels of resource
levels of customer utilization e.g. to
service by providing achieve agreed levels
goods services with of utilization of
the right specification materials, machines
at the right cost and and labour.
at the right time.
CLASSIFICATION OF PRODUCTION SYSTEM

Mass
Production volume

production
Batch
production
Job-shop
Production

Output/product variety
 Job shop production: In this system products
are manufactured to meet the requirements of a
specific order. The quantity involved is small and
the manufacturing of the product will take place
as per the specifications provided by the
customer .

 job production can be classified as:

1. Job produced only once

2. Job produces at irregular interval

3. Job produced at regular interval.

Some Examples: tailor shop, automobile repair

etc.
 Batch production: It is another type of
production system where similar types of parts
are produced in large volumes.

 This type of production system is classified into:

1. A batch produced only once

2. A batch produced at irregular intervals

3. A batch produced at regular intervals.

Examples: tyre and tube production, readymade

garments, cosmetics manufacturing industry.
 Continuous Production: in such type of
production system ,the machines and resources
such as manpower ,are completely utilized for
production of identical products. As the name
implies, the type of production system is
generally associated with the large quantities
having high rate of demand .
 It is classified into 2 types:

1. Mass production

2. Flow production
1.Mass Production: In this production system
the same product type is produced in large
volume in order to meet the demand. In such
system the firm needs good planning of
resources, such as material, machines and
manpower.
Examples: Auto parts,componenets of industrial
products.
2. Flow Production: in such production system
the design of the entire plant is done as per the
need of the product.
In contrast in mass production the design of the
plant is done as per the need of product type and
therefore the resources of mass production can be
used to produce similar products.
Such flexibility is not associated with flow
production system .
Example: cement factory, sugar factory oil
refinery etc.
 CHARACTERISTICS OF PRODUCTION
SYSTEM

1. Type of layout: For batch/job shop system

process layout is most suitable while for
mass/flow product layout is most suitable.
2. Product type and its design: For batch/job
shop production system ,wide ranges of products
are manufactured but in small quantities and
product design in change from lot to lot as per
specifications of the product. But for continuous
production system few or one product is
manufactures in large quantities and also
product design is standardized and does not
change frequently.
3. Machine setup time: the machine set up time in
batch/job shop production system is higher than the
continuous production system due to frequent
changes in the specifications of the product and its
design.
4. Order size: in case of batch/job shop production
system ,the order size is in small and orders are
generally not repeated.
5. Investment: machine investment in batch/job shop
production is slightly higher than the machine
investment in continuous production system.
6. Material handling equipment and its cost: the
cost is higher in batch/job shop system as the
material handling is done on various routes due to
the production of varieties of products, while in the
continuous production system material movement is
observed in well defined routes.
7. Maintenance and service: maintenance units are
functional in every production system.

7. Utilizing production capacity: it may or may not

be completely utilized as the production is order
based .
 BENEFITS OF AN EFFICIENT OPERATIONS
MANAGEMENT

1. Effective utilization of resources.

2. Reduced work-in-process inventory.
3. Increased responsiveness to customer needs.
4. Reduced hidden cost
5. Reduced production cost
TRANSFORMATION
 Organisations produce goods and services
by converting input into outputs via a
process known as the transformation
process.
 Transformation process is any
activity or group of activities that
takes one or more inputs, transform
and adds value to them and provides
output for customers.
Transformation process includes:

 Changes in the physical characteristics of

materials or customers
 Changes in the location of materials, information
or customers
 Changes in the ownership of materials or
information
 Storage or accommodation of materials,
information or customers
 Changes in the purpose or form of information

 Changes in the physiological or psychological

state of customers.
TRANSFORMATION PROCESS
 NEED FOR
TRANSFORMATION
 “Nothing is permanent except change” .every
organization has to reinvent and rediscover itself
from time to time in view of the turbulent change
in its external environment.following are the
reasons for transformation
1. Obsolescence of existing management
system,routine and practices.
2. Continous change in the external environmental
forces
3. Increased competition in the market because of
entry of new players and launch of substitutes
4. Need to redefine the business i.e. formulation of new
mission and goals.
5. Integration of organizational restructuring
,technological innovation and human resource
development.
6. Adoption of TQM
7. Enhancing the public image of the organization.
 SYSTEMS PERSPECTIVES OF
OPERATIONS MANAGEMENT

Basics of System:
A System is a group of interrelated items
A system is divided into a series of parts or subsystems,
and any system is a part of a larger system.
The system’s boundary defines what is inside the
system and what is outside.
A system’s environment is everything outside the
system boundary that may have an impact on the
behaviour of the system.
A system’s inputs are the physical objects of information
that enter it from the environment and its outputs
are the same which leave it for the environment.
 Systems view of operations management states
that activities in an operations system can be
classified as inputs, transformation process and
output. Inputs are classified into three general
categories-external, market and primary
resources.
 PRODUCTIVITY

 Productivity is a relationship between the output

(product/service) and input (resources consumed
in providing them) of a business system. The
ratio of aggregate output to the aggregate input
is called productivity.

 Productivity = output/Input

 For survival of any organization, this

productivity ratio must be at least 1.If it is more
than 1, the organization is in a comfortable
position. The ratio of output produced to the
input resources utilized in the production.
 IMPORTANCE

 It helps to cut down cost per unit and thereby

improve the profits.
 Gains from productivity can be transferred to the
consumers in form of lower priced Products or better
quality products.
 These gains can also be shared with workers or
employees by paying them at higher rate.
 A more productive entrepreneur can have better
chances to exploit expert opportunities.
 It would generate more employment opportunity.
 Overall productivity reflects the efficiency of
production system.
 More output is produced with same or less input.
 PRODUCTIVITY MEASUREMENT
 Productivity may be measured either on
aggregate basis or on individual basis, which are
called total and partial measure.
 Total productivity Index/measure = Total output

Total input
Total production of goods and services
Labour+material+capital+Energy+management

Partial Productivity: productivity of each resource

calculated seperately.
= Output in a given period
labour hours used in the period
 JAPANESE TECHNIQUES FOR
PRODUCTIVITY IMPROVEMENT

 Toyota, a giant Japanese automobile company

was pioneer in development and application of
various productivity improvement techniques
under Toyota Production System (TPS). Taiichi
Ohno developed the Toyota Production System
(TPS) after World War II. Some of the selected
Japanese Productivity Improvement techniques
are
 A) JIDOKA: Jidoka is a Toyota concept aimed at
describing the man-machine interface such that
people remain free to exercise judgment while
machines serve their purpose. The jidoka system
shows faith in the worker as a thinker and allows all
workers the right to stop the line on which they are
working. Jidoka is often referred to as „automation
with a human mind‟. The jidoka way of working
consists of following three principles- Do not make
defects, Do not pass on defects, Do not accept
defects.
 B) HEIJUNKA : focuses on achieving consistent
levels of production. It is defined as „distributing
the production of different [body types] evenly
over the course of a day‟ It incorporates the
principles of line balancing by attempting to
equate workloads, leveling demand out by
creating an inventory buffer and replenishing
that buffer. It believes in providing even work
load for all employees. Heijunka has the
capability of reducing lead times by minimizing
time losses due to frequent process changeovers.
 C) KAIZEN Techniques: Kaizen (Continuous
improvement) is a management supported
employee driven process where, employees make
a great number of continuous improvement
efforts.
 5 P’S OF PRODUCTION MANAGEMENT
 The division of production management functions
in to 5 P’s (product, plant, programme, processes
and people) will provide useful conceptual
framework for the various activities performed by
production or operations manager.

Product

People Plant

5 P’s

Processes Programme
1. THE PRODUCT:
Product is the link between production and marketing. It is
not enough that a customer requires product but the
organisation must be capable of producing the product.
As per the product policy of the organisation an agreement is
reached between the various functions on the following
aspects of the product,
1. Performance
2. Quality and reliability
3. Quantity and selling price
4. Delivery schedule
To arrive at the above, the external and the internal factors
which affect the various aspects such as market needs,
existing culture and legal constraints and the
environmental demands should be given due
consideration. Thus the major policy decisions regarding
variety of product mix is going to affect the producing
system.
2. THE PLANT
 The plant accounts for major investment (fixed
assets).The plant should match the needs of the
product; market, the worker and the organisation.
The plant is concerned with;
1. Design and layout of building and offices
2. Reliability, perfect, maintenance of equipments
3. Safety of operations
4. The financial constraint
 Plant layout deals with physical arrangement of
plants and machineries within the selected site. The
layout should be such that it should allow for smooth
movement of men and materials with minimum back
tracking. The type of the layout is dependent on
production type, volume of demand, etc.
3. THE PROCESS:
 There are always number of alternative methods of
creating a product. But it is required to select the one
best method, which attains the objectives.
In deciding about the process it is necessary to
examine the following factors:
1. Available capacity
2. Manpower skills available
3. Type of production
4. Layout of plant
5. Safety
6. Maintenance required
7. Manufacturing costs
4. THE PROGRAMME:
 The programme here refers to the timetable of
production.
Thus, the programme prepares schedules for:
1. Purchasing
2. Transforming
3. Maintenance
4. Cash
5. Storage and transport
5. THE PEOPLE:

 Production depends upon people. The people vary in

their attitudes, skill and expectations from the work.
Thus, to make best use of available human resource,
it is required to have a good match between people
and jobs which may lead to job satisfaction.
The production manager should be involved in
issues like:
1. Wages/salary administration
2. Conditions of work/safety
3. Motivation
4. Training of employees
 NEW TRENDS
 Global market place: globalization of business has
compelled many manufacturing firms to have
operations in many countries where they have certain
economic advantage.
 Total Quality Management: adopted by many
firms to achieve customer satisfaction by a never
ending quest for improving the quality of goods and
services.
 Flexibility: the ability to adapt quickly to change in
volume of demand ,in the product mix ,product design
or delivery schedule. This is some times called agile
manufacturing.
 Time reduction: reduction of manufacturing cycle
time and speed to market for a new product provide
competitive edge.
 Technology: advancement of technology has led way
to new products, new processes, new material and
components.Automation,computerization,information
and communication technologies have revolutionized
the way companies operates.
 Worker involvement: assigning responsibility for
decision making and problem solving to the lower
levels of the organization. This is also known as
employee involvement and empowerment.
 Re-Engineering: this involves drastic measures to
improve the performance of the firm. It involves the
concept of clean-slate approach or starting from
scratch redesigning the business process.
 Corporate Downsizing(right sizing): this is
become necessary due to competition, lowering
productivity, need for improvement.
PRODUCTION PLANNING AND CONTROL.

 Production planning and control can be defined

as the “direction and coordination of firms’
resources towards attaining the prefixed goals.”
 It helps to achieve uninterrupted flow of
materials through production line by making
available the materials at right time and
required quantity.
 Production planning starts with the analysis of
the given data, i.e., demand for products, delivery
schedule etc., and on the basis of the information
available, a scheme of utilisation of firms
resources like machines, materials and men are
worked out to obtain the target in the most
economical way.
Production Control
In spite of planning to the minute details, most of the
time it is not possible to achieve production100 per
cent as per the plan. There may be innumerable
factors which affect the production system and because
of which there is a deviation from the actual plan.
Some of the factors that affect are:
1. Non-availability of materials (due to shortage, etc.);
2. Plant, equipment and machine breakdown;
3. Changes in demand and rush orders;
4. Absenteeism of workers; and
5. Lack of coordination and communication between
various functional areas of business.
 NEED FOR PRODUCTION
PLANNING AND CONTROL
 Production planning and control serves as a useful tool
to coordinate the activities of the production system by
proper planning and control system.PPC is needed to
achieve:
1. Effective utilisation of firms’ resources.
2. To achieve the production objectives with respect to
quality, quantity, cost and timeliness of delivery.
3. To obtain the uninterrupted production flow in order to
meet customers varied demand with respect to quality
and committed delivery schedule.
4. To help the company to supply good quality products to
the customer on the continuous basis at competitive
rates.
 OBJECTIVES OF PRODUCTION
PLANNING AND CONTROL
1. Systematic planning of production activities to
achieve the highest efficiency in production of
goods/services.
2. To organize the production facilities like machines,
men, etc., to achieve stated production objectives with
respect to quantity and quality time and cost.
3. Optimum scheduling of resources.
4.Coordinate with other departments relating to
production to achieve regular balanced and
uninterrupted production flow.
5. To conform to delivery commitments.
6. Materials planning and control.
7. To be able to make adjustments due to changes in
demand and rush orders.
PHASES OF PRODUCTION
PLANNING AND CONTROL
FUNCTIONS OF PRODUCTION
PLANNING AND CONTROL
Functions of production planning and controlling is
classified into:
1. Pre-planning function
2. Planning function
3. Control function
The functions of production planning and
controlling are depicted in the Fig next slide
1. PRE-PLANNING FUNCTION
Pre-planning is a macro level planning and deals with
analysis of data and is an outline of the planning policy
based upon the forecasted demand, market analysis
and product design and development.
This stage is concerned with process design (new
processes and developments, equipment policy and
replacement and work flow (Plant layout).
The pre-planning function of PPC is concerned with
decision-making with respect to methods, machines
and work flow with respect to availability, scope and
capacity.
2. PLANNING FUNCTION
The planning function starts once the task to be
accomplished is specified, with the analysis of four
M’s, i.e., Machines, Methods, Materials and
Manpower.
This is followed by process planning (routing). Both
short-term (near future) and long-term planning are
considered.
Standardisation, simplification of products and processes
are given due consideration.
3. CONTROL FUNCTION
Control phase is effected by dispatching, inspection and
expediting materials control, analysis of work-in-process.
Finally, evaluation makes the PPC cycle complete and
corrective actions are taken through a feedback from
analysis. A good communication, and feedback system is
essential to enhance and ensure effectiveness of PPC.
PRODUCT DESIGN AND
DEVELOPMENT
 Product Design can be defined as the idea generation, concept
development, testing and manufacturing or implementation of
a physical object or service.
 Organization success is dependent on customer
satisfaction and delight.
 Customer satisfaction is achieved through
development of product and service, which have all
attributes required by the customer.
 A success product or services do not only have
attractive package design but should be also able to
provide robust performance.
 Thus, product design must be practical enough for
production and powerful enough to provide a
competitive advantage.
A good product design has following common features:
Utility: The product design should make product
utility as per expectation of customers and provide
steady performance through the product life.
Producible: Product design should enable effective
production of product through available production
methods.
Profitability: Product design should make economic
sense as to deliver value to customer and
sustainability to the organization.
Differentiable: A good product design should enable
product to be differentiate among its competition.
This can be achieved by attractive packaging and
also by providing additional service on the product.
Factors Affecting Product Design
Correct Team Selection: This is very essential to get the correct
team in place which has expert designers who are not only aware
and comfortable with technology but also understanding of
customer expectation.
Customer Involvement: Involvement of customer in product design
and testing can provide insight into the direction of the project
Prototyping and testing: Product design is high risk concept as it
involves commitment of capital and man-power; therefore, it is
imperative that extensive prototyping and testing are done with
customer and market.
Raw Material: It is essential that raw material to be used in the
production meets the quality standards of the end product.
Production method and process layout: Feasibility of production
method and process layout determines future success of the
product.
External Factors: Environmental and government regulations
plays an important part in product design. And these norms are
updated from time to time.
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