WELCOME TO

MY PRESENTATION
 Final Project on:
production planning and control
system

By: Negasa Zawde

 Agenda(Outline)
 Back ground of the company
 Justification
 problem statements
 objectives of the study
 General objective
 Specific objective
 scope of the study
 Significance of the study
 methodology of the study
 Result and Discussion
 Conclusion and Recommendation
 Company back ground

Mesfin industrial engineering (MIE), PLC was

established in1992 with a starting capital of birr 7
million.
So far MIE has been mainly engaged in the
fabrication and supply of trailer related products
that are serving the transport sector. About 90% of
all types of trailers (dry & fuel trailers, semi-
trailers, low beds etc…) required by the local
market have been supplied by MIE during the last
12 years.
MIE has also been engaged in rendering engineering
electro-mechanical erection services).
 Justification of the study
 Since its establishment, MIE has production planning and

control system. Before the implementation of the current

organizational structure, the company had a production

planning and control division which directly reports to

manufacturing department. After the current organization

structure created PPC has production planning and Division

planning.
 PPC is the base(input) for all process of the company’s, But

due Date of most product is not on stated due date .

 Problem statement
These Problems are observed on the existing system
of PPC
 Production delivery dates, which are specified by
the production planning, are not usually attained.
 Bottleneck machines/ there are bottleneck
operations that reduce productivity of the company
 Raw material ordering, purchasing and supply
system are very complex in bureaucracy (long lead
time of materials receiving from supplier)
 Objective of the study

General objective of study

The main objective of this study is to increase the
Productivity of the Company by Developing
(Modifying) the existing production planning and
control systems on Fabrication of 3-Axle draw bar Dry
Cargo Trailers and introducing systematic approach in
analyzing problems related to PPC.
 Specific objective of the study
 To analysis of all production planning and control
system related problems on fabrication of 3-Axle draw
bar Dry Cargo Trailers in detail
 To simplify materials purchasing process (simplify
complex purchasing bureaucracy)
 To enhance on time delivery of products
 Scope of the Study
The project is done in order to solve the problems that are raised due to
the existing system of production planning and control at MIE. The study
mainly focused on production planning and control on fabrication of 3-
Axle draw bar Dry cargo trailers

Limitations of the Study

As the nature of the study mainly depends on the quantity and quality of

the collected data, shortage of finance was a limitation to prepare,

distribute and collect several questionnaires papers, lack of computer lab

and lack of appropriated data from the company.

 Significance of study

The significance of this research is to explore solution to

problems related to PPC on 3-Axle Draw bar Dry Cargo

Trailer. It can improve production efficiency and effectiveness

of work flow and meet stated Due Date of product.

Consequently, suitable PPC model will be developed for the

industry to achieve appropriate production Due date.

 Methodology of the study

The Primary data source are by:

 Interviewing
 Fully Observing the existing situation
 Distributing of questionnaires
The secondary Data source are by:
Books, Manual of the company.
Data Analyzing Tools
 Production planning and control principles and techniques;
 Different models and fishbone Diagram
 Figures and tables
 Result and Discussion
Existing PPC system of MIE
 As the company is a job order company, most of its
productions are performed after job orders are
conformed.
Responses to questionnaires, interviews and physical
observations can be summarized as follows :
1. The company is low capacity utilization, reasons for
low capacity utilization are:
 Raw material shortage (shortage of commercial
items like Axle, sheet metal)
 Cont’d…
 Machine breakdown
 Exaggerated design capacity (customer order)

2.The company does not try to be selective in order

receiving (too many order received at the same time
when shop is very busy).

3. Poor delivery date(not attaining the stated due date)

of product
 Identified Main Problems Faced by
PPC section
To systematically identify main problems of the company
on fabrication of 3-Axle Draw bar Dry Cargo Trailer, two
important activities were done in the data collection
process.

I. Data collection from performance reports of MIE

II. Questionnaire distribution and interviewing MIE

workers
 Data collection from performance reports of MIE(2011years)
Months Sales perform Production No. of order capacity
(%) perform(%) delayed (%) utilization %

July 80 70 30 75
August 73 72 32 71
September 60 67 33 60
October 63 72 28 65
November 67 60 40 63
December 70 69 31 68
January 68 62 38 63
February 81 61 40 75
March 83 70 30 80
April 81 80 20 79
May 78 71 29 70
June 77 64 36 69
 Bar chart from above table
90

80

70

60

50
Sales perf.(%)
40
production perf(%)

30
No. of order de-
layed(%)
20
capacity utilization
%
10

0
ly t r er r r ry ry ch ril ay e e
ju us be be be a ua ar
n g
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em to
b
em em nu br Ap M Ju
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ra
Au p t oc v c Ja Fe
M a
se no de
Based on this table and bar chart, following results are
forwarded:
 In Production and sales performance of the 12 months is
decrease in November and January.
 Percentages of delayed orders in November months were
much exaggerated;40% order were delayed. Even though
there are exaggerated delays, the machine capacity
utilization of the company is low, mostly in September
the capacity utilization is very low (60%).
 If the company minimizes the Delayed order number its
productivity will increases exaggeratedly.
 II. Summarized Responses of Questionnaires or Interviews of MIE Workers:

S/N Questionnaires yes NO

1 Possibility of Sketching production flow (60%) (40%)

for 3-Axle draw bar dry cargo trailer

2 Customer identification (95%) (5%)

3 Effectiveness of the existing PPC (50%) (50%)
system

4 APP preparation (100%) (0%)

5 MPS and MRP preparation (70%) (30%)
When we summarize the problems (findings) assessed by
different approaches, main problems of the company are
grouped into the following:
 Poor delivery date performance: maximum 40%
 Low capacity utilization: averagely only 70%

Poor delivery date performance contributes the largest

share for the company’s weakness. Of course, the
capacity utilization is also low. However, if the delivery
date problem is solved, more customers will be attracted
and capacity utilization will be increased. Therefore,
analysis of poor delivery date performance has to be
given priority. Cause and effect Analysis of the problem
is analyzed using Fishbone Diagram.
 Proposed Solution to Main Identified
Problems
 Possible alternatives solution generated to minimize

delivery time problems are listed below.

 Strengthening the shop floor control mechanism

 Restructuring the manufacturing department to bring the

workshops under the direct supervision of PPC.

 Training the workers of fabrication shop

 Salary increment
Alternative Solutions and Evaluation
Their evaluation will be based on:
 Priorities of their importance
 The possibility or impossibility of their implementation.
When the generated alternatives are revised and
rearranged, they may result in the following summarized
alternatives.
 Employing foreign experts in some selected working
areas (mostly in maintenance area)
 Focusing on machines production
 Cont…
 Strengthening the market research work
 Creating intimacy with limited raw materials supplier
 Creating competitive environment among the workers
 Strengthening the maintenance planning process
 Identifying bottleneck machines
 Avoiding deliberate (confused)under estimation of due dates
 Human resource utilization improvement
 Improvement of data source for cost and delivery time
estimation
 Improvement of external resource utilization
 Strengthening the market research work
 Strengthening the production control mechanism
 Cont…
When the generated alternatives are revised and
rearranged, they may result in the following summarized
alternatives.
1.Human resource utilization improvement
One of the causes of poor delivery date performance at
MIE is inefficient human resource utilization. The
company is known for its high employment and release
rates.
This situation has adverse effect on smooth flow of
production.
The efficiency of human resource utilization can be
improved by:
 Cont…
 Giving appropriate training for concerned workers,

 Increasing salary of workers to minimize dissatisfaction

 Creating competitive environment among the workers, for
example incentive payment.
2. Improvement of external resource utilization
External resources like raw material suppliers and labor
power sources improve the delivery date efficiency of a
company.

The problem that the company faces every now and then is
raw material shortage.
 Cont’d…
 Causes of raw material shortage are low budget allocation
and long bureaucratic chain of purchasing procedure. The
company can minimize this problem by creating partnership
with selected local and foreign raw material suppliers.
 Systematic way Creating partnership with selected suppliers
cuts the tiresome bureaucratic chain of purchasing
procedures and shortens lead time of raw material supply,
and parallel the company can achieve of promised delivery
dates.
 3. Strengthening the production control
mechanism
 Partially, shop floor control activities are being
performed on fabrication of 3-Axle Draw bar Dry Cargo
Trailer. Here three conditions must be considered:

a) Orders are released to shops with route sheets and

material requisition.

b) Delivery time of any order is properly recorded on the

rout sheet.

c) Urgency level is also indicated on the route sheet

 Cont…
Order progress expediting is very weak at the company. The
report has to be prepared at least once in a week. Therefore,
the workshop planners and controllers have to give priority
for the production progress follow up. The advantage will
get is:
 Delivery date estimation of new orders can be reliable
 Overlooking of some orders will be avoided. All orders will

be treated according to the first come first served (FCFS)

principles of the company.

 The company will have good picture on its current and
potential customers
 Developing the Best Solutions supporting
with Model
Among the proposed solutions, the following are selected to
be given priority:
 Improvement of data source for cost and delivery date
estimations
 Strengthening the Production Control Mechanism
1. Improvement of data source for cost and delivery
date estimations
 This as this part is given the first priority because delay in
most job orders is due to inappropriate manufacturing
cost estimation and delivery time setting.
 Cont…
Manufacturing cost is estimated by calculating three cost
elements: material cost, direct labor cost and overhead
cost. Dimensions and weights of all the components of
the requested product will be measured or calculated.
Deviation of this procedure results in over estimation or
under estimation of manufacturing cost and delivery time.
 Strengthening the Production Control
Mechanism
 Even though some orders delay due to incorrect delivery
time estimation, machine breakdown or raw material
shortage, considerable amount of orders delay due to lose
production follow-up. Workshop planners and controllers
waste their time in routine works like job dispatching,
weekly report preparation and responding to customer
questions about the status their orders. To achieve well
organized shop floor control the researcher propose
model with three phases
 The proposed model has the following
phases.
I. Sales and production Planning phase,

II. Order Receiving and Dispatching phase

III. Shop Floor Control phase (work shop control
mechanism)

I. Sales and Production Planning phase

In this phase, annual sales and production of the

company are planned. The sales plan is decided to be
dependent on practical market assessment works.
 II. Order receiving and dispatching phase
In this phase, the first thing to do is to identify whether
the order is according to the plan or not and then to
check whether material is available or not. If most orders
being orders being received are not according to the
plan, monthly production plans have to be revised
according to the actual orders.
 Cont…
 Another important thing to be considered in this phase is
re-setting new delivery dates if the orders are not opened
within their validity dates. The production planning
engineer has to set new delivery date and inform the
customer if customer believes that the product cannot be
completed with the previously stated delivery date. The
second phase will be completed by preparing route sheets
and dispatching the order to workshops.
 III. Shop floor control phase
 The main activities of this phase are:
 Test piece production for new products to calculate actual
cost of production and to improve production method
 Machine load chart preparation which helps to identify
bottleneck machines, to realistically estimate delivery
times and to simplify production progress follows up
 Progress follow up, communicating encountered
problems to concerned individuals, progress evaluation
and reporting
 Cont…
The work flow of the above phases are detail
described in the following figures (models) and
responsible body for implementation is specified in
the table below.
 Conclusion and Recommendation

Conclusion
 Basedon the analysis made on production planning and control
system the following conclusions are drawn:
 The privately owned job order companies, MIE give strict

attention for market assessment. After getting an order, they

don’t take all the necessary fast decisions to attain promised

delivery dates. Their limitation is that they do not give

attention to formal production planning and control procedures.

 Cont…
This makes them to be short sighted.
 The delivery time estimation is unreliable since work
flow progress doesn’t strictly conducted. MIE’s
chronic problems are low capacity utilization, poor
delivery date performance.
 Most constraint (bottleneck) of the production that
cause for order delay is lack of Axle and breakage of
machines
 Recommendation
 Based on the given conclusions, the following
recommendations are forwarded:
 Stabilization of human resource plays great role.
Therefore, the company should has to do a lot in this
respect
 In material purchasing system, the company should be
Creating intimacy with limited raw materials supplier to
minimize long lead time of materials receiving.
 Cont…
To effectively attain the promised delivery dates
of job orders, production control plays great role.
Therefore, researcher suggests that production
control has to be given the first priority.
 So company should focus on shop floor control
activities being performed on fabrication of 3-
Axle Draw bar Dry Cargo Trailer
 Cont…
 Employees relevant to the work should be given
trainings on how use proper machine handling
system, taking proper care of the equipment so
as to minimize production loss and down time.
 Lastly, the company should implement the
developed model work flow (Production
planning and control Phases).
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