UNIT 2

P L A N N I N G & C O N T R O L O F O P E R AT I O N S
DEFINITION (CHARLES A. KOEPKE)
Production Planning & Control is the co-ordination of series of functions
according to a plan which will economically utilize the plant facilities and
regulate orderly movement of goods through entire manufacturing cycle from
procurement to shipping
• Objectives
– Systematic planning to achieve highest efficiency
– Organize production facilities to achieve production objectives
– Optimum scheduling of resources
– Coordinate with other departments to achieve uninterrupted production flow
– Conform delivery commitments
– Enhance material planning & control
– Enable adjustments in demand
OPERATION PLANNING & CONTROL
DECISION-MAKING
• What to produce
• How to produce
• Where to produce
• When to produce
• Who will produce
• How much to produce
PHASES
PLANNING ( PRE-PRODUCTION PLANNING)

Forecasting

Aggregate Production Plan

Month 1 2
Mattress Production 900 950

Master Production Schedule for Mattress Models

1 2 3 4 5 6 7 8
Model 327 200 400 200 100
Model 538 100 100 150 100
Model 749 100 200 200
PHASES
PLANNING (ACTIVE PLANNING)
• Active planning
– Process planning & routing
• Sequence of stages in production process
• Output – route sheet
• Route sheet – document listing sequence of operations needed to complete job
PHASES
• Active Planning • Execution or Implementation
– Material planning (MRP) – Dispatching
– Machine planning
• transition from planning
– Loading
to action phase where the
• Assignment of work to men and
machine
worker is ordered to start
– Scheduling the actual work
• Sequence in which the work will • Control
be carried out and decide starting
– Progress reporting
and finishing time for the job
– Corrective action
MATERIAL REQUIREMENT PLANNING
(MRP)
• Approach to the problem of
– Determining number of parts, components and material needed to produce
end item
– Providing schedule specifying when each of these materials, parts &
components should be ordered or produced
• Is most valuable in industries where number of products are made in batches
• Used in case of Dependent Demand / Complex products
• LOT SIZE – quantity of product produced at one time (single production run)
– LOT for LOT
MATERIAL REQUIREMENT PLANNING
(MRP)
• Objective
–Maintain lowest possible level of inventory
–Reduction in production & delivery lead time
–Realistic commitment
–Increased efficiency
STEPS OF MRP

1. Estimate demand and material required

2. Check demand against inventory and allocate resources
3. Production scheduling
4. Monitor process
• We need to produce Product T, which is made of two parts U and three parts V. Part U, in turn, is
made of one part W and two parts X. Part V is made up of two parts W and two parts Y. Following
is the product structure tree of Product T.
 BOM FILE
• Complete product description - Parts, materials and components required

Level Item Lead Time (weeks) Quantity

0 T 1 1

1 U 2 2

1 V 1 3

2 W 1 1

2 X 1 2

2 W 2 2

2 Y 1 2
 QUESTION
• Consider that demand for Product T is 100 units in a month
• State the quantity (units) of following required to manufacture 100 T’s:
– U, V, W, X, Y

Level Product Quantity

0 T 100
1 U–2 2*100 = 200
1 V–3 3*100 = 300
2 W -1+2 1*200+2*300=800
2 X–2 2*200=400
2 Y–2 2*300=600
 Aggregate Production Plan

MRP CALCULATION
Month 1 2
T 100 150
• ..\MPS CALCULATION.xlsx Master Production Schedule for T
1 2 3 4 5 6 7 8
T 100 150
PRODUCT STRUCTURE TREE
 BOM (BILL OF MATERIALS)

• Complete product description - Parts, materials and components required

Level Item
0 Fire Extinguisher (FE)
1 Cylinder (CY)
1 Valve Assembly (VA)
I Handle bars (HB)
2 Valve (VV)
2 Valve housing (VH)
Lead Time (weeks) Quantity / parent part
1 1
2 1
1 1
1 2
1 1
1 1
MRP CALCULATIONS FOR FIRE
EXTINGUISHER
EFFECTIVENESS OF OPERATION
PLANNING & CONTROL
• Three specific areas in which effectiveness is measured
– Delivery – on time & delayed deliveries
– Inventory levels – value of inventory held, obsolete
inventory, surplus inventory
– Comparison of planned & actual production
RESOURCE PLANNING
• Planning and maintaining the resources that are required for
manufacturing process
• The main objective is to ensure that the materials are available and
in accordance to plan the production systems.
• Resource planning systems can be classified as follows,
– Material Requirements Planning (MRP)
– Manufacturing Resource Planning (MRPII)
– Enterprise Resource Planning (ERP)