Production Management BBA IV sem BBA N 403 Unit 1Notes
Production Management
The set of interrelated management activities, which are involved in manufacturing certain products, is called as production management. If the same concept is extended to services management, then the corresponding set of management activities is called as operations management.
In any manufacturing system, the job of a Production Manager is to manage the process of converting inputs into the desired outputs.
Production management is a function of Management, related to planning, coordinating and controlling the resources required for production to produce specified product by specified methods, by optimal utilization of resources.
Functions of production management
1. Production planning
2. Production control
3. Factory building
4. Provision of plant services
5. Plant layout
6. Physical Environment
7. Method study
8. Inventory control
9. Quality control
10. Product department
SCOPE OF PRODUCTION MANAGEMENT
Production Management has the following scopes:
1. Production Planning and Development: It is related to the activity of evolution of new product and design it according to the specification of department in order to satisfy large number of consumers in the market.
2. Production Administration: It deals with basic three activities that is
(A) Production planning,
(B) production engineering,
(C) production control.
All the above functions under production management have its own value and importance. Production management system directly depends on this scope.
3. Implementation Function: It refers to the activity of execution of plan, policies and
decisions. It is a continuous activity in production management system which requires
motivation of employees who are in charge of production so that the things can be produced
in time.
4. Other Allied Activity: These are some of the other activity related to standardization, simplification, specialization, quality control, inventory control, research and development.
BENEFITS OF PRODUCTION MANAGEMENT
Production management is essential and beneficial different parties like:
1. The Consumer
2. The Employee:
3. The Investor
4. The Supplier
5. The Society
RESPONSIBILITY OF A PRODUCTION MANAGER
(a) To meet the demand of the customers in the market in terms of quantity and quality of the
product for a specified time period.
(b) To ensure the exact date and time of delivery of the product of the consumers in the market.
(c) To apply and select most economic method of production process in the organisation in order
to reduce the cost of production.
(d) To ensure the desired quality of the product by taking into liking and disliking of the
customers in the market.
(e) To have a balance between the production process and marketing process of the organisation.
(f) To maintain desirable level of raw material so that the production process will not hamper.
(g) To look into the grievances of the people who are engaged in production process so that
maximum utilisation of man power can be possible.
(h) To look into maximum return on profit for the organisation.
(i) To have maximum productivity in each level of production.
(j) To ensure environmental protection in production of the product.
(k) To look into the rules and regulation of the government.
(l) To maintain good relation with the competitors in the market in terms of quality of the
Production function
Production function is that part of an organization, which is concerned with the ransformation of a range of inputs into the required outputs (products) having the requisite quality level.
Production is defined as “the step-by-step conversion of one form of material into another form through chemical or mechanical process to create or enhance the utility of the product to the user.”
Features of production function
The following are the features of the production function:
1. It involves transformation of raw materials into finished product.
2. The place where production takes place is known as a factory.
3. Production is undertaken in various departments, such as production and service department of a factory.
4. Production may involve more than one process or operation.
5. It can be undertaken either manually or mechanically.
6. It is based on technology which may be either indigenous or imported.
7. Production is undertaken on large scale basis in recent times.
8. Production process involves combination of resources, such as materials, men, money, machinery, management functions of production mgmt?
1. Production planning
2. Production control
3. Factory building
4. Provision of plant services
5. Plant layout
6. Physical Environment
7. Method study
8. Inventory control
9. Quality control
10. Product department
PRODUCTION SYSTEM
Production system deals with functions of input, process, output, demand forecast and
manufacturing control system. Where input refers to utilisation of men, material, machine, money minute and methods. Process refers to manufacturing activity like semi finished product,
product, finished product. Output is the product service which in other means the final product as per specifications. Demand forecast means consumer demand and the change in consumer demand in the market depend on the market competition. Manufacturing control system is the inventory and plant location measures for an effective and in time production system.
Production system is the application of management functions in production process through planning, organising, directing and controlling managerial functions in the process of converting input into desired output in an efficient and effective manner.
Production system includes all those operations by which the input can be converted into output for a desired product or a service. The service may be tangible or intangible it is the system which generates consumer satisfaction. Hence according to some authors production system is otherwise known as operation system so as production management can be referred as operations management.
COMPONENTS OF A PRODUCTION SYSTEM:
There are two components for a production system such as:
1. Facilities – the factory and equipment in the facility and the way the facility is
organized (plant layout)
2. Manufacturing support systems – the set of procedures used by a company to
manage production and to solve technical and logistics problems in ordering materials,
moving work through the factory, and ensuring that products meet quality standards Facilities include the factory, production machines and tooling, material handling equipment, inspection equipment, and computer systems that control the manufacturing operations. For the facilities, plant layout is a significant factor for the production system to be efficient. The plant layout is the way in which the equipment is physically arranged in the factory.
Types of Production Process
There are mainly three types of production systems or production process. They are discussed briefly below:
1. Continuous System
2. Intermittent System
3. Project systems1. Continuous System
Continuous production refers to the manufacturing of large volume of a single or avery few varieties of products with a standard set of processes. The mass production is carried on continuously for stock in anticipation of demand.
Features of the continuous production are given below:
1. The volume of output is generally large.
2. The product design and the operations stages are standardised
3. Special purpose automatic machines are used to perform standardised operations.
4. Product layout is designed according to a separate line for each product.
Merits of continuous production process
The following are the advantage of continuous production system:
1. The main advantage of continuous production system is that work-in-progress inventory is minimal.
2. The quality of output is kept uniform because each stage develops skills of employees through repetition of work.
3. Any delay at any stage is automatically detected.
4. Handling of materials is reduced due to the set pattern of production line
5. Control over materials, cost and output is simplified.
6. The work can be done by semi-skilled workers because of their specialization.
Demerits of continuous production system:
1. Strict maintenance is necessary to avoid production hold ups.
2. Huge capital investment is required.
3. Cannot make sudden changes in the production system.
Types of continuous production system:
1. Mass Production
In this method, a few types of products are manufactured in large quantities. The
volumes are high and products are standardised which allows resources to be organized around particular products. Mass Production is characterised by the following features:
1.tandard products are manufactured.
2. Standardised inputs and standardised operations are used for manufacturing.
3. Large volume of products.
4. Shorter cycle time of production.
5. Less supervision is required.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts are continuous
8. Production planning and control are easy.
Advantages of mass production
Following are the advantages of Mass Production:
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilisation.
3. Less skilled operators can also be employed.
4. Low process inventory.
5. Manufacturing cost per unit is low.
Limitation of mass production
Following are the limitations of Mass Production:
1. Breakdown of one machine will stop entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities is required.
1.2. Process Productions
Production facilities are arranged as per the sequence of production operations from the first operations to the finished product. It involves continuous physical flow of material from one stage to another stage. The process usually operates round the clock to maximise utilisation and to avoid expensive shutdowns and start-ups.
Characteristics of process production
Process Production is characterised by:
1. Material handling is fully automated.
2. Process follows a predetermined sequence of operations.
3. It is used for bulk manufacturing.
4. Planning and scheduling is a routine action.
Advantages
Following are the advantages of process Production:
1. Standardisation of product and process sequence.
2. Higher rate of production with reduced cycle time.
3. Higher capacity utilisation due to line balancing.
4. Manpower is not required for material handling as it is completely automatic.
5. Person with limited skills can be used on the production line.
6. Unit cost is lower due to high volume of production.
Limitations
Following are the limitations of process Production.
1. Flexibility to accommodate and process number of products does not exist.
2. Very high investment for setting flow lines.
2. Intermittent Production System
In this system, the goods are generally produced to fulfill customers‘ orders rather than producing against stock. Intermittent situations are those where the facilities must be flexible enough to handle a variety of products and sizes. The flow of material is intermittent.
The production facilities are flexible enough to handle a wide variety of products and sizes.In the industries following the intermittent production system, some components may be made for inventory but they are combined differently for different customers. The finished product is heterogeneous but within a range of standardized options assembled by the producers. Since production is partly for stock and partly for consumer demand, there are problems to be faced in scheduling, forecasting, control and coordination.
Characteristics intermittent production
The Characteristics intermittent production is given below:
1. The flow of production is intermittent, not continuous.
2. The volume of production is generally small.
3. A wide variety of products are manufactured.
4. General purpose machines and equipment are used.
5. No single sequence of operations is used for a long period.
6. Process layout is most suited in a highly competitive environment.
7. Periodical adjustments are made to suit different jobs or batches.
Types of Intermittent Production
Basically there are two types of intermittent production system. They are as follows:
1. Job Production
In the case of Job production, the products are manufactured as per the specifications of the customers within pre -determined time and cost. The main feature of this method is low volume and high variety of products compared to mass production. Under this method, each job demands unique production activities.
Features of job production
The following are the features of job production system:
1. More variety of products is manufactured as per customer‘srequirements.
2. Volume of production is low.
3. Highly skilled employees are required to do the work.
4. Detailed planning is essential for sequencing the requirements of each product.
5.Employees should be able to take each job as a challenge.
Advantages
Advantages of job production are as follows:
1. It tries to satisfy the unique requirements of customers.
2. Employees will become more skilled, as each job gives them learning opportunities to develop.
3. Full potential of employees can be utilised.
4. Opportunity exists for employees to do creative works.
Limitations
Following are the limitations of Job Production system:
1. Higher cost due to frequent set up changes.
2. It results in higher level of inventory at all levels and also higher inventory cost.
3. Production planning is complicated.
4. Larger space requirement is needed.
2. Batch Production
Under batch production method, items are processed in lots or batches and a new batch is undertaken for production only when the production on all items of a bath is complete. In fact, batch type of production system can be considered as an extension of job type system.
Characteristics of batch production
Batch Production is characterised by
1. Shorter production runs.
2. Products are manufactured in small batches.
3. Plant and machinery set up is used for the production of item in a batch and change of set up is required for processing the next batch.
4. Manufacturing lead-time and cost are lower as compared to job order production.
Advantages
Following are the advantages of Batch Production:
1. Better utilisation of plant and machinery facilities.
2. It promotes functional specialisation.
3. Cost per unit is lower as compared to job order production.
4. Lower investment in plant and machinery is required.
Limitations
Following are the limitations of Batch Production:
1. Material handling is complex because of irregular and longer flows.
2. Production planning and control are complex.
3. Higher set up costs due to frequent changes in set up.
Production planning and control
Production planning and control is concerned with implementing the plans, i.e. the detailed
scheduling of jobs, assigning of workloads to machines (and people), and the actual flow of work through the system. Production is an organized activity of converting raw materials into productiveness. Production planning and control is an important task of Production Manager.
“Production planning and control is the coordination of a series of functions according to a plan which will economically utilize the plant facilities and regulate the orderly
movement of goods through the entire manufacturing cycle, from the procurement of all materials to the shipping of finished goods at a predetermined rate.”
Characteristics of Production Planning and Control
The forgoing discussion brings out the following characteristics of production planning and
control:
1. It is the planning and control of manufacturing process in an enterprise. The questions like—
what is to be manufactured? When it is to be manufactured? How to keep the schedule of
production etc.? —are decided and acted upon for getting good results.
2. All types of inputs like materials, men, machines are efficiently used for maintaining
efficiency of the manufacturing process.
3. Various factors of production are integrated to use them efficiently and economically.
4. The manufacturing process is organized in such a way that none of the work centre is either overworked or under worked. The division of work is undertaken very carefully so that every available element is properly utilized.
5. The work is regulated from the first stage of procuring raw materials to the stage of finished
goods.
2 OBJECTIVES OF PRODUCTION PLANNING AND CONTROL
Planning of production precedes control. Whatever is planned needs to be controlled. The ultimate
objective of both planning and control is to use various inputs in an efficient way.
The following points will bring out the objectives of production planning and production control:
Production Planning
1. Making most economical use of various inputs.
2. To determine the requirements for men, materials and machines.
3. Production of various inputs at a right time and in right quantity and of right quality.
4. Arranging production schedules according to the needs of marketing department.
5. Providing for adequate stocks to meet contingencies.
6. Keeping up-to-date information processes.
Production Control
1. Making efforts to adhere to the production schedules.
2. Issuing necessary instructions to the staff for making the plans effective.
3. To ensure that goods produced according to the prescribed standards and quality norms.
4. To ensure that various inputs are made available in right quantity and at proper time.
5. To ensure that work progresses according to the predefined plans.
2.3 STAGES OF PRODUCTION PLANNING AND CONTROL
The stages of Production planning and control has three phases namely as follows:
1. Planning Phase
2. Action Phase
3. Control Phase
Planning Phase
Planning is an exercise of intelligent anticipation in order to establish how an objective can be
achieved or a need fulfilled in restrictive circumstances. It has two categories of planning namely
1. Prior planning
2. Active planning.
Prior Planning
Prior planning means pre-production planning. This includes all the planning efforts, which are
taking place prior to the active planning.
Modules
The modules of prior planning are as follows:
1. Product development and design is the process of developing a new product with all the
features, which are essential for effective use in the field, and designing it accordingly. At the
design stage, one has to take several aspects of design like, design for selling, design for
manufacturing and design for usage.
2. Forecasting is an estimate of demand, which will happen in future. Since, it is only an
estimate based on the past demand, proper care must be taken while estimating it. Given the
sales forecast, the factory capacity, the aggregate inventory levels and size of the work force,
the manager must decide at what rate of production to operate the plant over an intermediate
planning horizon.
3. Aggregate planning aims to find out a product wise planning over the intermediate planning
horizon.
4. Material requirement planning is a technique for determining the quantity and timing for the
acquisition of dependent items needed to satisfy the master production schedule.
Active Planning
The modules of active planning are: Process planning and routing, Materials planning. Tools
planning, Loading, Scheduling etc.
1. Process planning and routing is a complete determination of the specific technological process
steps and their sequence to produce products at the desired quality, quantity and cost. It
determines the method of manufacturing a product selects the tools and equipments, analyses
how the manufacturing of the product will fit into the facilities. Routing in particular prescribes the flow of work in the plant and it is related to the considerations of layout, Notes
temporary locations for raw materials and components and materials handling systems.
2. A material planning is a process which determines the requirements of various raw
materials/subassemblies by considering the trade-off between various cost components like,
carrying cost, ordering cost, shortage cost, and so forth.
3. Tools’ planning determines the requirements of various tools by taking process specification
(surface finish, length of the job, overall depth of cut etc.), material specifications (type of
material used, hardness of the material, shape and size of the material etc.) and equipment
specifications (speed range, feed range, depth of cut range etc.).
4. Loading is the process of assigning jobs to several machines such that there is a load balance among the machines. This is relatively a complex task, which can be managed with the help of efficient heuristic procedures.
5. Scheduling is the time phase of loading and determines when and in what sequence the work
will be carried out. This fixes the starting as well as the finishing time for each job.
Action--Phase
Action phase has the major step of dispatching. Dispatching is the transition from planning phase to action phase. In this phase, the worker is ordered to start manufacturing the product. The tasks which are included in dispatching are job order, store issue order, tool order, time ticket, inspection order, move order etc.
The job order number is the key item which is to be mentioned in all other reports/orders. Stores issue order gives instruction to stores to issue materials for manufacturing the product as per product specifications. As per tooling requirements for manufacturing the product, the tool Order instruct the tool room to issue necessary tools. Time ticket is nothing but a card which is designed to note down the actual time taken at various processes. This information is used for deciding the costs for future jobs of similar nature and also for performing variance analysis.
Control Phase
The control phase has the following two major modules:
1. Progress Reporting: In progress reporting, the data regarding what is happening with the jobnis collected. Also, it helps to make comparison with the present level of performance. The
various data pertaining to materials rejection, process variations, equipment failures, operator
efficiency, operator absenteeism, tool life, etc., are collected and analyzed for the purpose of
progress reporting.
2. Corrective Action: The tasks under corrective action primarily make provisions for an
unexpected event. Some examples of corrective actions are creating schedule flexibility,
schedule modifications, capacity modifications, make or buy decisions, expediting the work,
pre-planning, and so on. Due to unforeseen reasons such as, machine breakdown, labour
absenteeism, too much rejection due to poor material quality etc., it may not be possible to
realize the schedule as per the plan. Under such condition, it is better to reschedule the whole
product mix so that we get a clear picture of the situation to progress further
FUNCTIONS/SCOPE OF PRODUCTION PLANNING & CONTROL
The following points explains the scope of Production Planning and Control
1. Materials: Materials should be made available at the right quality, right quantity, right price
& right price. Inventory control & regular supply of materials should be guaranteed.
2. Manpower: It is important to carry out manpower planning to maintain operational &
managerial staff possessing requisite skills & expertise.
3. Methods: It is always desirable to consider all the available alternatives & select the best
method of processing.
4. Machines & equipments: The choices of manufacturing methods depend on available
production facilities & utilization of plant, machines equipments.
5. Routing: The routing function specifies what work is to be done where & when it is to be
performed.
6. Estimating: it involves establishing performance standard of each work after duly analyzing
operation sheets. These sheets indicate feeds, speeds, depth of cuts, use of special attachments
& methods.
7. Loading & scheduling: Loading & scheduling machines have to be made as per the
production requirements. Machine loading generates accurate information on work standard,
scrap allowances, machine-time requirements & machine capacities. Scheduling is a timetable
for performing the job on the available machines so that delivery dates are maintained.
8. Dispatching: Dispatching is the release of orders & instructions to start production as per the
route sheets & schedule charts.
9. Expediting: It refers to follow-up which is done after the dispatching function.
10. Inspection: It is related to maintenance of quality in production & processes, methods labour
so that improvements can be made to achieve the quality standards.
11. Evaluating: It provides a feedback mechanism on a long term basis so that past experience
can be used to improve upon use of methods, facilities & resources in future period.
12. Cost control: In manufacturing products, costs can be kept within control through wastage
reduction, value analysis, inventory control & efficient use of resources.
5 CHALLENGES IN PRODUCTION PLANNING AND CONTROL
The following points explains Challenges in Production Planning and Control
(a) Combining Functions: It is desirable that a minimum changes be made after schedules are
established. This objective can be approached if the amount of work scheduled for the factory
or department is equal or slightly greater than the production cycle.
(b) Follow-up: When jobs are started and completed on schedule, there should be very little
concern about the meeting of commitments. Optimum operation of the plant is attained only if
the original plan has been carefully prepared to utilize the manufacturing facilities fully and
effectively.
(c) Re-planning: Often required in manufacturing. Changes in market conditions, manufacturing
methods, etc. affecting the plant will often indicate that a new manufacturing plan is required.
6 FACTORS AFFECTING PRODUCTION PLANNING AND CONTROL
The following points explains Factors Affecting Production Planning and Control
1. Market Forecast: It will indicate future trends in demand for manufactured products. Work
shift policies, plans for an increase or decrease in manufacturing activity are based upon the
market forecast and in turn affect the production planning and control.
2. Sales Order: It is a rewrite of the customer order specifying what has been purchased
(product, quantity and authorizing shipment of the goods to the customer). Variation or
changes in sales order will drastically affect production planning and control.
3. Standard Process Sheet: It is prepared by process engineering group or process owner and it is the source of basic data which may include type of machine to be used, time required for processing, etc. For e.g. if any machine is under breakdown, the standard process sheet will be disturbed which in turn affect production planning and control.
4. Load Charts: These charts are prepared for each workstation or machine in the plant or may be for groups of machines or departments.
5. Project Planning Method: The product to be produced are manufactured in quantities and
their total processing time can be measured. The best known methods are Critical Path
Method (CPM) and Program Evaluation and Review Technique (PERT).
steps in Production Planning and Control
1. Planning
2. Routing
3. Scheduling
4. Dispatching
5. Expediting
1. Planning
Production plansdetermine what will be produced and where, at what type, by whom, and how. For detailed planning of operations, the relevant information may be obtained from several sources in the enterprise. Information about quantity and quality of products to be manufactured may be obtained from customers‟ orders and the sales budget, and information about production facilities may be obtained from the management and the engineering department.
2. Routing
The next important function of production planning and control is routing which involves the determination of the path (i.e. route) of movement of raw materials through various machines and operations in the factory. “Routing”,, “includes the planning of where and by whom work shall be done, the determination of the path that work shall follow, and the necessary sequence of operations”.
The most efficient routing may have to be compromised with the availability of the machines at a particular time. In other words, “routing establishes the operations, their path and sequence, and the proper class of machines and personnel required for these operations.”
3. Scheduling
Scheduling is planning the time element of production – i.e. prior determination of “when work is to be done”. It consists of the starting and completion times for the various operations to be performed. In other words, scheduling function determines when an operation is to be performed, or when work is to be completed, the difference lies in the details of the scheduling procedure.
Schedules are of two types: Master schedule and Detailed schedule. Activities, if recorded on plant-wise basis, would be preparing master schedule, while mere detailed schedules are employed to plan the manufacturing and assembly operations required for each product.
4. Dispatching
Dispatching is the part of production control that translates the paper – work into actual production. It is the group that coordinates and translates planning into actual production. dispatching function proceeds in accordance with the details worked out under routing and scheduling functions.
These orders contain the following information:
The name of the product;
The name of the part to be produced, sub-assembly or final assembly;
The order number;
The quantity to be produced;
Descriptions and numbers of the operations required and their sequence,
The departments involved in each operation
5. Expediting
The aim is to ensure that what is intended and planned is being implemented.
“Expediting consists in reporting production data and investigating variances from predetermined time schedules. The main idea behind expedition is to see that promise is backed up by performance”. It includes the following functions:
(i) Check-up to ensure that all materials, tools, component parts, and
accessories are available at all work centres in specified quantities for starting and carrying out manufacturing operations.
(ii) Check-up on the status of work-in-progress and completed work at various work stations.
(iii) Preparation of progress records and keeping the control boards
up-to-date.
(iv) Reporting to manufacturing management on all significant deviations so that corrective action may be taken.
REQUIREMENTS OF AN EFFICIENT SYSTEM OF PRODUCTION PLANNING AND CONTROL
The scheme of production planning and control system will require reliable information about productive capacities and production standards, a sound organizational structure, and trained and competent personnel, for it successful operations. These requirements are enumerated below:
1. Reliable information about productive capacity and production standards:
a. Complete knowledge of products be manufactured
b. Detailed information about the number and types of each machine
and processing unit together with the complete data on power,
speeds, and feeds of all machines.
c. Full information relating to production materials which are to be
used.
d. Accurate knowledge of job analysis – particulars as to the work to
be performed, and the type of skill required.
ADVANTAGES OF PRODUCTION PLANNING AND CONTROL
1. Efficient Service to Customers: The greatest advantage of a proper system of production planning and control is that it renders prompt and economical service to customers.
2. Lower Investment: Proper production planning and control holds investment to the minimum necessary level by avoiding unnecessary stock inventories and machines.
3. Reduced Costs: Good production planning and control means minimum waste of materials and labour efforts, avoidance of idle machine time, and fewer production interruptions
4. Higher Morale of Workers: Good production planning and control system avoids rush orders, maintaining an even flow of work, and providing congenial working conditions.
5. Better Public Relations: A well-planned and well-controlled production system not only reduces investment and costs for the enterprise, but also improves its image with the outside public.
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