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Production Planning and Control

The production control process functions as a system to effectively use limited resources to produce goods that satisfy customer demands and generate profits. It involves forecasting demand, aggregate planning to establish production levels, workforce and capacity planning, material requirements planning, sequencing and scheduling to plan work releases, and shop floor control to coordinate work flow. The overall goal is to coordinate these interrelated activities to optimize objectives like throughput, costs, quality and customer service.

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Abhinit Verma
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58 views

Production Planning and Control

The production control process functions as a system to effectively use limited resources to produce goods that satisfy customer demands and generate profits. It involves forecasting demand, aggregate planning to establish production levels, workforce and capacity planning, material requirements planning, sequencing and scheduling to plan work releases, and shop floor control to coordinate work flow. The overall goal is to coordinate these interrelated activities to optimize objectives like throughput, costs, quality and customer service.

Uploaded by

Abhinit Verma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Production Planning and Control

Summary
The production control activity is a chain of interrelated
events that functions as a system. The decisions are made
for different horizons in time and with different degrees of
accuracy. Yet they must all occur if the ultimate objective
is to be met: that is, to use limited resources effectively to
produce goods that satisfy customer demands and create a
profit for investors.

Production Objectives
High
Profitability
Low
Costs

High
Sales

Low Unit
Costs
High
Throughput

High
Utilization

Less
Variability

Quality
Product
Low
Inventory

Short
Cycle Times

High Customer
Service
Fast
Response

Low
Utilization

Many
products

High
Inventory

More
Variability

Performance Measures
Throughput
WIP
Cycle time
Service quality
Profit

Forecasting
Objective: predict demand for planning purposes.
Laws of Forecasting:
1. Forecasts are always wrong!
2. Forecasts always change!
3. The further into the future, the less reliable the
forecast will be!
Forecasting Tools:
Qualitative: Delphi, Analogies
Quantitative: Causal and time series models

Aggregate Planning
Objective: generate a long-term production plan that
establishes a rough product mix, anticipates bottlenecks,
and is consistent with capacity and workforce plans.
Issues:
Aggregation: product families and time periods must be
set appropriately for the environment.
Coordination: AP is the link between the high level
functions of forecasting/capacity planning and
intermediate level functions of MRP, inventory control,
and scheduling.
Anticipating Execution: AP is virtually always done
deterministically, while production is carried out in a
stochastic environment.

Workforce Planning
How much and what kind of labor is needed to support
production goals?
Issues:
Basic Staffing Calculations: standard labor hours
adjusted for worker availability.
Working Environment: stability, morale,
learning.
Flexibility/Agility: ability of workforce to
support plant's ability to respond to short
and long term shifts.
Quality: procedures are only as good
as the people who carry them out.

Capacity/Facility Planning

How much and what kind of physical equipment is


needed to support production goals?
Issues:
Basic Capacity Calculations: stand-alone capacities
and congestion effects (e.g., blocking)
Capacity Strategy: lead or follow demand
Make-or-Buy: vendoring, long-term identity
Flexibility: with regard to product, volume, mix
Speed: scalability, learning curves

Demand Management
Objective: establish an interface between the customer
and the plant floor, that supports both competitive
customer service and workable production schedules.
Issues:
Customer Lead Times: shorter is more competitive.
Customer Service: on-time delivery.
Batching: grouping like product families can reduce
lost capacity due to setups.
Interface with Scheduling: customer due dates are are
an enormously important control in the overall
scheduling process.

Material Requirement Planning


Objective: Determine all purchase and production
components needed to satisfy the
aggregate/disaggregate plan.
Issues:
Bill of Materials: Determines components, quantities
and lead times.
Inventory Management: Must be coordinated with
inventory.

Sequencing and Scheduling


Objective: develop a plan to guide the release of work
into the system and coordination with needed resources
(e.g., machines, staffing, materials).

Methods:
Sequencing:
Gives order of releases but not times.
Scheduling:
Gives detailed release times.

Shop Floor Control


Objective: control flow of work through plant and
coordinate with other activities (e.g., quality control,
preventive maintenance, etc.)
Issues:
Customization: SFC is often the most highly
customized activity in a plant.
Information Collection: SFC represents the interface
with the actual production processes and is therefore a
good place to collect data.
Simplicity: departures from simple mechanisms must
be carefully justified.

PPC
Assignment
Take any tangible product
Find and Study PPC process of it.

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