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Production Planning & Control - PPC

This document discusses production planning and control (PPC) and material management. It outlines the objectives of PPC as optimizing capacity utilization, inventory control, production time, quality, and cost. The key steps of the PPC process are planning, routing, scheduling, loading, production control, dispatching, follow up, inspection, and corrective measures. Material management aims to minimize material costs through activities like materials planning, purchasing, stores management, and inventory control. The overall goal is to have the right materials available at the lowest possible price while meeting quality standards.

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Bishnu S. Mukherjee
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349 views

Production Planning & Control - PPC

This document discusses production planning and control (PPC) and material management. It outlines the objectives of PPC as optimizing capacity utilization, inventory control, production time, quality, and cost. The key steps of the PPC process are planning, routing, scheduling, loading, production control, dispatching, follow up, inspection, and corrective measures. Material management aims to minimize material costs through activities like materials planning, purchasing, stores management, and inventory control. The overall goal is to have the right materials available at the lowest possible price while meeting quality standards.

Uploaded by

Bishnu S. Mukherjee
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 34

Production Planning

& Control(PPC) and


Material
Management

Abu Bashar

Introduction

Planned production is an important feature of

the small industry.


Planning and control involve generally the
organization and planning of manufacturing
process.
The ultimate objective is the organization of
the supply and movement of materials and
labour, machines utilization and related
activities, in order to bring about the desired
manufacturing results in terms of quality,
quantity, time and place.

Objective of PPC
Optimum Utilization of Capacity
Inventory control
Economy in production time
Ensure quality
To sum up we may say that PPC is of immense

value to the entrepreneur in capacity utilization


and inventory control.
More importantly it improves his response time
and quality. As such effective PPC contributes to
time,
quality
and
cost
parameters
of
entrepreneurial success.

Process of PPC

Planning
Production planning may be defined as the

technique of foreseeing every step in a long


series of separate operations, each step to be
taken at the right time and in the right place
and each operation to be performed in
maximum efficiency.
It helps entrepreneur to work out the quantity
of material manpower, machine and money
requires for producing predetermined level of
output in given period of time.

Routing
Under

this, the operations, their path and sequence are


established.
To perform these operations the proper class of machines and
personnel required are also worked out. The main aim of
routing is to determine the best and cheapest sequence of
operations and to ensure that this sequence is strictly followed.
Routing procedure involves following different activities.
An analysis of the article to determine what to make and what
to buy.
To determine the quality and type of material
Determining the manufacturing operations and their sequence.
A determination of lot sizes
Determination of scrap factors
An analysis of cost of the article
Organization of production control forms.

Scheduling
It means working out of time that should be required to

perform each operation and also the time necessary to


perform the entire series as routed, making allowances for all
factors concerned.
It mainly concerns with time element and priorities of a job.
The pattern of scheduling differs from one job to another
Production schedule: The main aim is to schedule that amount
of work which can easily be handled by plant and equipment
without interference.
Its not independent decision as it takes into account following
factors.
(1) Physical plant facilities of the type required to process the
material being scheduled.
(2) Personnel who possess the desired skills and experience to
operate the equipment and perform the type of work involved.
(3) Necessary materials and purchased parts.

Loading
The next step is the execution of the schedule

plan as per the route chalked out it includes the


assignment of the work to the operators at their
machines or work places.
So loading determines who will do the work as
routing determines where and scheduling
determines when it shall be done.

Production control
Production control is the process of planning

production
in
advance
of
operations,
establishing the exact route of each individual
item part or assembly, setting, starting and
finishing for each important item, assembly or
the finishing production and releasing the
necessary orders as well as initiating the
necessary follow-up to have the smooth
function of the enterprise.

Dispatching
Dispatching involves issue of production orders

for starting the operations. Necessary authority


and conformation is given for:
Movement of materials to different workstations.
Movement of tools and fixtures necessary for
each operation.
Beginning of work on each operation.
Recording of time and cost involved in each
operation.
Movement of work from one operation to
another in accordance with the route sheet.
Inspecting or supervision of work

Follow up

Every

production
programme
involves
determination of the progress of work,
removing bottlenecks in the flow of work and
ensuring that the productive operations are
taking place in accordance with the plans.
It spots delays or deviations from the
production plans. It helps to reveal detects in
routing and scheduling, misunderstanding of
orders and instruction, under loading or
overloading of work etc.
All problems or deviations are investigated and
remedial measurer are undertaken to ensure
the completion of work by the planned date.

Inspection

This is mainly to ensure the quality of goods.

It can be required as effective agency of


production control.

Corrective measures
Corrective

action may involve any of those

activities of
adjusting the route,
rescheduling of work
changing the workloads,
repairs and
maintenance of machinery or equipment,
control over inventories of the cause of deviation
is the poor performance of the employees.
Certain
personnel decisions like training,
transfer, demotion etc. may have to be taken.
Alternate methods may be suggested to handle
peak loads.

Material Management
We can define Materials Management as the

function responsible for the coordination of


planning, sourcing, purchasing, moving,
storing and controlling materials in an
optimum manner so as to provide a predecided service to the customer at a minimum
cost.
Planning and controlling the flow of materials
Objectives:
Maximize the use of the firms resources
Provide the required level of customer service

SCOPE OF MATERIALS MANAGEMENT


Materials Management strives to ensure that the

material cost component of the total product cost be


the least. In order to achieve this, the control is
exercised in the following fields.
1. Materials Planning.
2. Purchasing.
3. Store Keeping.
4. Inventory Control.
5. Receiving, Inspection and Dispatching.
6. Value Analysis, Standardization and Variety
Reduction.
7. Materials Handling & Traffic.
8.
Disposal of Scrap and Surplus, Material
Preservation.

The function of material planning department

is to plan for the future procurement of all the


required materials as per the production
schedule.
At the time of material planning, the budget
allocated for the materials will also be
critically reviewed, for better control.

Objectives
However,

within the broader management


objectives of any industry or business,
Materials Managements contribution towards
objectives may be divided into two categories:
1) Primary and
2) Secondary
The former contributes directly to the
Materials Management function and the latter,
helps other departments to achieve their
objectives.

Objective of material management


Primary
Right price
High turnover
Low procurement & storage
cost
Continuity of supply
Consistency in quality
Good supplier relations
Development of personnel
Good information system

Secondary
Forecasting
Inter-departmental harmony
Product improvement
Standardization
Make or buy decision
New materials & products

Four basic needs of Material


management
1. To have adequate materials on hand when needed
2. To pay the lowest possible prices, consistent with quality
and value requirement for purchases materials
3. To minimize the inventory investment
4. To operate efficiently

Basic principles of material


management
1.Effective management & supervision
.It depends on managerial functions of
.. Planning
.. Organizing
.. Staffing
.. Directing
.. Controlling
.. Reporting
.. Budgeting
.2.

Sound purchasing methods


.3.Skillful & hard poised negotiations
.4.Effective purchase system
.5.Should be simple
.6.Must not increase other costs
.7.Simple inventory control programme

Functional areas of material


management
1. Purchasing
2. Central service supply
3. Central stores
4. The print shops
5. The pharmacy
6. Dietary

Purchasing
After material planning, purchasing is to be done.

Purchasing department buys material based on the


purchase requisitions from user departments and
stores departments and annual production plan.
There are four basic purchasing activities.
a) Selecting suppliers, negotiating and issuing
purchase orders.
b) Expediting delivery from suppliers.
c) Acting as liaison between suppliers and other
company departments.
d) Looking for new products, materials, and
suppliers that can contribute to company
objectives.

Points to remember while purchasing


. Proper specification
. Invite quotations from reputed firms
. Comparison of offers based on basic price, freight &

insurance, taxes and levies


. Quantity & payment discounts
. Payment terms
. Delivery period, guarantee
. Vendor reputation
(reliability,

technical

capabilities,

Convenience,

Availability, after-sales service, sales assistance)


. Short listing for better negotiation terms
. Seek order acknowledgement

Purchase Management
Parameters
Purchasing items with right

price.
Purchasing with right quality.
At right time.
Purchasing from right
source(Vendor).
Purchasing items in right
quantity.

Purchase Management
Purchase systems
Pre-purchase system
Requirement Programs.
Selection of Suppliers.
Obtain quotation & later

evaluating.
Making Requisition.

Purchase Management
Purchase systems
Ordering Systems
Once the rates are fixed.

The order is placed with


selected vendors.

Purchase Management
Purchase systems
Post Purchase System
Includes follow up

procedures.
Receipt.
Checking invoices.

Stores Management
Receives raw material, tools, equipments

& other necessary materials & accounts


them.

Preservation of items in good condition for

later use.

Minimization of obsolescence and damage

through handling.

Disposal & efficient handling.

Stores Management
Maintenance of stores record.
Proper location & stocks of Material.
Reconciling the material with book

figures.

Maintains a proper account on issue of

items on demand from shop floor /


production division.

Information reports to support

Stores Management
System
Receipt System

Maintains proper document

about item which are received at


the store.
Details on pending orders
arranged in chronological order
of dates.
Accordingly schedule the labour
force unload items when they
are received at stores.

Stores Management
System
Stocking System

Necessary measures are taken

to check quality, quantity &


weight of the items before
accepted in the store.

Stores Management
System
Issue System

For maintaining accounts of

issues made to internal division


or external divisions.
Helps timely reordering to
replenish stock.
In issuing to external divisions
(sub contract), controls are
formal and adequate enough to
take care of payments and
claims.

Storage
.Store must be of adequate space
.Materials must be stored in an appropriate place
. in a correct way
.Group wise & alphabetical arrangement helps in
.identification & retrieval
.First-in, first-out principle to be followed
.Monitor expiry date
.Follow two bin or double shelf system, to avoid
.Stock outs
.Reserve bin should contain stock that will cover
.lead time and a small safety stock

Thank you Very


Much

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