Production Planning &

Control
And
Aggregate Planning
 Production
Planning & Control
Introduction
Production planning and control is aimed at
achieving the efficient utilization of resources in
any organization through planning, coordination
and control of production activities that
transform the raw material into finished
products. PPC department works with many
industrial engineering techniques for issuing
directives to the production department .
 Objectives
 It is used to establish target and check the

deviations by comparing on some performance

measures.
 Decides the nature and magnitude of different

input factors to produce the output.

 Coordinates different resources of production
system.
 Elimination of bottleneck

 Utilization of inventory in the optimal way

 Forecasting of demand

 To produce in right quantity and quality at right

time
 Scheduling production activities to meet
delivery schedule
 Quality management
Production Planning Process

Production planning is the lifeblood of any

manufacturing company. It involves finding the
delicate balance between satisfying customers and
managing suppliers.
Map the Process
Operations identifies the necessary resources and
procurement finds the best prices. The result is an
effective production plan with three major steps:
 Buy at the lowest price for the best quality,
 Produce the best quality using an optimal level
of manpower
 Sell materials at a higher price than cost.
Look for Value Opportunities

Form a process engineering team to analyze and

create process flow diagrams for all major
processes in the production cycle. Look for
common or redundant processes. Depending on
the type of business, you may want to segment
your product groups. Determine if certain product
groupings are easier to forecast in terms of sales.
 Capacity Planning
This is the process of identifying resources.
Determining capacity is a function of historical
trends and information about production
development cycles. Timing is critical since
bottlenecks can have future effects and require
additional manpower; ie, bottlenecks are not
static. The right system will look for opportunities
to extend both capacity and queue time.
Production Control Process
Step 1: Establish Performance Standards.

Standards are created when objectives are set

during the planning process. Standard is a
guideline established as the basis for
measurement. It is a precise, explicit statement
of expected results from a product, service,
machine, individual, or organizational unit.
Step 2: Measure Actual Performance.

Supervisors collect data to measure actual

performance to determine variation from
standard. Personal observation, statistical
reports, oral reports and written reports can be
used to measure performance. MBWA can be
used. Oral reports allow for fast and extensive
feedback.
Step 3: Compare Measured Performance
against Established Standards.

Comparing results with standards determines

variation. Some variation can be expected in all
activities and the range of variation - the
acceptable variance - has to be established.
Step 4: Take Corrective Action.

The supervisor must find the cause of deviation

from standard. Then, take action to remove or
minimize the cause. The supervisors can opt to
take basic corrective action, which would
determine how and why performance has
deviated and correct the source of the deviation.
Immediate corrective action is more efficient.
 FUNCTIONS OF PPC
1) Routing -- It is a process of deciding the
sequence of operations to be performed during
the production process.

2) Loading -- Once the route has been

established, the work required can be loaded
against the selected machine or workstation.

3) Scheduling -- It determines when an

operation is to be performed, or when work is
to be completed.
4) Combining Functions -- While it is easy to

define “where” as process planning, “how much

work” as loading, and “when as scheduling, in

actual operations these three functions are often

combined and performed concurrently.

5) Dispatching

Authorizing the start of an operation on the shop

floor is the function of dispatching. This function

may be centralized or decentralized.

6) Reporting or Follow – up -- Optimum
operation of the plant is attained only if the
original plan has been carefully prepared to utilize
the manufacturing facilities fully and effectively.

7) Corrective Action -- If there are any

deviations from set standards, corrective action
has to be taken.

8) Re-planning -- It revises routes, loads, and

schedules; a new plan is developed.
Factors Affecting PPC
 Type of Product -- It is the complexity of the

product that is important, not what the product is.

 Type of Manufacturing -- It is the most

influential factor in the control situation. For a

large continuous manufacturing plant, the routing

was included in the planning of the plant layout.

Steps In PPC

The steps in PPC are: 

 Routing

 Scheduling

 Dispatching, and

 Follow–up or expediting
 ROUTING

 It is a process of deciding the sequence of

operations to be performed during the
production process. It determines:

•  What work will be done on a product.

•  Where these operations will be performed.

•  How these operations will be performed.

• In which sequence the job will move in the plant.

Procedure Of Routing
 

(i) Conduct an analysis of the product to determine

the part/components/sub-assemblies, required to

be produced.

(ii) Conduct an analysis to determine the material

needed for the product.

(iii)Determine the required manufacturing

operations and their sequence.

(iv) Determine the lot size to be produced (or

purchased).
(v) Determine the scrap and rejections at each
stage of production.

(vi) Estimate the cost of the product.

(vii) Prepare different forms for production

control.
Scheduling
 Scheduling involves fixing the priorities for
different jobs and deciding the starting and
finishing time of each job. It also includes the
scheduling of different materials, parts,
machines, tools, equipments, inspection, etc.
the main purpose of scheduling is to prepare a
time-table indicating the time and rate of the
production, as indicated by starting and
finishing time of each activity.
  Scheduling activity involves the following charts :

(1) Master Production Schedule (MPS)-- It is

the list of items indicating end products to be
performed.

(2) Machine Loading Chart--it's the

determination of which machine is idle or should
perform certain tasks.

(3) Gantt Chart-- It represents graphically on a

time scale as to when certain operation would be
performed.
Loading
Once the route has been established, the work
required can be loaded against the selected
machine or workstation.
Dispatching
It is "the selecting and sequencing of available
jobs to be run at individual workstations and the
assignment of those jobs to workers.”

It starts with input as route sheet and schedule

chart. It concerns itself with starting the
processes and operation of production. It
triggers the starting of the production activity.
Follow-up Or Expediting Or
Progressing
It is the final stage of PPC. It is used for ensuring
that the work is carried out as per plants and due
dates are met.

The objectives are:

 To arrest the deviations from the loan.

 To integrate different production activities to

meet the production target.
 ACTIVITIES IN FOLLOW-UP
1) Watching progress of production process

2) Identification of delays, disruptions or

discrepancies

3) Physical control of work-in-progress through

checking

4) Expediting corrective measures

5) Assistance in removing problems during

deviations
(6) Coordination with other departments during
operations for contingencies and maintenance,
if required.

(7) Prepare list of material and tools, etc., which

are in short supply.

(8) Report any other production related

problems, which need immediate attention by
outside agencies.
Issues In Production Planning &
Control
•  What to produce

•  How much to produce

•  When to produce

•  What means (resources) are needed in

production

•  How to coordinate different resources of the

system

• How to control the deviations from plan

Aggregate
Planning
Introduction

Aggregate planning is the process of developing,

analyzing, and maintaining a preliminary,
approximate schedule of the overall operations of
an organization. The aggregate plan generally
contains targeted sales forecasts, production
levels, inventory levels, and customer backlogs.
This schedule is intended to satisfy the demand
forecast at a minimum cost.
Objectives of Aggregate Planning
Maximize

 Profits
 Customer service
 Utilization of plant and equipment

Minimize

 Inventory investment
 Changes in production rate
 Changes in workforce levels
 Aggregate Planning Strategies
Active strategy:
 Attempts to handle fluctuations in demand by

focusing on demand management

 Use pricing strategies and/or advertising and
promotion
 Develop counter-cyclical products

 Request customers to backorder or advance-

order
 Do not meet demand
Passive strategy (reactive strategy):
 Attempts to handle fluctuations in demand.

 Vary size work force size by hiring or layoffs

 Vary utilization of labor and equipment.

 Build or draw from inventory

 Subcontract production

 Negotiate cooperative arrangements with other

firms
 Allow backlogs, back orders, and/or stock outs
Mixed strategy:
 Combines elements of both an active strategy

and a passive (reactive) strategy

 Firms will usually use some combination of the

two
Techniques For Aggregate Planning

Techniques for aggregate planning range from

informal trial-and-error approaches, which
usually utilize simple tables or graphs, to more
formalized and advanced mathematical
techniques. General procedure consists of the
following steps:

1) Determine demand for each period.

2) Determine capacity for each period.

3) Identify company, departmental, or union
policies that are pertinent.

4) Determine unit costs for units produced. These

costs typically include the basic production costs.

5) Develop alternative plans and compute the cost

for each.

6) If satisfactory plans emerge, select the one that

best satisfies objectives. Frequently, this is the
plan with the least cost. Otherwise, return to step
5.
Mathematical Approaches To
Aggregate Planning
The following are some of the better known
mathematical techniques that can be used in
more complex aggregate planning applications.

Linear Programming -- It is an optimization

technique that allows the user to find a maximum
profit or revenue or a minimum cost based on the
availability of limited resources and certain
limitations known as constraints.
Mixed-integer Programming -- For aggregate
plans that are prepared on a product family basis,
mixed-integer programming may prove to be
useful.

Linear Decision Rule -- It seeks to minimize total

production costs using a set of cost-approximating
functions to obtain a single quadratic equation.
Then two linear equations can be derived from the
quadratic equation, one to be used to plan the
output for each period and the other for planning
the workforce for each period.
Search Decision Rule -- The search decision rule
methodology overcomes some of the limitations
of the linear cost assumptions of linear
programming. It allows the user to state cost data
inputs in very general terms.

Simulation -- A number of simulation models can

be used for aggregate planning. By developing an
aggregate plan within the environment of a
simulation model, it can be tested under a variety
of conditions to find acceptable plans for
consideration.
Functional Objective Search Approach -- The
functional objective search (FOS) system is a
computerized aggregate planning system that
incorporates a broad range of actual planning
conditions. It is capable of realistic, low-cost
operating schedules that provide options for
attaining different planning goals.
Advantages Of Aggregate Planning
 Cost Reduction

 Basis for Production Plans

 Business Specific

 Service Industry Planning

 Manufacturing Planning

 Analysis and Strategy

Thank You