UNIT - 1

INTRODUCTION OF
PRODUCTION PLANNING AND
CONTROL
INTRODUCTION TO PPC
• Production system is basically a conversion system where
the raw materials are converted into useful or marketable
products.
• It is created to accomplish specific objectives.
• It consists of numerous sub-components or sub-systems,
all of which interact in pursuing the objectives.
• The efficiency of production system is stated in terms of
its ability to produce the products with required quantity
and specified quality at predetermined cost and
predetermined time.
• Production planning and control can be viewed as the
nervous system of the production system, to achieve the
stated objectives.
• Production planning and control (PPC) is aimed at achieving the
efficient utilisation of resources (material, men, facility, etc) in the
manufacturing organisation through planning, coordinating and
control of production activities that transform the raw material into
finished products in a most optimal manner.
• PPC department (works with many industrial engineering techniques)
issues directives to production department of (i) what to
produce, (ii) how many to produce, (iii) when to produce, (iv) what
means (resources) are required for production. (v) how to coordinate
different resources of the system, and (vi) how to control the
deviation from the set plan.
• Definition: PPC may be defined as the direction and coordination
of the organisation's materials and physical facilities towards the
attainment of pre-specified goals in the most efficient way.
• As its name suggests, PPC consists of two major activities -
production planning and production control.
Objectives of PPC:
1. To design a productive system to meet due date
consistent with minimum cost and quality standard.
2 To systematically plan the production activities to
achieve the high production efficiency.
3. To decide the nature and magnitude of different input
factors to produce the output.
4 To ensure maximum utilization of all resources.
5 To ensure production of quality products.
6.To coordinate the different resources such as labour,
machines, equipment, effectively and economically.
7.To minimise the product through-put time
8.To maintain optimum inventory levels.
9.To maintain flexibility in manufacturing operations.
10.To coordinate production activities of various
departments.
11.To plan for plant capacities for future requirements.
12.To establish targets and checking them against
performance.
13.To ensure smooth flow of materials eliminating
bottlenecks,if any,in production.
14.To ensure effective cost reduction and cost control.
Factors Determining the Nature of PPC Operations in a
Manufacturing System:
• The interdependence of various activities/operations
involved in the transformation process. For example,
mutual dependence of processes makes a system more
complex.
• The number of operations, parts and sub-assemblies
required to get the final product.
• The nature and magnitude of variation in the capacity of
different kinds of machines and equipment
• The size of orders and the production run. For example, a
large number of orders in smaller lots make the system
more complex.
• The nature of the manufacturing systems.
 PRODUCTION PLANNING
What is Production Planning?
• Production planning involves management decision
relating to how much to produce; what materials,
parts and tools will be required what steps should
be completed; and, how much work is to be done
by each workstation.
• Production planning is a pre-production activity. It
is the pre- determination of manufacturing
requirements such as manpower, materials,
machines, and manufacturing process.
• Definition: According to Ray Wild, production
planning is defined as the determination
acquisition and arrangement of all facilities
necessary for future production of products.
• According to Mikell P. Groover, producion
planning is concerned with:
(i) deciding which products to make, how many
of each, and when they should be completed;
(ii) scheduling the production and delivery of the
parts and products;, and
(iii) planning the manpower and equipment
resources needed to accomplish the production plan.
Objectives of Production Planning:
1. To predetermine liom sales forecasts and
engineering information, the kind of materials,
machines, tools, building, methods and labour
necessary in the proper quantities and qualities,
when and as required, to produce the desired
goods in the most economical manner,
2.To make all preparations for manufacturing
necessary to reach the production goals established
in the production budget and master schedule and
by the fluctuating demand of the customers.
Levels of Production Planning:
Production planning can be done at three levels:
• Factory planning.
• Process planning, and
• Operation planning
1. Factory planning: At this level of planning,
the sequence of work tasks is planned in terms of
building, machines and equipment required for
manufacturing the desired goods and services.
This stage deals with plant location and layout.
2. Process planning: At this level of planning, the
many operations involved in factory plannings
are located and the sequence of these operations
in the production process is determined.
3.Operation planning: At this level of planning
the details of the methods required to perform
each operation (such as selection of work centres
and designing of tools required for various
operations) and the sequence of work elements
involved in each operation are planned.
Factors Determining Production Planning The
production planning procedures used varies from
company to
company.
Three important factors determining production
planning procedures are:

1. Volume of production,

2. Nature of production processes, and

3. Nature of operations.
 PRODUCTION CONTROL
What is Production Control?
• Production control through control mechanism, tries to take
corrective action to match the planned and actual production Thus
production control reviews the progress of the work, and takes
corrective steps in order to ensure that programmed production
takes place.
• The production control involves implementation of production
plans by coordinating different activities. It seeks to ensure that
production operations and actual performance occur according to
planned operations and performance.
The three essential steps in control process are:
1.Initiating the production.
2. Progressing.
3. Corrective action based upon the feedback and reporting back to
the production planning.
Objectives of Production Control:
The main objectives of the production control are as
follows:
1. To implement the production plans into effect by
issuing the necessary orders to the right persons
through the proper channels.
2. To coordinate, monitor and feed-back to production
management, the results of the production activities,
analyzing and interpreting their corrective action if
necessary.
3. To provide for optimum utilisation of all resources.
4.To achieve the broad objectives of low cost of
producin and reliable customer service.
Scope of Production Control
Within the broad perspective of the production control the
following functions are covered;
1. Control of planning
2.Control of materials,
3.Control of tooling
4.Control of manufacturing capacity
5.Control of activities
6.Control of quantity.
7.Control of material handling.
8. Control of due dates,
9.Control of information, and
10. Control of quality.
Factors Determining the Production Control
The production control functions vary from
organisation to organisation. However, the
following three factors generally determine the
production control procedure in an organisation:
• Nature of production,
• Complexity of operations, and
• Magnitude of operations.
Relationship Between Production Planning
and Production Control:
FUNCTIONS OF PRODUCTION
PLANNING AND CONTROL
• As already discussed, production planning and
control function essentially consist of
(i) production planning in a manufacturing
organisation before actual production activities
start, and
(ii) exercising control activities to ensure that the
planned production is realised in terms of
quantity, quality, delivery schedule, and the cost
of production
Phases of Production Planning and Control
PPC involves three
1. Pre-planning phase.
2. Planning phase, and
3. Control phase.
1. Pre-planning Phase
 Pre-planning is a macro-level planning, and deals with analysis of data and is an outline
of the basic planning policy based on forecasted demand, market analysis, and product
design and development.
 Pre-planning is concerned with decision making and data collection on the '4 M's ie, on
materials, methods, machines, and manpower, mainly with respect to availability, scope,
and capacity.
Pre-planning is related to:
(i) product development and design,
(ii) process design.
(iii)work-station design
(iv) Sales forecasting
(v) estimating.
(vi) Factory layout and location
(vii) equipment policy, and
(viii) pre-planning production
2. Planning Phase
 During this phase, a thorough analysis of the '4 M's is
undertaken to select the appropriate materials, methods and
facilities by means of which the work can be accomplished.
 This analysis is followed by process planning (routing),
estimating, and scheduling.
 The more detailed, realistic, and precise the planning, the
greater conformity to schedules achieved during production,
and subsequently the greater the efficiency of the plant.
 The two aspects of planning: (i) short-term planning (for
near future) and (1) long-term planning (for distant future),
are considered during this phase.
 Also due attention are given to standardisation and
simplification aspects of products, materials, and methods.
3. Control Phase
 The final phase of PPC is the control phase. This stage
involves dispatching, inspection, expediting and
evaluation.
 Control of inventories, control of scrap, analysis of
work-in- process, and control of transportation are
essential links of this phase.
 The control phase provides the main sources of
feedback information to ensure necessary corrective
actions. Therefore effective communication systems are
prerequisites to efficient control of production control.
 Finally, evaluation takes place to complete the
production planning and control cycle.
Functions of PPC:
1. Materials Planning
 For efficient production planning system, raw
materials, standard parts and semi-finished
products and assemblies must be available at
the required time and place.
 This materials planning function also covers
fixation of materials standard, batch quantities,
delivery dates, standardisation and reduction
of varieties, procurement of parts and raw
materials and inspection of materials and
finished parts.
2. Methods Planning
 The methods planning function identifies the alternate methods
of manufacturing, evaluates them and selects the best method
compatible with a given set of circumstances and facilities.
 This function also covers both the general study and selection
of production process which in turn requires a series of
decision making encompassing the theoretical feasibility of
manufacturing the parts.
3. Machines and Equipment (Facility Planning)
 The facility planning function is concerned with procurement
of machines and equipments and specification of standard
tools. design and manufacture of special tools ie., jigs and
fixtures, etc
 Thus this function is mainly concerned with the detailed
analysis of available production facilities, equipment down
time,maintenance policy procedure and schedules.
4. Process Planning (Routing)
 Process planning, also known as routing, is the process of
determining the sequence of operations to be performed in
the production process.
 The routing function determines:
what work (operations) will be done on a product?;
where (on which machine/department) these operations will
be performed?);
how these operations will be performed; and
in which sequence the job (from raw materials stage to
finished goods stage) will move in the plant?
 The routing information is usually provided by product or
process engineering function and it is regarded as a
fundamental production function on which all subsequent
planning is based.
 Route sheet: A route sheet is a document, providing
information and instructions for converting the raw
materials into finished parts or products. It defines
each step of the production operation and lays down
the precise path or route through which the product
will flow during the conversion process.
Thus the main activities of routing are:
 To fix the path of travel giving due consideration to
layout.
 To break down the operations into elements so as to
define each operations in detail.
 To decide the setup time and processing time for
each operation.
5. Estimating:
 Once the production orders, the overall methods and
the detailed route sheets are available, then the next
activity is to estimate the operations time for each
operations.
 This function involves the extensive use of operation
analysis in conjunction with methods and routing as
well as work measurement in order to set up
performance standards.
6. Scheduling and Loading:
 Scheduling and loading is the assignment of work to a
facility with the specification of time and sequence of
operations.
 Scheduling is time phasing of loading.
(i) Scheduling:
• Scheduling involves fixing priorities for each job and
determining the starting time and finishing time for
each operation, the starting dates and finishing dates
for each part, sub-assembly and final assembly.
• Scheduling lays down a time table for production,
indicating the total time required for the manufacture
of a product and also the time required for carrying
out the operation for each part on each machine or
equipment.
• Scheduling devices: Three important scheduling
techniques are: (i) Gantt charts, (ii) CPM and PERT
techniques, and (iii) the run out approach.
(ii) Loading:
• Loading, also known as machine loading, is the process of assigning
specific jobs to machines, men or work centres based on relative
priorities and capacity utilisation.
• Loading ensures maximum possible utilisation of productive facilities
and avoids bottlenecks in production. It is important to avoid both
over-loading and under-loading the facilities, so as to ensure maximum
utilisation of resources.
 Loading devices: The machine loading charts such as Gantt
7. Dispatching
• Dispatching is the execution phase of planning.
• Dispatching is the routine of setting production
activities in motion through the release of orders
(work order, shop order) and instructions in
accordance with the previously planned time
schedules and ratings.
• It authorises the start of the production operations
by releasing materials, components, tools, fixtures
and instruction sheets to the operator, and ensures
that material movement is carried out in
accordance to the planned routing sheets and
schedules.
The various functions/elements/duties of dispatching are:

(i) Collecting and issuing to work centre, all the concerned drawings,
specifications, route sheets, material requisitions,tool requisitions,
etc.
(ii) Issuing job orders authorising operations in accordance with
dates and times as indicated in schedules or machine loading
charts.
(iii) Obtaining inspection schedules and issuing them to the
inspection section.
(iv) Recording start and finish time of each job on eachmachine
or by each man.
(v) Issuing required materials (from stores), jigs, fixtures and
tools (from tool stores) to the user department or worker.
(vi) Distributing machine loading and scheduling charts, route sheets,
identification tags, etc., to each production and
inspection stage.
(vii) Returning jigs, fixtures and tools to stores after use.
8. Expediting (or Follow-up or Progressing):
 Expediting, also known as follow-up or progressing,
is a control function that keeps track of the progress'
of work in accordance with planned schedule.
 While dispatching initiates the execution of
production plans, expediting maintains the
production flow according to plan till the job is
completed.
 This follow-up is to be done at every stage in
production cycle, ie., follow-up of materials, follow-
up of work-in-process, and follow up of assembly.
The various activities/functions/duties of expediting
include:
(i) status reporting;
(ii) attending to bottlenecks or hold-ups in production
and removing the same.
(iii) controlling variations or deviations from planned
performance levels;
(iv) following up and monitoring progress of work
through all stages of production;
(v) co-ordinating with purchase, stores, tool room and
maintenance departments; and
(vi) modifying the production plans and replan if
necessary.
9. Inspection and Testing:
 Inspection and quality control is another major function of production
planning and control. This ensures that the quality of the product meets the
specifications as ordered, or decided in
product development and design stage.

 The findings are of great significance in the execution of current plans and
during the planning of future products as the limitations of processes,
method and man-power are known. These limitations are analyzed with a
view to improve production methods/facilities.

10. Evaluation:
 Evaluation function serves as a link between control and future planning.
Valuable information regarding all the problems faced in realizing the
product starting from preplanning to shipping stage is gathered in this
process.

 The information gathered can be used in preplanning, planning and control

stages in future manufacturing activities.
 PRODUCTION SYSTEMS:
Introduction:
 Production is the sequence of operations which transform
the given materials into desired products. This
transformation from one form to another is carried out
either by one or a combination of different manufacturing
processes.
 A system is a logical arrangement of components (physical
and conceptual) designed to achieve particular objectives
according to a plan.
 A production system is the frame work within which the
conversion of input into output occurs. At the one end of the
production system are the inputs and at the other end
outputs. Inputs and outputs are linked by certain operations
or processes which impart value to the inputs and are called
transformation process.
 Types of Production Systems

According to volume and standardisation of the

products, the production systems are classified as:

1. Job shop production,

2. Batch production,

3. Mass production, and

4. Process or continuous production.

1. Job Shop Production

• Meaning: Job or unit production involves the manufacturing of a single

complete unit as per the customer's order. This is a 'special order' type of
production. Each job or product is different from others and no repetition
is involved. The work is started only when the organisation has orders on
hand.

• According to the regularity of manufacture, there are three types of job

production:

1. A small number of pieces produced once.

2.A small number of pieces produced intermittently when the need arises.

3. A small number of pieces' produced periodically at known time

intervals.
Characteristics:
(i) High variety and low volume.
(ii) General purpose machines and equipment to
perform wider range of operations.
(iii) Flow of materials is not continuous i.e., it is
intermittent.
(iv) Highly skilled operators and supervisors are
required.
(v) Variable path material handling equipments
are used.
Merits:

(i) It involves comparatively small investment in machinery and

equipment.
(ii) It is flexible and can be adapted easily to changes in product
design.
Demerits:

(i) Very large work-in-process inventory.

(ii) Difficult in planning, scheduling and coordinating the
productions of numerous components of wide variety.
(iii) Highly skilled workforce is required.
(iv) Manufacturing cycle time is more.

Suitability: Job shop production is applicable where custom-made

products are to be produced on a small scale.
2. Batch Production
Meaning: In this type. the products are made in
small batches and in large variety. Each batch
contains identical items but every batch is
different from the others.
Three types of batch production are:
1.A batch produced only once.
2.A batch produced repeatedly at irregular
intervals, when the need arises.
3.A batch produced periodically at known
intervals, to satisfy continuous demand.
Characteristics:
(i) A large variety of products are manufactured
in lots or batches.
(ii) Both general purpose machines (for
producing parts) and special purpose machines
(for assembling the parts) are used.
(iii) Flow of material is intermittent.
(iv) Plant layout is process type.
(v) Flexible material handling system.
Merits:
(i) Short production runs.
(ii) Plant and machineries are flexible..
(iii) Medium variety and medium volume.
Demerits:
(i) Large work-in-process inventory.
(ii) More number of set-ups.
(iii) Workloads on various machines / sections are
unbalanced.
(iv) Process and product planning is to be done for each
batch.
Suitability: Drugs, clothes, paints, parts manufactured
on turret lathes, forging machines and sheet metal
presses are a few examples of batch production.
3. Mass Production:
Meaning: In this type of production, only one
type of product or maximum 2 or 3 types are
manufactured in large quantities, Standardisation
of products, process, materials, machines and
uninterrupted flow of materials are the basic
features of this system. Mass production system
offers economies of scale as the volume of output
is large.
Characteristics:
(i) Low variety and high volume.
(ii) Flow of material is continuous.
(iii) Special purpose machines are used.
(iv) Mechanised material handling systems such as
conveyors are used.
(v) The machine capacities are balanced.
(vi)Degree of mechanisation or automation is high.
Merits:
(i) It offers lowest cost of production.
(ii)Shorter cycle time.
(iii)Work-in-process is comparatively low.
(iv) Easier production planning and control.
(v) Relatively lower skilled persons can manage
work.
Demerits:
(i) Higher inventory of raw materials.
(ii) Less flexibility of equipment and machines.
Suitability: Electronics, electricals, automobiles,
bicycles and container industries are a few
examples of mass production industries.
4. Process Production:
Meaning: This type of production is used for
manufacture of those items whose demand is
continuous and high. Here single raw material can be
transformed into different kind of products at different
stages of the production processes. e.g., in processing
of crude oil in refinery one gets kerosene, gasolene,
etc,, at different stage of production.
• The characteristics, merits and demerits of
continuous production system are the same as that
of the mass production system.
• Suitability: The industries like paper, textiles,
cement, chemicals,automobiles, etc., are a few
examples of continuous production industries.
Comparison between Types of Production:
 PRODUCT DESIGN AND DEVELOPMENT

What is Product Design?

• Design is the conversion of knowledge and requirement into a form,

convenient and suitable for use of manufacture. It is observed that
inputs of the organisations resources results properly designed
products and services known as outputs satisfying the customer's
desire.
• Product design deals with its form and function. Form implies the
shape and appearance of the product while function is related to the
working of the product. Designing is very essential before actual
transformation of raw-materials into finished product.
• The product design, in its broadest sense, includes the whole
development of the product through all the preliminary stages until
actual manufacturing begins.
• Design of the product is obviously an important activity. It is the
product design that can give an edge over competitors.
What is Product Development?
• Development is the work of contributing towards
improvement in the existing knowledge by way of
improved ideas, systems,techniques, etc.
• Product development is a specialised activity which may
result in creation of new products or modifications in the
production process to produce the same product.
• In short, devising a product to meet the changing
requirements of the markets is known as product
development.
• Product development can be divided into two main
categories:
(i) Introduction of new products, and
(ii)Improvement of existing products.
• There are four main tools for development of products
viz standardisation, simplification, specialisation and
diversification. These tools will be studied separately at
the end of this unit.
• Product engineering is a broad term used to combine
the activities of both product design and product
development. Product engineering is concerned with
every aspect of a product from the initiation of the need
for the product to its design, development,
manufacturing, use and final disposal. In other words, it
is concerned with every function involved during the
life-cycle of a product.
PRODUCT ANALYSIS
 Once the profitable product is selected, then the next step is the detailed analysis of
the product with respect to various factors that influence the product design.
 The main objectives of product analysis is to obtain a qualitative as well as
quantitative evaluation of the influencing factors which determine primarily the
success of a manufactured product.
 Many factors have to be analysed related to development and design factors, which
vary in character and complexity, and factors related to different fields in
production and industrial engineering.
 Factors that influence product design can be grouped under four headings.

They are:

1. Marketing aspects

2. Product characteristics

(a) Functional aspects

(b) Operational aspects

(c) Durability and dependability aspects

(d) Aesthetic aspects

3.Economic analysis
(a) Profit consideration
(b) Effect of standardisation, simplification, and
specialisation
(c) Break-even analysis

4. Production aspects
• The various factors that influence product
design and their interrelationship, presented by
Chitale and Guptha, is illustrated
Marketing Aspects:
• Obviously, it is necessary to ensure that the
proposed production should fulfill the demand of
the market. In other words, it is very important to
assess the marketability of the proposed product.
• If there is no potential market for the proposed
market, then it is a meaningless activity to design
and manufacture the product. Therefore before
going for the product design and other activities, the
marketability of the product should be carefully
examined.
• A market analysis is done to determine its size, the
nature of the customer, and possible trend.
The marketing analysis for the proposed product
seeks to give answers to the following questions:
(i)Whether the proposed product offers the
functions that are desirable and acceptable to the
customers?
(ii) Is it within the buying capacity of the
customers?
(iii) Does the product satisfy customer's
preference in regard to its size, shape, colour, etc.
(iv) Is the product already existing?
(v) Is it entirely new product about which the
customer is unaware?
(vi) What will be the expected demand for the
product both short-term and long-term?
(vii)What are the factors that influence the
demand for this proposed product?
(viii) Who are the competitors?
(ix) What is the basis of competition for the
product?
(x) What are the distinguishing features offered by
competitors?
(x) What is the price prevailing in the market?
(xii) What is the prevailing distribution system?
etc.
• The estimation of demand for the existing product
is comparatively easier than that for the new
product. Therefore in order to estimate the
demand for the new product, a thorough market
survey is to be carried,
• The estimation of demand for the existing product
can be assessed by consumer research and sales
figures for identical and similar products.
• Demand can also be created with the introduction
of a new product, either by filling a gap in the
market or by offering new features/functions. The
estimation of such demand can be assessed by
market research.
• Therefore it is very essential for an organisation to keep
in constant touch with the target market and a "feel" its
trends.
• If the management wants to achieve maximum
satisfaction and desires to supply the consumer with
what he/she wants or he/she is supposed to want, it may
have to produce a variety of models to suit every taste.
• In practice, product design is a result of sort of
compromise between variety on one hand and the
designer's concept of the ideal design on the other. In
selling this compromise, the management opts for an
advertising campaign.
Advertising serves many purposes. Some of the
objectives of advertising are:
(i) To provide general information about the
existence of the product.
(ii) To provide technical information about its
functional characteristics or utility.
(iii) To draw the customer's attention to those
special features targeted at the customer.
(iv) To create demand among a passive
population of customers.
(v) To educate the customer, or tell him what
he/she should want.
 It is understood clearly that the input from
marketing experts is crucial in deciding the
products to make, how many to make, and
when to make them.
 So it may be said that production activities.
begin with the marketing function whose input
continues through the management and design
functions.
 Thus, marketing aspects which analyses the
factors that influence the demand of the
product is a crucial step in product analysis.
Product Characteristics
• Market analysis generates functional
requirement which in turn generates
specification for product development. In
addition to the functional aspects, other
aspects such as operational aspect (ie.
ergonomic considerations), ease of
maintenance, durability and dependability
aspects, and aesthetic aspect, are also essential
inputs to product development.
1.Functional Aspect
• Once the marketability of the proposed product has been
explored. then the functional scope of the product has to be
carefully analyzed and properly defined.
• Thus the functional analysis reveals the functional scope of the
product, ie., how the product functions.
• For example, a washing machine has a clearly defined
objective to wash clothing. However, this does not state how
the washing should be carried out, whether rinsing or drying,
or both are to be done by the machine and if so what should be
the proportion between automatic and manual supervision.
Thus, the functional analysis obviously influence the design of
the machine, its complexity, its appearance, and its price.
• Now-a-days, there is a trend to offer functional versatility of
the product. This increases the range of applications of product
to the customer.
• For example, a kitchen mixing machine allows for a large number
of attachments to be added for a variety of duties. Basically the
mixer housing, contains a power unit and a speed regulator, but it
has to be designed so as to cover all the attachments. Household
power-tool sets are designed on very much the same principle: the
hand drill is the basic unit, and with attachment it can become a
table drill, a polisher, a cutter, etc.
• In each and every case, the customer has to decide and define
himself the functional scope that will satisfy his needs, his taste
and his ability to pay.
• Versatility of production machinery may quite often result in
substantial savings in floor space and capital expenditure. Also the
provision of multifunctions will create a psychological satisfaction
of owning more than one product.
• Thus the functional aspect becomes the one of the fundamental
factors which affect the design policy.
2. Operational Aspects
• Once the functional aspects of the proposed
product are determined, then operational aspects
of the product has to be carefully analyzed and
properly defined.
• Besides performing the intended functions, the
product should also be easy to handle and simple
to operate.
• The product is used at different operational
conditions and the customers vary with aspect to
skill and knowledge. These factors in addition
with multifunctional features complicate the
product designers' problem.
• Versatility of equipment should also be
analysed in this light. Particularly when
subsequent operations are to be carried out
with the aid of different attachment, the
designer should always bear in mind the time
required to perform the changeover and should
make certain that this time is in reasonable
proportion to the operation time.
3. Durability and Dependability Aspects:
• Durability and dependability are the two factors that
often determine quality and reliability of the product.
Hence they have to be carefully considered by the
product designer.
• Durability refers to the length of the active life or
endurance of the product under given working
conditions.
• A measure of the product capability to idle or
withstand storage is also often considered in accessing
durability.
• Durability need not always be associated with selection
of good materials. Therefore an additional criterion has
to be considered that of dependability.
• Dependability refers to the reliability with which the
product serves its intended function.
• When a product does not function at the right moment
when it is called upon to do its job, then it has very poor or
no dependability.
• Another aspect of durability is that maintenance and repair.
• The amount of repair and preventive maintenance required
for some products are closely related to quality and design
policy.
• Easy accessibility is a fundamental principle in a sound
design, and thorough knowledge on the part of the
operational durability. dependability, and maintenance
requirements of the product are absolutely essential to
ensure a well-balanced design within the policy outlined
by higher management.
4. Aesthetic Aspect:
• Aesthetic aspect refers to the final shape and
appearance around the basic skeleton which are
required for performance of intended functions.
• Aesthetics make the product attractive and induce
in the customer a willingness to possess.
• The aesthetic in form and appearance have
expressions such a symmetry, balance, contrast,
continuity and proportion; th adding value to the
product.
• Thus the aesthetic aspect helps the marketing
function of the product by attracting the customers
and creating the deep impression about the
product.
• When styling is a dominant factor in product
design, it is often used as a means to create
demand. Changes in fashion and taste
evolution of form, and introduction of new
ideas quickly outdate previous designs. Styling
has become a race against time, a race that
determines the salability of the product.
• Designers use variety of techniques to build
aesthetic characteristics into the products.
Some of the techniques, recommended by
Samuel Eilon, to enhance aesthetic appeal in
product design, are presented in Table.
1. Use of special materials (either for the parts of the housing or as additional
decorations).
2. Use of colour (either natural colour of the materials or colour provided by paints,
platings, spraying, or even lighting).
3. Texture as a supplement to colour (either by appropriate treatment of the given
surfaces or coatings).
4. Shape denoted by outer contours and similarity to familiar objects.
5. Use of lines to break the form. It is also used for the purpose of emphasizing parts of
it, or to give a sense of continuity, graciousness, and attainability.
6. Scaling the product (either to a blown-up size or to a small size). This creates
novelty and a sense of completeness.
7. Packaging: Novel and attractive packaging of products often influence the minds of
the customers to buy the product.
• Aesthetic aspect should be governed by the
selection of material, colour, texture and has
great economic advantages, since great variety
can be achieved at a comparatively low cost.
Modern production control techniques allow
for a vast number of combinations of colour
and textures to be offered with little difficulty.
• Aesthetics have been fully recognised as an
integral part of design, and designers cannot
afford to ignore their implications, their tools,
and their benefits.
Economic Analysis
• An economic analysis is the key to the
management decision in product design policy.
• The designer has to consider an overall view
of the economic aspect of both the producer
and the customer. He should be conscious of
the cost of manufacture and distribution. It is
preferable to consider the life-cycle at the
design stage itself.
• The economic aspect of produc analysis is
dealt elaborately, of this unit.
Production Aspects (Design for Manufacture):
• The design will be converted into reality in the product
shop where it will be transformed into a physical product
to be offered to the customer. So successful transformation
of design into a saleable product is a challenge to the
organisation. This needs a close coordination of production
and design department at all stages of manufacturing the
product.
• Thus, a designer cannot design the product in isolation and
an increased interaction is needed by production and other
departments to produce that can be manufactured without
any problems. This current trend is referred as 'design for
manufacture (DPM).
• The design for manufacture (DFM) means the design for
ease of Manufacture of the components of a product.
• The DEM provides guidelines for the designer
about the good manufacturing practices. DFM
guidelines may be broadly grouped into four
groups:
1.Guidelines for general approach to DFM,
2.Guidelines for selection of the manufacturing
processes,
3.Guidelines for particular processes, and
4.Guidelines for assembly.
1. Guidelines for General Approach to DFM
• Design for manufacture guidelines are
basically concerned with optimizing the
manufacturing system with respect to cost,
quality, and productivity.
• DFM guidelines are systematic and codified
statements of good design practice that have
been empirically derived from years of design
and manufacturing experience.
Most commonly used DFM guidelines are listed as follows:
(i) Design for a minimum number of parts.
(ii) Minimise part variations.
(iii) Design parts to be multi-functional.
(iv) Design parts for multi-use.
(v) Design parts for ease of fabrication.
(vi) Develop a modular design.
(vii) Avoid separate fasteners.
(viii) Minimise assembly directions; design for top-down assembly.
(ix) Maximise compliance; design for ease of assembly.
(x) Minimise handling; design for handling and presentation.
(xi) Evaluate assembly methods. (xii) Eliminate or simplify
adjustments.
(xii) Avoid flexible components.
2. Guidelines for the Selection of Production
Process
General guidelines for the choice of production
process are:
(i) Select a process proportionate with the required
accuracy and surface finish.
(ii) Select component dimension and surface finish
parameters that allow the widest possible tolerance
range and surface finish variation.
(iii) Make full use of prototypes.
(iv) Make a detailed comparative assessment of
available manufacturing systems at the design
stage and assembly costs.
3. Guidelines for Particular Processes
We know that each process will have its own characteristics
and hence own associated guidelines.
(a) Guidelines for Moulding Processes
The commonly used guidelines for casting processes are:
(i) The form of a casting should allow free withdrawal of
the pattern from the mould. This may be accomplished by
allowing a draft (taper) on the vertical surfaces of casting.
(ii) Minimize tooling costs by using simple shapes with the
minimum number of pattern pieces and cores.
(iii) Avoid defects in the moulding by using constant wall
sections or gradual changes in section.
(iv) Assist any subsequent machining by avoiding sloping
surfaces, and by breaking up large surfaces.
(b) Guidelines for Forming Processes
The aspects should be considered in the forming
processes (like forging and extrusion) are as follows:
• The part may be removed from the die by
avoiding undercuts and by providing tapers.
• Minimise tooling cost by using simple shapes and
flat die split planes.
• The part should fill the die by avoiding very
narrow or deep rios, sharp changes in cross-
section and sharp corners, and by designing
shapes that occur in unrestrained pressing.
(c) Guidelines for Machining Processes:
The general guidelines used for material
removing processes are:
(i)Reduce the amount of machining as far as
possible, by assigning size tolerances.
(ii) Provide the convenient and reliable locating
surfaces to set up workpiece for machining.
(iii) Use simple tool shapes.
(iv) Provide adequate clamping.
(v) Design parts so that several workpieces can
be set up simultaneously.
4. Guidelines for Assembly:
• Design for assembly (DFA) means the design of the
product for ease of assembly
• The objective of DFA is to identify product concepts
which are inherently easy to assemble.
• DFA can be carried out throughout the product
introduction process from conceptual design to
component detailing
The most commonly used DFA guidelines are listed as
follows:
(i)Minimise the number of parts.
(ii) Minimise assembly surfaces.
(iii) Design for top-down assembly.
(iv) Improve assembly access.
(v) Maximise part compliance.
(vi) Maximise part symmetry.
(vii) Optimise part handling.
(viii) Avoid separate fasteners.
(ix) Provide parts with integral self-locking
features.
(x) Standardise fasteners.
(xi) Drive toward modular design.
(xii) Design for ease of labelling.
(xiii) Design for ease of testing.
BASIC PRINCIPLES OF PRODUCT DEVELOPMENT
(Product Development Techniques/Methods)
There are various product development techniques/methods
available to support the product design and development
process. Some of them include:

1. Standardisation,
2. Simplification,
3. Specialisation,
4. Diversification,
5. Miniaturisation, etc.

Now we shall discuss the three S's-standardisation,

simplification, and specialisation, in detail, in the following
sections.
 STANDARDISATION:
What is meant by Standardisation?
• Standardisation primary means setting up
standards or measuring sticks by which extent,
quality, quantity, value, performance or service
may be gauged or determined.
• Standardisation may be defined as the process
of defining and applying the 'conditions
necessary to ensure that a given range of
requirements can normally be met with a
minimum variety and in a reproducible and
economic manner on the basis of the best
current techniques.
• Standardisation means fixation of some appropriate size,
shape, quality, manufacturing process, weight and other
characteristics as standards to manufacture a product of
desired variety and utility. For example, manufacture of
television sets of standard size of the screen using standard
components and technology, shaving blades are made of
standard size and shape to suit every kind of razor.
• The concept of standardisation is applicable to all factors
of production namely men, machines, materials and
finished goods. These standards can become the basis to
evaluate the performance of various components of
production in a manufacturing process.
• Standardisation becomes the basis of production control
operations and works as a catalyst in directing and
operating the working of business enterprises.
• Standardisation is an instrument to
manufacture maximum variety of products out
of minimum variety of components by means of
a maximum variety of products out of
minimum variety of machines and tools. This
decreases working capital requirements and
reduction in manufacturing costs.
• Standardisation also implies that non-standard
items are not to be manufactured except when
consumers order them specially.
Objectives of Standardisation
The various aims of standardisation are as below:
1. To achieve maximum overall economy in terms of
(a) Cost,
(b) Human effort, and
(c) Conservation of essential materials as opposed to more
readily available materials.
2. To ensure maximum convenience in use. This objective of
standardisation leads to simplification, rationalisation.
interchangeability of parts and freezing of dimensions of
components.
3. To adopt the best possible solutions to recurring problems.
4. To define requisite levels of quality.
5. To facilitate national and international exchange of goods
and services and to develop mutual cooperation in the sphere
of intellectual, scientific, technological and economic activity.
Classification of Standardisation
1. Basic standardisation: It is based upon general consideration of numerical theories.
✓ It includes standardisation of various basic elements such as scales and weights,
voltages, preferred numbers, preferred sizes, limits and fits, screw thread profiles,
surface texture, drawing paper sizes and testing procedures.

2. Dimensional standardisation: It includes standardisation of various engineering

components such as nuts, bolts, screws, gears, keys, rivets and bearings.

3. Material standardisation: The materials that are used in

production are standardised in quality, size, shape and other physical aspects. It
includes standardisation of raw materials, lubricants,coolants, cotton waste, various
tools, etc.

4. Equipment standardisation: The equipments used should also be standardised.This

standardisation includes the specifications relating to various machines and
equipments required for production, their location, layout and performance rating.

5. Process standardisation: The operation method in a factory is standardised to get the

maximum benefit of ease and cheapness in production.
6. Quantity standardisation: The economical quantity
(EOO) to be produced is decided earlier and this
assumes the standard for production
7. Safety measures standardisation: This standardisation
refer to rules and regulations formed to assure the safety
of men and machines in a factory.
8. Personnel Standardisation: This standardisation refers
to workers' selection, training and aptitude, their wage
rates and operating times.
9. Administrative standardisation: This standardisation
refers to office methods and procedures to assure a most
efficient working.
Activities of Standardisation
The main categories of the activities covered by the
standardisation are:
1.Physical dimensions and tolerances of components
within a defined range.
2.Rating of machines or equipment (in units of
energy, temperature, current, speed, etc.).
3.Specification of physical and chemical properties
of materials.
4.Methods of testing characteristics or performance.
5. Methods of installation to comply with minimum
precautionary measures and convenience of use.
Benefits of Standardisation:
The important benefits of standardisation are:
(i) Reduction of material waste and obsolescence.
(ii) Reduced manufacturing cost per unit and hence the
reduced price.
(iii) Uniform quality of the product
(iv)Reduced maintenance, servicing and replacement of
equipment and parts.
(v) Reduced work-in-process and finished products
inventories.
(vi)Reduced book-keeping and other documentation
work.
(vii) Increased customer confidence to buy products.
(viii) Better and quicker product deliveries.
Limitations of Standardisation:
Some of the disadvantages of standardisation
include:
(i) Reduced choice for customers because of
reduced variety.
(ii) Changes in product design or new product
design may take a very long time.
(iii) Excess standardisation of operations and
procedure will reduce the initiative and interest
of workers.
Preferred Numbers:
• Many products can be made in continuous series of sizes from
very small to extremely large. For example, electric light bulbs are
required from few watts to 1000 W. But to make them in every
watt or even 10s of watt (10, 20, 30, ...) could be impracticable.
The manufacturers of such products produce the product only in
some standard sizes. These standard sizes are determined by using
preferred numbers.
• Preferred numbers are defined as series of numbers selected to be
used for standardization purposes in preference to other numbers
• The use of preferred numbers will lead to simplified practice.
Therefore, the preferred numbers should be employed whenever
possible for individual standard sizes and ratings:
• Preferred numbers are also known as Renard numbers (after its
inventor Renard). Renard suggested the use of a geometrical
progression as a guide for selection, and this system can be
adopted in standardisation to cover the given ranges satisfactorily.
• To determine the common ratio, one should
know the largest sin smallest size and the
number of step sizes required between them
The proportionality factor is given by
SIMPLIFICATION:
What is meant by Simplification?
Simplification is the process of reducing the variety of
products manufactured i.e,variety reduction
• Simplification of product refers to the elimination of
excessive and undesirable or 'marginal lines' of product
to eliminate waste and to achieve economy.
• Simplification is concerned with the reduction of
product range, assemblies, parts, materials and design.
• Simplification is also termed as 'Product line
contraction'.
• Simplification makes a product or assembly, simpler and
less complex.
• Simplification enables the production department to
improve planning, achieve higher rates of production
and machine utilisation, and simplify control procedures.
Considerations in Simplifying Products:
Before simplifying any product, one should ask
himself the following questions:
(i)Whether simplification can be achieved
effectively for the nature of the given product?
(ii)How the simplification will affect customer
demand and volume of sale ?
(iii)Does market competition permit
simplification or encourages product
diversification?
Effect of Simplification on Pareto diagram:
• In Fig, curve A reveals that 25% of the
products brought in 75% of the income.
• This is referred as "25% to 75%" relationship.
This 25% to 75% model is undesirable and it
leads to unnecessary drain of the firm's efforts.
• A more desirable situation is when
responsibility for income is more evenly
distributed between products, as the curve B
(flat curve) in Fig.
• It is understood that curve B is achieved
through variety reduction i.e, simplification.
Benefits of Simplification:
(i) It reduces manufacturing operations and risk of
obsolescence.
(ii) It makes possible the effective utilisation of
special purpose and automatic machines.
(iii) It simplifies production planning and supervision.
(iv) It leads to lower manufacturing costs and higher
sales.
(v) It provides quick delivery and better after-sales
service.
(vi) It reduces inventory and hence better inventory
control.
(vii) It improves product quality.
Limitations of Simplification:
Some of the disadvantages of simplification
include:
(i)It cannot satisfy a wide range of demand.
(ii)It cannot enable better contact with the
demand to tastes and requirements.
(iii) It cannot create demand.
(iv)It creates a constant source of conflict
between marketing and production.
 SPECIALISATION:
What is meant by Specialisation?
• As the name indicates, specialisation means having specialisation or
expertise in particular product line, instead of diversification.
• Specialisation is the process whereby particular firms concentrate on
the manufacture of a limited number of products or types of products.
• Specialisation implies expertise in some particular area or field. The
main objective of specialisation is the reduction in the variety of
products manufactured by the organisation.
• It is the extreme case of simplification concentration on a limited
number of products, processes, etc. In fact, combination of
simplification and standardisation leads to specialisation.
• This term can be applicable to products, processes, materials,
resources or any other aspect of management/manufacture/design.
• The concept of standardisation, simplification, and specialisation are
not identical terms and are independent of each other, but they are the
principles leading to lay the foundation of mass production at most
economic price.
Advantages of Specialisation:
(i) Better utilisation of equipments.
(ii) Higher productivity.
(iii) Greater efficiency.
(iv) Better quality.
(v) Reduced production cost and hence lower unit
price.
(vi) Use of standardised methods.
Disadvantages of Specialisation:
(i) Lesser flexibility in adjustments to changed
situations.
(ii) Monotony in work and loss of initiative.
ECONOMIC ANALYSIS
• Economic analysis is the key to the management decision in product design
policy.
• Before any proposed product is undertaken at the design stage, economic
analysis of the proposed product must be carried out
• The following data is required to carryout economic analysis since this
analysis is key to management decision regarding the selection of product
design:
(i) Capital expenditure required for manufacturing the new product in terms of
fixed costs and variable costs for the desired quantity.
(ii) Production cost per price.
(iii) Price (cost profit) and the product features render it competitive in the
market.
(iv) Quantity forecasted.
(v)Requirements of various direct and indirect materials.
Profit Consideration:
• We know that total cost of a product includes
materials cost, labour costs, expenses,
overheads, storage and distribution costs. The
total profit is determined by the margin of
profit per unit and by the sales volume.
• If an organisation seeks to increase its profit, it
can use any one of the three methods.
1. Pure Pricing Strategy:
• In the first method, in order to increase the total
profit, increase the margin of profit per unit and
hence the sales price, but leave the total production
to costs unchanged.
• If the sales volume remains same, then the total
profit would be proportional to the increase in the
margin of profit per unit.
• In that case, the ratio of customers' value of the
product to its price will deteriorate and the products
of competitors will become attractive.
• Also the market may shrink, and the total profit
may, in extreme cases, fall below its original level.
2.Marketing strategy (through design, advertising and
pricing):
• In the second method, in order to increase the total profit,
leave the total costs unchanged, but to improve the ratio of
value to price,pricing) and thus widen the market.
This can be achieved by:
(i) by producing a better or more attractive product at the
same cost;
(ii) by launching an intense advertising campaign in order to
improve the customers' assessment of the product value; or
(iii) by reducing the sales price at the expense of the margin of
profit per unit, hoping that the market will expand enough
to increase total profit.
• Too low margin of profit per unit is undesirable as there are
possibilities of instabilities in the market.
3. Reduction of in-house production cost:
• In this method, in order to increase the total
profit, reduce the total production costs and
pass some of the benefits to customers in the
form of reduced sales prices.
• If both the profit per piece and the size of the
market increase, a significant improvement in
total profits will be achieved.
• This method is relying on the concept of
continuous search for better methods, better
processes, better materials, and better
management to reduce overheads.
 BREAK-EVEN ANALYSIS
What is Break-Even Analysis?
• Break-even analysis, also known as cost-volume-
profit analysis, is the study of inter-relationships
among a firm's sales, costs and operating profit at
various levels of output.
• It reveals the effect of fixed costs, variable costs,
prices, sales mix,etc., on the profitability of a firm.
• It is a simple method of presenting to management
the effect of changes in volume on profit.
• It is concerned with finding the point at which
revenues and costs are exactly equal. This point is
known as break-even point.
Aims of Break-Even Analysis:
(i) To help in deciding profitable level of output, below which losses will occur.

(ii) To compute costs and revenues for all possible volumes of output to fix
budgeted sales.

(iii) To take decision regarding make or buy.

(iv) To decide the product mix and promotion mix.

(v) To take plant expansion decisions.

(vi) To take equipment replacement decisions.

(vii) To indicate margin of safety.

(viii) To fix the price of an article to give the desired profit.

(ix) To compare a number of business enterprises.

(x) To compare a number of facility locations.

Assumptions in Break-Even Analysis
1. Selling prices will remain constant at all sales
levels (ie., quantity discounts are not available).
2. There is linear relationship between sales
volume and costs.
3. It assumes that costs are classified into fixed
and variable costs, ignoring semi-variable costs.
4. It considers that production is equal to the
sales (ie., there is no inventory).
5. No other factors will influence the cost except
the quantity.
Break-Even Point
• The break-even point may be defined as the
level of sales at which total revenues and total
costs are equal. It is a point at which the profit is
zero.
• It is also known as "no-profit no-loss point"
• If a firm produces and sells above the break-
even point, it makes profit. In case it produces
and sells less than the break-even point, the firm
would suffer losses.
• Management can change the break-even point
by changing fixed cost, variable cost and selling
price.
Determination of Break-Even Point:
Two approaches used to determine break-even
point are:
(i) The algebraic method, and
(ii) The graphical method.
1. The Algebraic Method

(1) Break-even point in terms of Physical Units

Let

FC = Fixed cost,

VC = Variable cost per unit,

TVC = Total variable cost,

TC = Total costs,

TR = Total revenue ie, total income,

Q = Sales volume ie, quantity sold, and

SP = Selling price per unit.

We know that,

Total costs = Fixed cost+ Variable cost

2. The Graphical Method (Break-Even Chart)
• Break-even chart is a graphical representation
of the relationship between costs and revenue
at a given time.
• It is a graphic device to determine the break-
even point and amount of loss or profit under
varying conditions of output and costs.
• In break-even chart, cost and revenue in
rupees is represented on vertical axis, while
output in quantity is represented on horizontal
axis.
• In Fig., the fixed cost line is horizontal and
parallel to the X- axis. It indicates that fixed costs
remains unchanged for any volume.
• The variable cost line is superimposed on the
fixed cost line to show total costs. The total sales
revenue line is drawn as shown in Fig . This line
indicates sales income at various levels of output.
• The point at which the total revenue line intersects
the total cost line is the break-even point.
• The shaded area above the BEP marks profit to the
firm whereas the shaded area below the BEP
represents loss to the concern.
Margin of Safety:
• Margin of safety is the difference between the
existing level of output and the level of output
at BEP.

• Greater value of margin of safety means

higher profits to the firm.
• If the safety margin is low, then the firm runs
the risk of incurring losses.
Angle of Incidence:
• This is an angle at which sales revenue line
cuts the total costs line.
• A large angle of incidence indicates a high
profit rate.
• A narrow angle shows that even fixed
overheads are absorbed and relatively low rate
of return.
Limitations of Break-Even Analysis:
(i) Break-even analysis is a static picture as it assumes
constant relationship of output to costs and revenue.
(ii) Practically, the selling price and variable cost per
unit are not constant. So the break-even analysis
cannot be more realistic.
(iii) Break-even analysis is based on accounting data
which may suffer from several limitations like neglect
of imputed costs, arbitrary depreciation estimates,
inappropriate allocation of overheads, etc.
(iv) The break-even chart is a tool for short run
analysis. It cannot be used for long range analysis.
ECONOMICS OF A NEW PRODUCT DESIGN
(SAMUEL EILON MODEL)
• When the launching of a new design or model is
contemplate a careful analysis of the economics of
the proposed project he to be undertaken.
• As discussed already, the purpose of introducing a
new mode to the market is two fold:
(i) To increase the profit of the organisation,
(ii) To avoid decline in sales of an existing model due
to stif competition.
• Samuel Eilon has proposed a model, which is based
on the break-even analysis, to determine whether
the additional investment is desirable or not?;
whether the new product will be profitable or not?.