Operations Planning and Control

PRODUCTION/ OPERATION PLANNING & CONTROL

PRODUCTION/ OPERATION PLANNING

PRODUCTION/ OPERATION CONTROL

Interrelated functions, often treated as one

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Activities of OPC

Operations planning pre-operations [Operations implementation] Operations control during operations and
post operations

Operations/Production Planning

Pre operation activity

Essential prerequisite to production &

production control

Planning all activities from what to produce,

to product delivery

5W-1H on production/operation
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Operations Planning Product planning Process planning

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Product planning (A company designing their product and making) What to produce? Market requirements, market survey Sales forecast Value engineering Product design Bill of Materials (BOM)
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Process Planning How to produce? Planning of Production Process Organization of production system?

Production/Operation System
OBJECTIVES

MATERIAL ENERGY

FACILITY
CAPAITL LABOR

INPUTS
ELEMENTS OR SUBSYSTEMS

OUTPUT

OUTSOURCING

R/M HR

QCD
OPN I

QCD
OPN II

QCD
OPN III INSP

QCD
INV

QCD

PARTS

Machines, tools, drawings, instruments, utilities

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Tooth powder can

Oval powder can

Seamed body

crimped shoulder

End component

oval shaped body

shoulder

neck

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Tin plates

Store

Inks coatings & consumables

Trim

Print

Slit

Body maker

ends

shoulders

necks

end seamer

crimping

Pack

Pack

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Roller bearings Outer race Inner race Cages Rollers

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EN31 Steel wire Coil

Cold forging

Heat treatment

Grinding

ROLLERS

Super finishing

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EN31 Steel bars

Turning

Heat treatment

Grinding

OUTER RACES

Super finishing

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EN31 Steel bars

Turning

Heat treatment

Grinding

INNER RACES

Super finishing

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EN31 Steel sheets

Punch -ing

CAGES

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INNER RACES

OUTER RACES

ROLLERS

ASSEMBLY

CAGES

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Organization of production system

Objectives?, outputs?, elements?, inputs? Objectives What to make? Quality standards How much to make? Quantity When to deliver? Lead-time

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Outputs to meet objectives as above Inputs Raw materials Bought out parts Human skills Utilities

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Subsystems or elements of production Equipment Layout Material handling Nature of operations Sequence of operations Standard times Utilities
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Factors influencing production planning

Volume & variety - Nature of the production system Product process matrix Nature of the production process Mass production? Batch production?

Job shop?
One off?
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Objectives of production planning

To provide an effective and efficient

physical system for production

On the basis of sales forecast and its

engineering analysis for high quality and cost effective production

Estimate resource requirements

Estimate when and where they are required

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 Make arrangements to meet production

targets with flexibility to meet market dynamics

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Procedure for production planning 1.Demand forecast 2.Specification of production requirement Demand Vs Capacity (equipment & labour) Process of production, sequence, route etc Outsourcing Delivery schedule Production schedule Procurement schedule
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Setting production rate Sales requirement and resultant work load on the operations Daily production? Capacity of production lines? Manpower requirement? Shifts planning? Overtime?

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Production/Operations control
Post production planning, during production and post production Functions of production control (importance, role) 1. Ensuring Quality, Quantity and Delivery of parts, subassemblies and products (major assemblies)
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2. Feed back to management on production activity, C/CA/PA taken 3. Maintain high level of productivity, effective utilization of resources 4. Ensure minimum cost and high customer service

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Benefits of production/operation control Profitability through 1. Balanced inventory levels of R/M, WIP, F/G inventory cost reduction 2. Effective utilization of equipment, tooling, manpower, manufacturing and storage space - productivity 3. Reduction in setup costs lead-time & cost reduction 4. Reduction scrap & rework costs cost reduction
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 Competitive advantage 1. Reliable delivery to customers 2. Shorter customer lead-time 3. Pricing flexibility through lower production costs 4. Orderly planning & control for marketing of new products

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Elements of production control 1.Control of planning availability of sales information, BOM etc. on time 2.Control of materials procurement schedules 3.Control of tooling tools & dies readiness 4.Control of manufacturing capacity utilization of equipment capacity 5.Control of activities issuing orders and schedules 6.Control of quantity at every stage
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7. Control of materials handling material movement on the floor 8. Control of due dates - monitoring of schedules 9. Control of information on C/CA/PA for future plan

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Elements of production control system

A system is a set of documented procedures

1. Preparation of Production orders what?

2. To set Lead time for production

3. To monitor and control production job card system, registers

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4. To record machine utilization, indirect labour utilization, scrap and rework to improve productivity production report, scrap report
5. An information system for collecting and processing and display of the data

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Factors determining production control procedures Nature of production Complexity of operations 1. Number of parts in the final product 2. Number of sub assemblies 3. Number of operations in each part 4. Sequence of operations 5. Variations in output rates of the machines 6. Customers orders with specific delivery dates, customers order schedule 7. Small lot orders 35

Magnitude of operations Time required for the operation Distance of material movement

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Operations Planning & Control Making a plan to organize inputs and run subsystems to meet organizational objectives and Taking C/CA/PA to ensure that the plan remains focused on objectives

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Role of OPC is to deliver customers expectations

1. OPC as a system
Set measurable objectives
Identify subsystems

Document procedures
2. Performing OPC functions

3. Maintain records
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Objectives of the company & role of OPC Expectation - customer Objective - supplier What does a customer expect? 1. Reliable yet reasonable delivery commitment 2. To be advised in case of delays 3. To be helped when he/she is in difficulty 4. Consistent good quality of products 5. Competitive rates
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Objectives of OPC
The broad objectives 1.To contribute in fulfilling corporate objectives and objectives of operations management

2.To help in setting up standards for future

3.To increase efficiency of operations

4.To increase productivity

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Specific objectives
1. Reliable yet reasonable delivery commitment Procurement Plan

Resources, available? To be procured? Interaction with materials management

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Production Plan

Capacity committed, uncommitted Tools availability Maintenance schedules Any outsourcing?

Delivery commitment based on above to be reliable yet reasonable
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2. To be advised in case of delays Monitor the plan efficiently Do C/CA/PA on deviations When delays are beyond control keep the customer informed

Major breakdown of equipment

Accidents

Strike
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Acts of God

 Take full stock of the situation

convince the customer and reschedule the delivery 3. To be helped when he/she is in difficulty When another vendor fails When customer has rush orders OPC should keep some spare capacity as this is normal
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 Accommodate the customer without sacrificing regular orders

4. Consistent good quality of products

Resource planning

Planning equipment as per process capability

Being committed to quality

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5. Competitive rates
Lower the price offered to the customer, higher is the order volume! But never at the cost of profit! Cost reduction areas

Time waste is most difficult to correct because it doesnt litter the floor! Henry Ford
Waiting time operator, material, tool
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 Hunting time operator hunting for variety

of items!

Stalling delaying tactics by workers to

avoid starting a new job

Interrupted workloads planning

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i.

Overtime due to bad planning

Commitment of unrealistic delivery dates ii. Acceptance of too many rush orders iii. Delays in materials receipt

iv. Machine break downs due to frequent postponing of scheduled maintenance v. Manpower problems poor manpower plan
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 Unproductive time of machines - Material

handling problems

Higher Overhead costs effective OPC

releases supervisory resources for value adding work

Inventory investments (blocked capital) Lowered morale frequent stoppage of

operations due to bad planning
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Role of OPC (Importance of OPC)

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 Its role is advisory in achieving goals of right

quality, quantity and delivery It gives quantities of groups of major assemblies (products), subassemblies and parts in time frame OPC is an interface between marketing requirements, production requirements and materials requirements OPC is the brain of the operations function
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OPC is a staff function

 OPC provides decision making

support at three levels Level I: fit aligns all resources to fit the requirements Level II: sustainability develop sustainability in market, competitive advantage Level III: risk guard against impact of uncertainty
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Scope of Operation Planning & control Areas where OPC decisions are made 1.Materials: procurement planning Purchasing Inspection Storage Inventory control Standardization Variety reduction Value analysis
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2. Methods: Process plan sequence Tooling plan for tools, jigs & fixtures 3. Machines and equipment Relevant areas are Facilities planning Replacement policy Maintenance policy Maintenance schedules Tools manufacture maintenance 4. Manpower: skills, numbers, shifts
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5.Routing: determining the flow of work Processing steps m/c 1, m/c 2, m/c 3 Materials handling Temporary storage locations 6. Estimating: establishing operations times for workers and machines 7. Loading and scheduling: Allocation of jobs to machines as per routing and estimation to get maximum utilization Fixing delivery dates (calendar)
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8. Dispatching: Release of shop orders to commit raw materials Authorizing usage of resources by operations Making plan operational 9. Expediting: Chasing, follow up 10. Inspection: To maintain quality of product To evaluate the process and labour
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11. Evaluating: Evaluation of performance of machines, labour, process for management action Performance improvement 12. Cost control: Wastage reduction Value analysis Inventory control Resource utilization
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OPC makes what kind of decisions? What to produce? product planning Where to produce? facility planning When to produce? schedules Who will produce? man power plan How to produce? process plan How much to produce? production plan

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Organization of OPC function Factors which determine the OS 1. Status of the OPC in a company (i) if the nature of the work is repetitive and number of workmen is small, line staff would handle the OPC directly (ii) if the equipment is laid out as per sequence and machine capacities are same, OPC is a sub-function of Operations
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(iii) if the product variety is very large and a batch system is followed, OPC should be an independent function in par with other functions 2. The degree of centralization Centralized OPC is handled by staff specialists Line staff is free from planning activities But line staff are deprived of using their experience and skills in planning
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Should be considered when product variety is large and planning process is complex A decentralized OPC is handled by line staff Line staff contribute their expertise Suitable if planning is less complex 2. The internal structure The functions assigned to OPC

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Requirements of effective OPC system 1.computerized, fully integrated system 2. Quick response 3. Effective, efficient and economic 4. User friendly easy to operate 5. Flexible in the light of business environment 6. Ability to highlight variations as they occur 7. There must be minimum corrective actions 8. It must be proactive 9. Result oriented
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How does OPC attempts to meet the objectives?

Three stages in functions of OPC Stage I: Planning functions Stage II: Operations

Stage III: Control function

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Measuring effectiveness of OPC Delivery OTD (number of orders delivered on time against number of orders delivered Inventory management, Inventory levels Average inventory held annually Value of obsolete inventory Non moving items Surplus inventory Inventory turn over ratio
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 Production/operations management Planned production Vs actual Number of overtime hours Machine utilization ratio

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Functions of OPC
1. Order preparation Preparation of work order to operations department i. Samples, drawing or sketches ii. Engineering specifications iii. Sequence of operations

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2. Materials control
Job card preparation and issue i. Right material for the job ii. Material consumption at every stage of operation

iii. Scrap generation

3. Process planning 4. Tools control Record of available tools Tool life
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5. Scheduling
Preparing a time schedule for the process to meet commitment to customer 6. Dispatching Preparing documentation to authorize use of material 7. Progressing

8. Expediting
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Optional functions of OPC 1. Cost estimation (costing dept or Industrial Engg. dept) 2. Work measurement (Industrial Engg. dept) 3. Sub contracting (materials management) 4. Capacity planning (Engineering dept) 5. Demand forecasting (Sales dept)

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