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Production Planning and Control

What are the Objectives and Functions of Production Planning and
Control?
For efficient, effective and economical operation in a manufacturing unit of an organization, it is essential to
integrate the production planning and control system. Production planning and subsequent production control
follow adaption of product design and finalization of a production process.
Production planning is an activity that is performed before the actual production process takes place. It
involves determining the schedule of production, sequence of operations, economic batch quantities, and also
the dispatching priorities for sequencing of jobs.
Production control is mainly involved in implementing production schedules and is the corollary to short-term
production planning or scheduling. Production control includes initiating production, dispatching items,
progressing and then finally reporting back to production planning. In general terms, production planning
means planning of the work to be done later and production control refers to working out or the implementation
of the plan.

Objectives of production planning and control –

1. Effective utilization of resources

Production planning results in effective utilization of resources, plant capacity and equipments. This results in
low-cost and high returns for the organization.

2. Steady flow of production

Production planning ensures a regular and steady flow of production. Here, all the machines are put to
maximum use. This results in a regular production, which helps to give a routine supply to customers.

3. Estimate the resources

Production planning helps to estimate the resources like men, materials, etc. The estimate is made based on
sales forecast. So production is planned to meet sales requirements.

4. Ensures optimum inventory

Production planning ensures optimum inventory. It prevents over-stocking and under-stocking. Necessary
stocks are maintained. Stock of raw material is maintained at a proper level in order to meet the production
demands. Stock of finished goods is also maintained to meet regular demands from customers.

5. Co-ordinates activities of departments

Production planning helps to co-ordinate the activities of different departments. For e.g. the marketing
department co-ordinates with production department to sell the goods. This results in profit to the organization.

6. Minimize wastage of raw materials

Production planning minimizes wastage of raw materials. It ensures proper inventory of raw materials and
materials handling. This helps to minimize wastages of raw material. It also ensures production of quality
goods. This results in a minimum rejects. So proper production planning and control results in minimum
wastage.
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7. Improves the labor productivity

Production planning improves the labor productivity. Here, there is maximum utilization of manpower.
Training is provided to the workers. The profits are shared with the workers in form of increased wages and
other incentives. Workers are motivated to perform their best. This results in improved labor efficiency.

8. Helps to capture the market

Production planning helps to give delivery of goods to customers in time. This is because of regular flow of
quality production. So the company can face competition effectively, and it can capture the market.

9. Provides a better work environment

Production planning provides a better work environment to the workers. Workers get improved working
conditions, proper working hours, leave and holidays, increased wages and other incentives. This is because
the company is working very efficiently.

10. Facilitates quality improvement

Production planning facilitates quality improvement because the production is checked regularly. Quality
consciousness is developed among the employees through training, suggestion schemes, quality circles, etc.

11. Results in consumer satisfaction

Production planning helps to give a regular supply of goods and services to the consumers at far prices. It
results in consumer satisfaction.

12. Reduces the production costs

Production planning makes optimum utilization of resources, and it minimizes wastage. It also maintains
optimum size of inventories. All this reduces the production costs.

Other important objects of PPC are:-

 To plan production facilities in the best possible manner along with the proper systematic planning of
production activities.
 Providing men, machines, materials etc. of right quality, quantity and also providing them at the right
time forms a very important factor.
 To inform, about the difficulties or the various awkward positions expected to crop up later, to the
management beforehand.

Major functions of production planning and control

1. Planning
2. Routing i.e. determination of the manufacturing path.
3. Loading i.e. assigning of job to men and machine.
4. Scheduling i.e. establishing time for starting & finishing each operation or job.
5. Dispatching i.e. issue of orders.
6. Follow-up i.e. ensuring that work proceeds according to plans & there is no variation. This means to
ensure smooth flow of work.

Planning
The main function of the PPC is to plan everything, which mainly includes the planning, the organizing, the
staffing, the maintaining the control over the various things and also to maintain the coordination between the
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different departments. For the proper working of the PPC, it is very important to classify the various functions
of the manager in the suitable groups of the activities.

Objectives:-
 Production planning helps to estimate the resources like men, materials, etc. The estimate is made based
on sales forecast. So production is planned to meet sales requirements.
 Production planning results in effective utilization of resources, plant capacity and equipments. This
results in low-cost and high returns for the organization.
 Production planning helps to co-ordinate the activities of different departments.
For e.g.:- the marketing department co-ordinates with production department to sell the goods. This results in
profit to the organization.

Routing
Routing is one important function in production planning & control. It is useful for smooth & efficient working
of the whole plant or factory. It decides the path of work & the sequence of operations. The demand for a more
systematic method of carrying the work through the shop gave rise to the practice of routing. In fact, production
planning starts with routing which includes the following activities:

a. Determining the quality of the product to be manufactured;

b. Determining the men, machines & materials to be used;
c. Determining the types, number & sequence of manufacturing operations; &
d. Determining the place of production.

Routing has the following objectives:

1. It determines the sequence of manufacturing operations.
2. It ensures the strict adherence to the sequence so determined.
3. It strives for the best possible & cheapest sequence of operations.
4. It influences the design & layout of the factory building with a view to get quick & better production results.
5. It also influences the installation of plants & factory for better results.

Advantages of routing:
1. Well chalked out division of labor.
2. Production of goods according to schedule.
3. Maximization of productivity.
4. Interruption free production.
5. Reduction in cost of production.
6. Optimum use of all factors of production.
7. scientific layout of the plant.

Loading
Assigning specific job to men, machines and work centers as per their capacities is called loading.
In PPC, a loading chart is prepared for each work centre. Loading chart shows planned utilization of men and
material and machine available. It also helps to avoid over loading, under loading and bottle necks in the
production.
The following information are required for preparation of loading
 Time need for a job
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 Total work load

 Avaibility of labor ,material, machines
 Capacity of each worker and machine

Scheduling

Scheduling is concerned with time table of production. Scheduling arranges the different manufacturing
operations in order of priority, fixing the time & date for the commencement & completion of each operation. It
includes all requisites of production like scheduling of parts, materials, machines, etc. Perfect coordination
must exist between operations so that parts that are separately produced are brought to the final assembly in
right time. In brief, scheduling means fixing or deciding the amount of work to be done & fixing the time for
starting & finishing each operation. It is like a timetable of the production plan.

Essentials of master scheduling:

1. Inventory policy & position.
2. Procurement including subcontract.
3. Sales forecast.
4. Departmental manufacturing capacities.
5. Operations required & operations schedule.
6. Specific operations presenting critical path or imbalance of production flow.
7. Specific customer demands or delivery requirements.
8. Alternative delivery schedules.
9. Production plan including quantitative data.
10. Production standards.
11. Demand for finished products.

Uses of scheduling:
1. Scheduling is certainly a necessity in a large setup which produces a variety of products with numerous
components. The time within which products must be manufactured forms an important element in production
control.
2. Scheduling also determines the total time required to perform a given piece of work or assembly.
3. Time & motion study helps standardization of methods of work after a careful analysis of all the vital factors
surrounding the manufacturing processes.

Dispatching
Releasing orders and instructions for starting of production as per route sheet and schedule chart is called
dispatching. Dispatching is concerned with starting the processes & operations of production. Dispatching is
based on the route sheets & schedule sheets. Dispatching provides the necessary authority to start the routed &
schedule work. It is similar to putting oneself into the train after deciding the route of the particular train & the
destination.

Functions of dispatching:
1. To ensure that the right materials are moved from stores to machines & from operation to operation.
2. To distribute machine loading & schedule charts, route sheets, operation instruction cards & identification
tags for each works order.
3. To instruct tools department to issue the right tools, accessories & fixtures in time.
4. To authorize the work to be taken in hand as per the predetermined dates & time.
5. To direct inspection at various stages of production for inspection report.
6. To maintain proper report of the various subsidiary orders issued with each production order, for filing &
reference.
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7. To inform the follow-up section that production is starting.

Follow-up
Follow-up expedites the movement of materials & production process as a whole. It looks into determination of
the present situation boosting the department lagging behind & removing the bottlenecks in the production line.
Once production begins it is necessary to check that it is proceeding according to plan. Before dispatching new
orders to the manufacturing department the progress of outstanding orders must be known. There are certain
factors over which the manufacturing department has no control & hence follow-up is necessary. The most
important factors causing disturbances in production schedule are: excessive labor, absenteeism, machine
breakdown, errors in drawings, strikes, late delivery of materials etc. the function of follow-up is to maintain
proper records of work, delays & bottleneck. Such records can be used in future to control production.

Follow-up Documents:
Follow-up documents are prepared with the objective to identify the products. They also help to check
completion dates with due dates. They vary greatly according to the type of production. These documents
include the following information:
1. Labels with part numbers.
2. Order numbers mentioned on the article.
3. Number of products or batches of products.
4. Daily progress sheets showing the position of every order in process.
5. Reports showing orders behind schedule.

Production planning and control yields the following main advantages,

1. Avoidance of Rush Orders
Production is well planned and its time aspects are well controlled. Therefore, production control reduces the
number of risk-orders and overtime work on plant.
2. Avoidance of Bottlenecks
The incomplete work does not get accumulated because production control maintains an even flow of work.
3. Cost Reduction
Production control programs minimizes the idleness of men and machines, keeps in process inventories at a
satisfactory level, leads to a better control of raw materials inventory, reduces costs of storage and materials
handling, helps in maintaining quality and containing rejection and thus reduces unit cost of production.
4. Effective Utilization of Resources
It reduces the loss of time by the workers waiting for materials and makes most effective use of equipments.
5. Co-Ordination
It serves to co-ordinate the activities of plant and results in a concerted effort by workmen.
6. Benefits to Workers
Adequate wages, stable employment, job Security, improved working conditions, increased personal
satisfaction, high morale.
7. Efficient Service to Customers
it ensures better service to the customers by enabling production to be conducted in accordance with the time
schedules and therefore deliveries are made on promised dates
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OVERVIEW
Steps in Production Planning and Control

Production planning and control is one of the most important phases of production management, it is, as a
matter of fact, the nervous system of a manufacturing organization. In manufacturing organization, it is
essential that production is carried on in the best manner at the lowest cost, and the goods are of right quality
and are produced at the proper time. This can be ensured only through proper planning of production. but mere
planning of production will not solve the problem because production plans are not capable of self-actuating
and do not lead to automatic accomplishment. For that the production manager has to take certain steps like,
he has to regulate work assignment, review the work progress, and devise methods to bring conformity between
the actual performance and planned performance – so that plans chalked out are adhered to and the standards
set at the planning stage are properly attained and improved. This is the function of ‘production control’.
Production control, therefore, is a directive function which involves the coordination and integration of
operations and activities of different factors of production with a view to optimizing efficiency. Optimum
efficiency is attainable by proper planning of work, laying down of exact routes which operations shall follow,
correct fixing of time-table within which productive operations shall start and come to a close, uninterrupted
releasing of orders and work facilities, and timely initiation of appropriate follow-up steps to ensure smooth
functioning of the enterprise. In other words, production control involves planning, routing, scheduling,
dispatching and follow-up.

1. Planning

The first important step in production planning and control is concerned with the careful preparation of
production plans. Production plans determine what will be produced and where, at what type, by whom, and
how. For detailed planning of operations, the relevant information may be obtained from several sources in the
enterprise. Information about quantity and quality of products to be manufactured may be obtained from
customers’ orders and the sales budget, and information about production facilities may be obtained from the
management and the engineering department. Thus, the planning function formulates production plans, and
translates them into requirements for men, machinery and materials.

Whatever be the planning period, production planning helps in avoiding randomness in production, providing
regular and steady flow of production activities, utilizing production facilities to its maximum for minimizing
operating costs and meeting delivery schedules; coordinating various departments of the enterprise for
maintaining proper balance of activities, and above all, providing the basis for control in the enterprise.

2. Routing

The next important function of production planning and control is routing which involves the determination of
the path (i.e. route) of movement of raw materials through various machines and operations in the factory.
“Routing includes the planning of where and by whom work shall be done, the determination of the path that
work shall follow, and the necessary sequence of operations”. To find this path, emphasis is placed on
determining operating data, which usually includes planning of ‘where’ and ‘by whom’ work should be done,
the determinations of the path that work shall follow, and the necessary sequence of operations. These
operating data are contained in the standard process sheet which helps in making out a routing in the standard
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process sheet which helps in making out a routing chart showing the sequence of operations and the machines
to be used. If the machine loan chart indicates the non-availability of certain machines, alternate routing may
also be included on the routing chart. The most efficient routing may have to be compromised with the
availability of the machines at a particular time. In other words, “routing establishes the operations, their path
and sequence, and the proper class of machines and personnel required for these operations.”

From the above, it can be inferred that routing is one of the highly essential elements and prime considerations
of production control because many production control functions are closely related processes and are
dependent on routing functions. Thus, it is essential to solve the different problems concerning: appropriate
personnel; full utilization of machines; and determining with precise degree the time required in the production
process.

4. Scheduling

Scheduling is planning the time element of production – i.e. prior determination of “when work is to be done”.
It consists of the starting and completion times for the various operations to be performed. In other words,
scheduling function determines when an operation is to be performed, or when work is to be completed, the
difference lies in the details of the scheduling procedure. To work out effectively, the scheduling, as a part of
production control function, determines the time when each operation called for on the route sheet is to be done
on the specified machine in order to meet the desired delivery dates. Good control function directs not only the
time that each particular operation should start but also indicates the progress of each manufacturing part, the
amount of work ahead of each machine, and the availability of each machine for the assignment of new work.

Schedules are of two types: Master schedule and Detailed schedule. Activities, if recorded on plant-wise basis,
would be preparing master schedule, while mere detailed schedules are employed to plan the manufacturing
and assembly operations required for each product.

5. Dispatching

Dispatching is the part of production control that translates the paper – work into actual production. It is the
group that coordinates and translates planning into actual production. Dispatching function proceeds in
accordance with the details worked out under routing and scheduling functions. As such, dispatching sees to it
that the material is moved to the correct work place, that tools are ready at the correct place for the particular
operations, that the work is moving according to routing instructions. Dispatching carries out the physical work
as suggested by scheduling. Thus, dispatching implies the issuance or work orders. These work orders represent
authority to produce. These orders contain the following information:

 The name of the product;

 The name of the part to be produced, sub-assembly or final assembly;
 The order number;
 The quantity to be produced;
 Descriptions and numbers of the operations required and their sequence,
 The departments involved in each operation
 The tools required for particular operation; and
 Machines involved in each operation and starting dates for the operations.

6. Expediting

Expedition or follow-up is the last stage in the process of production control. This function is designed to keep
track of the work effort. The aim is to ensure that what is intended and planned is being implemented.
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“Expediting consists in reporting production data and investigating variances from predetermined time
schedules. The main idea behind expedition is to see that promise is backed up by performance”. It includes the
following functions:

1. Check-up to ensure that all materials, tools, component parts, and accessories are available at all work
centers in specified quantities for starting and carrying out manufacturing operations.
2. Check-up on the status of work-in-progress and completed work at various work stations. This includes
collecting information relating to the starting and completion time and date of work completed, status
of work-in-progress relative to scheduled completion dates, position of movements of materials,
component parts, and sub-assemblies within the plant, and inspection results.
3. Preparation of progress records and keeping the control boards up-to-date.
4. Reporting to manufacturing management on all significant deviations so that corrective action may be
taken. It also includes reporting to production planning department so that future plans may be
adjusted.