Production planning and control
“Customer is the most important visitor on our
premises. He is not dependent on us, we are dependent on him. He is not an
interruption on our work. He is the purpose of it. We are not doing a favour byserving
him. He is doing a favour by giving us an opportunity to do so.”
Mahatma Gandhi
Customer- (Customer
means purchaser) our customer is our king. It is the customer’s order which
sets the wheel of our production rolling. Customer’s order give us work,
Customer’s order give us work, customer’s order give jobs to our workmen.
Customer’s order gives dividends to our shareholders. Hence customer must be
satisfied. Only satisfied customers give us new order. A firm which aims at
customer’s satisfaction is never short of business.
Then
question arises:-
1
How to keep a
customer satisfied?
2
What does a new
customer expect from us?
3
What does an old
customer expect from us?
Answer:
A customer who is new or old, expect five things
from us:-
·
Reliable yet
reasonable delivery commitment.
·
To be advised in case
of delay.
·
To be helped when he
is in difficulty.
·
Consistent good
quality of products.
·
Competitive rates.
How does Production, planning and
control enable the firm to achieve these objectives?
1 Reliable yet reasonable delivery commitment:-
It is a key point that a good
production, planning and control system is a must for a firm to enable it to
make reliable promises and then to achieve them.
The first thing that a customer expects from this
supplier is to make reliable yet reasonable commitment and then to stick to it.
To give a delivery commitment is not an easy task. It requires analysis of many
factors. The vendor must check as to what the load is on hand and how early the
job can be started for the first operation, second operation and subsequent
operations. He must plan well the requirements of various factors of
production. He must ascertain that materials are available, what materials are
need to be procure, how much time it will take to procure materials.
He must check as to what cutting tools, threads,
sole, insole, adhesives are available and what shall have to purchase and how
many time it will take for purchasing. Only after considering all the above
aspects a delivery commitment should be made failing which the commitment is
unlikely to be kept up.
To perform the above function, efficiently, production
planning is a must. Once a delivery commitment is made; the vender must survive
hard to meet the delivery commitment. To do that, he must ensure that proper
instructions are given to each concerned department. He must follow up with
purchase to ensure that materials are received on time and are allocated as per
requirement. He must plan the activities of the tool room and do sufficient
follow up to ensure that all the materials are made available to production on
time. Also leather, lining, cutting tools or dies, threads, sole, insole,
adhesives or any other materials must be issued at the right time and in right
qualities. Lastly, he must see that jobs are started and completed as per plan.
Action on these lines, which forms control aspect of production, planning and
control, therefore is necessary to meet delivery commitment.
Many a buyer periodically mail, “revised delivery schedule” to their vendors
where in the revise the quantities of some of the items ordered on the vendors.
Such amendment will require reallocation of factors of production, procurement
of additional materials, splitting of planned batches, overtime working,
subcontracting of some items currently being made at the home plant and vice
versa. The buyer does not bother what his vendor does to adjust his new
schedules. He wants his items regularly and as per dates promised. The vendor’s
success at such a juncture will mean a satisfied customer who is sure to stick
to the company for a long time.
2 To
be advised in case of delay: - Manufacturing is never a smooth process. Some
delays and interruptions do crop up and tend to hold the timely completion of
the jobs. Some sort of reporting system is required to identify presence of the
delays and interruptions. A rational approach will be to check up the progress
of work, record of progress of work, compare progress against plan, identity
deviations from plans and expedite wherever necessary to bring the progress of
work in line with the plan. This important
function which is called “Progressing” is the backbone of production,
planning and control.
Some situations may arise when
things are extremely beyond the control of the supplier and no amount of
exertion on his part will enable him to stick to the promised date. Some of the
events which are lickly to upset his plans are-
·
Materials required
for the items are not received on time.
·
One or more machines,
required manufacture, breakdown.
·
Heavy process
rejection due to errors in drawings and others.
·
Occurrence of some
acts of god such as flood, fire, etc.
·
Absence of key
operators.
·
Major accident in the
factory.
·
Go slow, tool down
strike or strike or similar other labour problems.
What
should the supplier do under such a situation? He just cannot supply according
to schedule. One way to get a customer really mad is first not to supply on
time and then not to communicate with him. And this is the second thing which
the customer expects from a supplier. He expects to be advised when the
supplier cannot supply as per promise.
Will not the buyer go wild on receiving
the supplier’s letter? Yes he will! He is sure to explode and use all the
filthy language on the earth. And the next perhaps the customer will like to
know when the supplier is going to ship next. And the next perhaps the customer
will like to know when the supplier is going to ship next. And this date- the
second date- the supplier just can’t afford to miss unless he wants his
customer to break away from him. To ensure that the second date is kept up, the
supplier should know how for the things have gone bad and how much time will it
take to bring them back to normal once again. This requires reporting
mechanism, the control aspect of production, planning and control.
3 To
be helped when in Difficulties: - A customer wants occasional special flavors.
He wants his supplier to entertain his occasional rush orders when he is in
difficulty. A rush order, however, not be accommodated at the cost of regular order.
Some rush orders could to taken up, but too many rush order on the other hand
may upset the whole plan and result in broken deliveries of others. Here also
supplier requires planning. At the first instant, he must know how many such
orders can be accommodated without disturbing the basic plan. This is what a
good production planning and control aims at.
4 Consistent
good quality:- Quality control is said to be an integrated function.
Quality of end product depends on the quality of its input which may be either
in the form of quality of purchased items or quality of items manufactured at
the home plant. Quality control department, no doubt has the overall
responsibilities of quality of raw materials, brought out components, tools,
sole, insole, adhesive and better quality of finishing materials and other
supplies of purchased materials. The quality of piece parts depands on how a
“Process man” does the quality planning in his manufacturing plans.
The
quality of jobs depends on:
(a)
Proper operations and their sequence:- Only
proper operations and their logical sequence can keep the defectives at its
minimum.
(b)
The right selection of the machine:- Good
quality can be achieved only opn machines which have the right process
capability.
(c)
Right selection of Cutting Tools:- Cutting
dies of upper and lining, proper quality of threads for stitching, dies of sole
and Insole and lasts should be in good quality. Because good quality tools
cannot give unsatisfactory results.
(d)
Proper location of inspection stages:-
Manufacture demands that defectives are removed and unnecessary costs are
prevented from being extended in further operations.
(e)
Revision in the manufacturing process:- Based
on the results of the pilot plants, revision in the process is made with the
objects of learning from our mistakes and avoiding the faults in future.
Hence
production, planning and control is essential to advice methods which will
ensure selection of right equipments, right tooling and enable the shop to make
the job in the simplest but in full proof way.
5 Competitive
rates:- the vendor shares of buyer’s total requirements also depends on the
former price. The lower the vendor rates, the higher is the share of buyer’s total
requirements. There have been numerous cases where good orders were lost because
of rate differences. Vendor should not take up an order which does not give him
reasonable profit but at all the same time he should realize that he cannot be
paid higher to compensate for the inefficiencies of his operations. To be on
sound footing, each vendor must keep its cost at their minimum so that the
desired profit can be achieved.
Price =
Allowable cost + Desired Profit
Having
known the allowable cost, the supplier evolves the manufacturing process to
contain his costs within allowable limits. To do that, waste of time in its
various forms must be reduced to their minimum.
The
following nine costs can be cut through better production, planning and
control:-
(a)Waiting Time:- Ion footwear industry a
closer look around the department can enable us to spot some of these time
leaks. We will find some of our operatives waiting at the tool crib. Some may
be waiting for raw materials. Other may be waiting for cutting dies. Yet there
may be some waiting for sole, insole and adhesives. These little time leaks, if
considered in isolation, do not mean much but too many of these can certainly
add to a large amount, may be larger than few big ones. To reduce waiting time,
each operative and each supervisor must know what the next job is? Hence
necessary required leather (upper & lining), cutting dies, tools and other
materials must be kept ready well in advance.
(b)Hunting Time:- “ An operative ia an
engineering concern spends more than 2 % of his time in wondering or looking
for the things he need to do the jobs.” We will find them, they sharing their
tools with other operators. Lot of operatives’ time is wasted in searching for
particular tools like (upper and lining dies) required threads, proper size of
sole and insole. We can reduce this effective time by fixing right place for
everything and providing our men to set of everything they need well in advance
of starting of the job. Good PPC can convert some of these time leaks into
useful production hours.
(c)Stalling:- “ Workers usually try to
coincide the end of their jobs with the end of the day by stretching the jobs
in hand.”
A
worker usually tends to delay the completion of jobv so that he does not need
to start fresh jobs towards the end of the day, “ Why start now, I would not
able to finish it in my shift” is the commonest attitude among our workman. We
can somewhat avoid this by setting the system where by each workman knows when
he is expected to complete the job-in-hand and what is his next work
assignment. Scientific scheduling can do this.
(d)Interruption Workloads:- “ Unplanned
overlapping of operations leads to idle machines and job split-ups.”
Interruption
work from the previous operations not only results in partial utilization of
the next machine but also seriously undermine morale of the shop. Careful PPC
can prevent such losses of time.
(e)Costly Overtime:- “ Poor planning is
the common cause of overtime.” Prolonged overtime is not merely the extra
strain on the finance of the company but means much more. Excessive overtime
and hence extra time earnings make the workers accustomed to a new standard of
living and any action on the part of the management to reduce or discontinue
overtime is disliked by the workers. The more knowledge that the company
intends to do away with the overtime make the workers slow their pace and in
general waste time.
The
jobs under such situations start falling behind the schedule and thus the
company is forced to overtime working. It then becomes a vicious circle and
once caught in it, the company cannot come out of it. The workers go on
overtime day after day and month after month and thus worsening the already
worsned situations.
The
need of overtime arises due to:-
·
Unrealistic delivery
dates without there being any leeway for unforeseeable.
·
Acceptance of too
many rush orders.
·
Frequent delays in
receipt of materials.
·
Excessive machine
breakdown.
·
Lack of qualified
workers.
·
Insufficient manpower
or machines.
The
majority of the causes cited above can be avoided by proper planning.
(f)Unproductive time of machines:- “ Productivity
of factors of production to a large extent depends on the quality of
supervision.”
The
prime responsibility of the supervisory staff is to ensure that the company
machines work for maximum time and loss of time due to different reasons is
kept at minimum. The productive time of the machines is lost due to weakness in
one or more of the following supervisory functions:-
·
Operator’s
unauthorized absenteeism and the failure of the supervisor to make substitute
arrangement.
·
Enforced idle time of
the machine for want to smooth movement of materials on the flour.
·
Lack of effective
supervision which caused idle time of the machine since operator visit
unnecessarily place of personnel work, steal longer tea breaks, resume work
5-10 minutes late in the beginning of the shift and after lunch break and close
work 10-15 minutes before to lunch break and the end of the shift.
·
Idle time of the
machines due to delay action by the supervisor to trace defects to the source
and stoppage of the machines by the workmen until then.
Wastage in factors of production not only because
of poor quality of supervision but also when the supervisory staff gets
burdened with routine functions namely materials planning, tools planning,
movement of materials on the shop floor, machine loading etc.
PPC relieves supervisory staff from clerical
functions and thereby enable them to spend more time for training of workmen,
proper allocation of work to workmen, trouble shooting and maintaining shop
discipline.
(g)Higher Overhead costs:- PPC as
concluded that supervisory staff, gets more time for training of workmen,
trouble shooting, maintaining shop discipline and improving methods of work. At
the same time they can handle more workmen and more machines, which reduces
supervisory overheads.
(h)Poor Labour Efficiency:- Many a times a
large companies, jobs get delayed due to irregular deliveries of materials,
interruptions at the preceeding operations, lack of smooth flow of materials,
delay instructions from the supervisors, improper loading and scheduling, lack
of sufficient volume of work etc. and as a result workmen are either rendered
idle or are utilized for part of time. And if such delays are frequent, workmen
get accustomed to partial working and thus the efficiency on the shop floor
suffers a setback. They even do not work continuously when sufficient work is
available.
Hence
PPC prevent such a situation by exercising better control on availability of
tools and materials, monitoring a close control on work in progress on the shop
floor, re-allocating jobs from other machines by shifting idle operator to
other machines, changing the route, ensuring smooth movement of materials from
and into different shops and reporting cases of idle time of men and machines
to enable the schedule to release new jobs.
(i)Investment in Inventories:- Good PPC
can help the firm to ensure continuity in production with minimum inventory
investment. The higher inventory investment results if the requirement of
materials is not intended on time and also if materials on receipt are not
allocated properly to the work orders keeping job priorities in sight. Shop
personnel can neither do forward planning of materials nor can they keep track
of receipt and issues of materials. Only a centralized agency such as PPC can
coordinate the activities of shops, stores department and the buying
department.
Status of the PPC Department in the company:-
The
status of PPC in the company depends upon the company’s manufacturing process.
1
If the work is highly
repetitive and the number of workmen is not very large, the work of planning
may be performed directly by the line staff. There being no formal PPC
department in the company.
2
And the manufacturing
units where plant and machinery is laid out as per sequence of operation and there
is little difference in machine capacity for different products, the PPC may be
sub-division of the manufacturing department.
3
In firm, where either
the product variety is very large or where machine capacities are different for
different products, or where plant and machinery is laid out as per function in
different department not related to each other. PPC should be set up as an
independent department with head of department responsible to the Managing
director, General Manager or works manager depending upon the magnitude and
complexity of the planning functions and size of the firm.
The degree of
Centralization:-
The
degree of centralization implies extent to which planning activities are
performed by PPC. Two systems in general are available:
1 Centralized planning where the functions of
production planning are controlled centrally by staff specialists.
2 Decentralized planning where planning is carried
out by line staff who directs normal work in their respective departments.
Both
types of planning, centralized as well as decentralized planning have their
advantages and disadvantages. The centralize planning takes away the burden of
planning from the line staff thus leaving them free to handle men and machine
more effectively.
Decentralized planning gives line
staff sense of participation and opportunity to use their experience but it
takes away lot of valuable time in performing planning function.
The degree of centralization should
be greater if the product variety as well as the number of sub assemblies
before getting the end product is large. Greater degree of centralization is
also recommended if the number of workmen is large and work is performed on
machines which have different capacities for different products. On the
contrary, low degree of centralization is desirable when there are number of
ultimate parts and sub assemblies in the end product and work is carried out by
a small group of operators engaged on machines and in departments which are
related to each other.
The Internal Structure:
Internal
structure implies the functions to be assigned to PPC which depends on the
nature of industry, size of company and management policies. Different
companies assign different functions to its PPC department. It is common
practice to assign following functions to production department.
1
Order Preparation
2
Material Control
3
Tools Control
4
Process Planning
5
Scheduling
6
Dispatching
7
Progressing
8
Expediting
Few
companies assign following four areas also to PPC department:-
·
Cost Estimation
·
Work Measurement
·
Sub- Contracting
·
Capacity Planning
The
functions actually to be assigned depend on the size of the company. This
aspect also considers assigning of various functions of production control to
different cells which again depends on the size of company. In a medium size
industry, there may be following important cells in PPC.
·
Materials control
cell
·
Tools control cell
·
Process planning cell
·
Scheduling cell
·
Dispatching cell
·
Progressing cell
·
Cost Estimation cell
·
Sub-contract cell
·
Work measurement cell
Each
cell may need by a senior Engineer and supported by one or two planning
assistants and clerks.
PPC-
An Integrated Function:-
PPC
is a staff staff function. Its effectiveness cannot be directly and
quantitatively measured. Improved efficiency of producting section, lower cost
of production, timely deliveries to the customer, lower inventory investment
etc. are some of the basic effectiveness of this department.
On the other hand, frequent broken
delivery promises, underutilization of men and machines, wastage of labour and
materials, mounting inventory level, excessive overtime, frequent rush orders,
ignorance of the status or various accepted orders etc. are the reflections of
either.
1
Ineffective planning
and control by production, planning and control.
2
Inefficient execution
of plans by the producing sections.
3
Inefficient working
of departments like, sales, design etc.
4
Acceptence of
frequent rush orders and failure of the sales department to secure proper lead
time from customer.
5
Lack of co-operation
between PPC and other service department.
Hence
it is clear that due to dual casuality factors, it is difficult to fix
responsibility on any department for the ineffective performance. At the same
time, a factor that emerges undisputed is that a close cooperation from other
department is necessary to ensure efficient and smooth functioning of PPC
department and that is why, PPC should be looked upon as an integrated
function.
PPC is expected to satisfy number of
requirements, some of which are of conflicting nature:-
·
Sales Personnel
generally aim to satisfy their customer and try to insist on last minute
changes in production plan to accommodate rush orders. There are always to
ensure that deliveries are kept.
·
Productional
personnel insist on plenty of prior notice, longer production runs and
sufficient inventory of materials.
·
Purchase department
expects adequate notice of requirements of brought out components and
materials.
·
Finance department
expects that stock do not exceed budgefed values.
·
R & D Department
insists on incorporating design changes or modifications without bothering
about the disruption that changes may cause in production schedules.
PPC
department is discharging its planning, coordination & control
responsibilities needs active cooperation of various other departments of the
company. These departments and their areas of cooperation are detailed as
under:-
1
Sales Department:-
Active cooperation and timely communicatin between sales and PPC department is
of crucial importance in the under mentioned area.
·
To give quote price
and delivery sales must consult PPC to know average lead time that will be
needed if potential customer awards the order.
·
On the receipt of
buyer purchase order, sales must pass on the information immediately to PPC so
that the later can initiate action at the earliest.
·
To prepare order
acceptance, sales must go delivery period (only tentative period should be
given at the quotation stage) confirmed from PPC.
·
PPC should provide to
sales status and the progress of varios order.
·
PPC should report to
sales when delivery dates to a particular customer is likely to be missed so
that the customer can be informed.
·
Sales department must
not accept a rush order until and unless PPC department is convinced and the
later is really in a position to handle it without causing too much disturbance
in their initial planning. Sales personnel therefore should develop the art of
saying “no” so that they can say “no” when situations demands so.
·
Buyer’s feedback on
quality, buyers inspection reports must be passed on PPC immediately, so that
corrective action is taken on time.
·
New schedules,
amendments, cancellations and design changes received from buyer’s must reach
PPC at the earliest.
2
Design Department:-
Design department plays an important role towards bringing effectiveness in the
PPC department.
·
The design department
must take into consideration the process capacity of the available machines.
·
Design changes, if
any, must be intimated by the earliest to PPC.
·
The design tolerance
of the items difficult to manufacture may be reviewed on request from PPC and
be relaxed if such a change will not impair functional reliability of the
product.
3
Inspection and
quality control department:- Inspection and quality control has a major
contribution to make work of PPC effective:-
·
Inspection should
provide immediate feedback on the quantity of goods produced, rejected and the
quantity that is reworkable to PPC by forwarding inspection report.
·
Inspection results of
first few pieces produced after the “fresh machine tool set up” should be
conveyed immediately so that set-up time is kept at minimum.
·
Inspection of jobs
prior to key operation, or prior to critical operation or prior to their
transfer to another department should be conducted without loss of time and
unnecessary delay in starting the next operation is avoided.
·
Job being run
simultaneously on more than one machine for overlapping operations must be
cleared for inspection very fast at the stage inspection , so that time lost
due to continous flow of materials to succeeding machines is kept at minimum.
·
Errors in dimensions
observed by the shop inspectors should be communicated immediately to PPC.
·
Quality control
should assist PPC in deciding the type of inspection aids for each new job.
·
Quality control man
should give immediate feed back on the defects known after visiting to the
customer’s plants or after attending to customer’s complaints especially when
such defects can be avoided by modifying the manufacturing process of the item.
4
Purchase and Store
Department:- The confirmation of the delivery commitments to a large extent
depends on the cooperation of purchase and stores department.
·
Purchase must get
advance information on the raw materials and tools that require to be purchased
before the scheduled start of the job.
·
Purchase section must
keep PPC posted on the progress of purchase orders and expected delays etc. so
that the alternative course of action can be suggested in time.
·
Purchase department
must keep PPC abrest of market situations so that forward buying of certain
items can be suggested by the later considering long term schedules of the
regular customers.
·
Purchase department
should intimate immediate action on receipt of revised schedule from PPC.
·
Purchase department
should provide periodically to PPC information on lead time of different items,
especially when lead time are extended.
·
Purchase department
must act immediately on receipt of revised schedules and changes in
specifications etc. from PPC.
5
Stores Department can
help PPC by:-
·
Ensuring that
sufficient stock of tool and materials of regular use are maintained.
·
Records to enable PPC
to know at any point of time the stock of a material that is available or has
been allocated to different shop orders etc.
·
Stock taking of
important materials and tools- A & B clacc- to ensure that shown in the
stock card and the physical stock tally with each other.
6
Tool Room:- room can
assist PPC by making tools and gauges available in the right quantities before
the scheduled start of the job.
7
Maintanance
Department:- Maintanance department can assist PPC in a big way by:
·
Attending on top
priority the machine in vital and essential categories.
·
Providing information
on inspection schedules replacement schedules, servicing and overhauling
schedules.
8
Personal
department:- Personal department must
provide PPC with statistics on average absenteeism of the operators in
different sections in different months of the year:-
·
Keep PPC informed of
Holidays, dismissals, hirings etc.
·
Provide information
to PPC regarding notification of electricity boards concerning periods of load
shedding, power cut etc.
9
Manufacturing Shops:
Last but not the least, the maximum cooperation need to come from the manufacturing
shops. They can assist PPC by:-
·
Preparing detailed
work assignment to each workman.
·
Consulting and
accepting suggestions of the planning staff in matters related to overtime,
changes in job priority, job splitting, shifting of equipments from lower
priority production oreds etc. in order to expedite the remaining operations of
a delay job.
·
Exercising control on
sanctioning of leaves, to workmen and ensuring that substitute arrangements are
made prior to sanction of leaves to workmen.
·
Notifying PPC of the
damages done to jigs and fixtures so that replacement or repair action is taken
on time.
·
Making suggestions
regarding changes in machines and manufacturing processes so that further
economy and efficiency in manufacturing processes is obtained.
·
Motivating the
workmen in different shops so that better performance against labour standards
is maintained.
·
Verifying daily
production reports prior to their movement to PPC to ensure that reporting of
actual progress of work is correct.
A Representative
PPC Department in medium size firm
