production planning and controll

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