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Production Planning
Introduction

& Control

Introduction to Production: Definition: Production is any process or procedure developed to transform a set of inputs like men, materials, capital, information & energy into a specified set of outputs like finished products & services in proper quantity & quality, thus achieving the objectives of an enterprise. The essence of production is the creation of goods & services, may be by the transformation of raw materials or by assembling so many parts. Production in everyday life can be seen in factories, offices & hospital etc. Production System: A production system is the design process by which elements are transformed into useful products. A process is an organized procedure for accomplishing the conversion of inputs into outputs. Inputs Men Machine Materials Money Management Information Transformation Goods & services Conversion process Output

Factors of production: 1. Land & other natural resources 2. Labour (Human efforts) 3. Capital (Factory, Building, Machinery, Tools, Raw materials etc) 4. Enterprise Production Function: Production function may be defined as the relation between quantity of output furnished or given out by a productive process & the quantity of different inputs used in that process. Mathematically, P = f(M1,M2,M3Mn) Where, M1,M2,M3Mn are inputs
And P is output Productivity: 1. Productivity is a function of providing more & more of everything to more & more people with less & less consumption of resources.

2 2. The volume of output attained in a given period of time in relation to the sum of direct &
indirect efforts expended in its production.

3. Productivity is the measure of how well the resources are brought together in an
organization & utilized for accomplishing a set of objectives. 4. Productivity is concerned with establishing congruency between organizational goals with social aspirations through input-output relationship. 5. Productivity is the multifier effect of efficiency & effectiveness. Productivity can be expressed as: Productivity = (Output/Input) Productivity can be increased: 1. When production is increased without increase in inputs. 2. The same production with decrease in inputs 3. The rate of increase in output is more compared to rate of increase in input. Math: A company produces 160kg of plastic moulded parts of acceptable quality by consuming 200kg of raw materials for a particular period. For, the next period, the output is doubled 320kg by consuming 420kg of raw materials & for the third period, the output is increased to 400kg by consuming 400kg of raw material. Find out the Productivity at different period & comments it? Ans: For the first period, Productivity = (Output/Input) x100 = (160/200) x 100 = 80% For the second period, Productivity = (320/420) x100 = 76% For the third period, Productivity = (400/400) x100 = 100% Dynamics of Productivity change:

Improvement in Productivity

Increase in wages

More output

Increase in Demand for Goods & services

Better machines

Production in Product cost

Lowering of prices

Greater employment

Higher investment

More profit

More saving

Productivity improvements results in lower cost per unit by effective utilization of all the resources & reducing wastage. Lower cost per unit contributes to increased profit levels so that company can reinvest the surplus in new technology, equipments & machines. This will result in further productivity increase & also there is a greater employment generation due to new investments. The Productivity increase results in higher wages to the employee as profit potential of the company increase thereby increasing purchasing power of the worker. Productivity measures:

Partial Productivity measures (PPM), Partial Productivity = (Total Output/Individual Input)

1. Labour Productivity = (Total Output/Lobour Input) 2. Capital Productivity = (Total Output/Capital Input)
3. Material Productivity = (Total Output/Material Input) 4. Energy Productivity = (Total Output/Energy Input) Total Productivity Measure (TPM) : Total Productivity = (Total tangible output/Total tangible input) Total tangible output = Value of finished goods produced + value of partial units produced + dividends from securities + interest + other income Total tangible input = value of (human + material + capital + energy + other inputs) Factors influencing productivity : Two categories: a) Controllable or internal factors b) Non-controllable or external factors Controllable or internal factors: 1) Product 2) Plant & Equipment 3) Technology 4) Materials 5) Human Factors

6) Work methods 7) Management Style 8) Financial Factors 9) Sociological factors

Non-controllable or external factors: 1) Structural Adjustments (Economic & Social) 2) Natural resources 3) Government policy 4) Infrastructure 1) Product factor: In terms of productivity means the extent to which the product meets output requirement. Product is judged by its usefulness. The cost benefit factors of a product can be enhanced by increasing the benefit at the same cost or by reducing cost for the same benefit. 2) Plant & Equipment: these play a prominent role in enhancing the productivity. The increased availability of the plant through proper maintenance & reduction of the idle time increase the productivity. 3) Technology: Innovative & latest technology improves productivity to a great extent. Automation & information technology helps to achieve improvement in material handling, storage, communication & quality control. 4) Materials & energy: Efforts to reduce materials & energy consumption bring about considerable improvement in productivity. 5) Human Factors: productivity is basically depend upon human competence and skill. Ability to work effectively is governed by various factors such as education, training, experience of the employees.

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6) Work methods: Improving the ways in which the work is done (methods) improves productivity. 7) Management style: these influence organizational design, communication in organization, policy & procedures Non-controllable or external factors: Natural resources: Manpower, Land & raw materials are vital to the productivity improvement. Government & Infrastructure: Government policies & programme are significant to productivity practices of government agencies, transport, & communication power, fiscal policies influence to the greater extent. Structural Adjustment include both economic & social change. Economic changes that influence significantly are: a) Shift in employment from agriculture to manufacturing industry b) Import of technology c) Industrial competitiveness Productivity improvement technique: Process Based Technology Based Material Based

Product Based

Productivity improvement technique

Employee Based

Task/Management Based

Technology Based:

Employee Based:

Material Based: 1.Material planning & control 3.Material storage 4.Source selection & procurement of quality material 5.Waste elimination 6.Material recycling & reuse

1.CAD,CAM,CIMS 1.Financial & Non-financial 2.Robatics incentives at individual/group levels. 2.Purchasing,logistics(transport) 3.Laser technology 2.Emploee promotion 4.Modern maintenance 3.Job design, job enlargement, technology job enrichment 5.Energy technology. 4.Worker participation in decision 6.Flexible making manufacturing 5. Quality circles technology 6.Personal development

Process Based: 1.Methods Engineering & Work simplification 2.Job design, job evaluation, Job safety 3.Human factors engineering.

Product Based: 1.Value analysis & value engineering 2.Product diversification 3.Standardisation & simplification 4.Product Mix & promotion

Management Based: 1.Management style 2.Communication in organization 3.Work culture 4.Motivation 5.Promoting group activity

Manufacturing System: Types of production: There are basically three(3) types of production: 1. Job production system 2. Batch production system 3. Continuous production system Job production: This is the manufacturing of product to meet the specific customer requirement of special order. The quantity involved is small & is normally concerned with special project, model, prototype, special machinery to performed specified task. There are three(3) types of Job production: 1) A small number of pieces produced only once. 2) A small number of pieces produced intermittently when the need arises. 3) A small number of pieces produced periodically at the known time interval. Batch production: Batch production is the manufacturing of identical articles, either to a specific order or to satisfy continuous demand. When the production of the batch is terminated, the plant & the equipment are available for the production of similar or other production. There are three(3) types of Batch production: 1) A batch production only once 2) A batch production produced repeatedly at irregular interval when the need arises 3) A batch production periodically at known time interval. Advantages of batch production: 1) This method is useful for a factory that make seasonal item or products for which it is difficult to forecast demand. 2) This method can reduce initial investment because a single production line can be used to produce several products. Disadvantages of batch production: 1) Machine has to stop after certain interval causing work stop. 2) Due to repetitive works, the workers get demotivated causing quality/production low. Continuous products: Continuous production is the specialized manufacturing of identical articles on which the equipment is fully engaged. Continuous production is normally associated with large quantities & high rate of demand. Continuous production is justified only when its rate cab be sustained by the market (Example-fertilizer, electricity etc) There are two(2) types: (1) Mass production, (2) Flow production Mass production: Mass production is known as repetitive production, is used to producers who need to create more standardized products in large quantity. Example- Automobiles, TV, personal computer, most common consumer goods. Advantages: 1) Low per unit cost 2) Ease of manufacturing & control 3) Speed Disadvantages: 1) High cost of equipment 2) Under utilization of human capabilities 3) Lack of responsibility to individual customer.

Flow production: Flow production system are used for very high volume commudity products that are very standardized. This system is highly automated & it typically in operation continuously 24 hours a day. Example-Steel, paper, paint, chemical, & foodstuff are produce by continuous production system. Advantages: 1) Higher efficiency 2) Ease of control 3) Massive capacity Disadvantages: 1) Large investment in plant & equipment 2) Limited variety of item can be process 3) Inability to adapt to volume changes.

Pre-planning production Equipment policy Factory layout