Post on 07-Apr-2018
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Operations Planning and Control
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PRODUCTION/OPERATION
PLANNING &CONTROL
PRODUCTION/OPERATIONPLANNING
PRODUCTION/OPERATION
CONTROL
Interrelated functions, often treated as one
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Activities of OPC
Operations planning pre-operations
[Operations implementation]
Operations control during operations and
post operations
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Operations/Production Planning
Pre operation activity
Essential prerequisite to production &
production control
Planning all activities from what to produce,
to product delivery
5W-1H on production/operation
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OperationsPlanning
Productplanning
Processplanning
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Product planning
(A company designing their product andmaking)
What to produce?
Market requirements, market surveySales forecast
Value engineering
Product design
Bill of Materials (BOM)
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Process Planning
How to produce?
Planning of Production ProcessOrganization of
production system?
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OUTPUT
INPUTS
FACILITYCAPAITL
ENERGY
LABOR
MATERIAL
ELEMENTS OR SUBSYSTEMS
OBJECTIVES
Production/Operation System
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OPN IINV
Q C D
INSPOPN II OPN III
Q C D
Q C DQ C DQ C DR/M
Machines, tools, drawings, instruments, utilities
HR
PARTS
OUTSOURCING
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Tooth powder can
End component oval shaped body
Seamed body
shoulder neck
crimped shoulder
Oval powder can
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Store
Trim
Slit
endsBody
maker shoulders necks
end seame
r crimping
Pack Pack
Tin plates Inks coatings &
consumables
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Roller
bearings
Outerrace
Innerrace
Cages Rollers
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Coldforging
EN31Steel wire
Coil
Heattreatment
Grinding
Superfinishing
ROLLERS
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Turning
EN31Steel bars
Heattreatment
Grinding
Superfinishing
OUTERRACES
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Turning
EN31Steel bars
Heattreatment
Grinding
Superfinishing
INNERRACES
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Punch-ing
EN31Steel
sheets
CAGES
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ROLLERSOUTERRACES
INNERRACES
ASSEMBLY
CAGES
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Organization of production systemObjectives?, outputs?, elements?, inputs?
Objectives
What to make? Quality standards
How much to make? Quantity
When to deliver? Lead-time
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Outputs to meet objectives as aboveInputs
Raw materials Bought out parts
Human skills
Utilities
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Subsystems or elements of production Equipment
Layout
Material handling
Nature of operations Sequence of operations
Standard times
Utilities
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Factors influencing production planning
Volume & variety - Nature of the production
system
Product process matrix
Nature of the production process
Mass production?
Batch production?Job shop?
One off?
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Objectives of production planning
To provide an effective and efficientphysical system for production
On the basis of sales forecast and itsengineering analysis for high quality and cost
effective production
Estimate resource requirements
Estimate when and where they are required
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Make arrangements to meet production
targets with flexibility to meet marketdynamics
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Procedure for production planning
1.Demand forecast2.Specification of production requirement
Demand Vs Capacity (equipment & labour)
Process of production, sequence, route etcOutsourcing
Delivery schedule
Production scheduleProcurement schedule
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Setting production rate
Sales requirement and resultant work load
on the operations Daily production?
Capacity of production lines?
Manpower requirement?
Shifts planning?
Overtime?
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Production/Operations control
Post production planning, during productionand post production
Functions of production control
(importance, role)
1. Ensuring Quality, Quantity and Delivery of
parts, subassemblies and products (majorassemblies)
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2. Feed back to management on productionactivity, C/CA/PA taken
3. Maintain high level of productivity, effectiveutilization of resources
4. Ensure minimum cost and high customer
service
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Benefits of production/operation control
Profitability through
1. Balanced inventory levels of R/M, WIP,F/G inventory cost reduction
2. Effective utilization of equipment, tooling,
manpower, manufacturing and storagespace - productivity
3. Reduction in setup costs lead-time &cost reduction
4. Reduction scrap & rework costs costreduction
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Competitive advantage
1. Reliable delivery to customers
2. Shorter customer lead-time
3. Pricing flexibility through lower productioncosts
4. Orderly planning & control for marketing ofnew products
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Elements of production control
1.Control of planning availability of sales
information, BOM etc. on time2.Control of materials procurement
schedules
3.Control of tooling
tools & dies readiness4.Control of manufacturing capacity
utilization of equipment capacity
5.Control of activities issuing orders andschedules
6.Control of quantity at every stage
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7. Control of materials handling materialmovement on the floor
8. Control of due dates - monitoring ofschedules
9. Control of information on C/CA/PA for
future plan
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Elements of production control system
A system is a set of documented procedures1. Preparation of Production orders what?
2. To set Lead time for production
3. To monitor and control production job
card system, registers
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4. To record machine utilization, indirect
labour utilization, scrap and rework toimprove productivity production
report, scrap report
5. An information system for collecting andprocessing and display of the data
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Factors determining production controlprocedures
Nature of production Complexity of operations
1. Number of parts in the final product
2. Number of sub assemblies3. Number of operations in each part
4. Sequence of operations
5. Variations in output rates of the machines6. Customers orders with specific deliverydates, customers order schedule
7. Small lot orders
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Magnitude of operations
Time required for the operation
Distance of material movement
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Operations Planning & Control
Making a plan to organize inputs and runsubsystems to meet organizational objectives
and
Taking C/CA/PA to ensure that the planremains focused on objectives
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Role of OPC is to deliver customers
expectations
1. OPC as a system
Set measurable objectives
Identify subsystemsDocument procedures
2. Performing OPC functions
3. Maintain records
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Objectives of the company & role of OPC
Expectation - customer
Objective - supplier
What does a customer expect?
1. Reliable yet reasonable delivery
commitment
2. To be advised in case of delays
3. To be helped when he/she is in difficulty
4. Consistent good quality of products
5. Competitive rates
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Objectives of OPC
The broad objectives
1.To contribute in fulfilling corporate
objectives and objectives of operations
management
2.To help in setting up standards for future
3.To increase efficiency of operations
4.To increase productivity
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Specific objectives
1. Reliable yet reasonable delivery
commitment
Procurement Plan
Resources, available? To be procured?
Interaction with materials management
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Production Plan
Capacity committed, uncommitted
Tools availability
Maintenance schedules Any outsourcing?
Delivery commitment based on above to bereliable yet reasonable
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2. To be advised in case of delays
Monitor the plan efficiently
Do C/CA/PA on deviations
When delays are beyond control keep the
customer informed Major breakdown of equipment
Accidents
Strike
Acts of God
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Take full stock of the situation
convince the customer and reschedule
the delivery
3. To be helped when he/she is in difficulty
When another vendor fails
When customer has rush orders
OPC should keep some spare capacityas this is normal
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Accommodate the customer without
sacrificing regular orders
4. Consistent good quality of products
Resource planning
Planning equipment as per process
capability
Being committed to quality
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5. Competitive rates
Lower the price offered to the customer,
higher is the order volume!
But never at the cost of profit!
Cost reduction areas
Time waste is most difficult to correct
because it doesnt litter the floor!
Henry Ford
Waiting time operator, material, tool
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Hunting time operator hunting for variety
of items! Stalling delaying tactics by workers to
avoid starting a new job
Interrupted workloads planning
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Overtime due to bad planning
i. Commitment of unrealistic delivery dates
ii. Acceptance of too many rush orders
iii. Delays in materials receipt
iv. Machine break downs due to frequent
postponing of scheduled maintenance
v. Manpower problems
poor manpowerplan
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Unproductive time of machines - Material
handling problems Higher Overhead costs effective OPC
releases supervisory resources for value
adding work
Inventory investments (blocked capital)
Lowered morale
frequent stoppage of
operations due to bad planning
Role of OPC (Importance of OPC)
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Role of OPC (Importance of OPC)
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OPC is a staff function
Its role is advisory in achieving goals of right
quality, quantity and delivery It gives quantities of groups of major
assemblies (products), subassemblies and
parts in time frame OPC is an interface between marketing
requirements, production requirements and
materials requirements OPC is the brain of the operations function
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OPC provides decision makingsupport at three levels
Level I: fit aligns all resources to fit
the requirements
Level II: sustainability
developsustainability in market, competitiveadvantage
Level III: risk guard against impact ofuncertainty
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Scope of Operation Planning & control
Areas where OPC decisions are made
1.Materials: procurement planning Purchasing
Inspection
Storage Inventory control
Standardization
Variety reduction Value analysis
2 M th d
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2. Methods:
Process plan sequence
Tooling plan for tools, jigs & fixtures3. Machines and equipment
Relevant areas are
Facilities planning Replacement policy
Maintenance policy
Maintenance schedules Tools manufacture maintenance
4. Manpower: skills, numbers, shifts
R i d i i h fl f k
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5.Routing: determining the flow of work
Processing steps m/c 1, m/c 2, m/c 3
Materials handlingTemporary storage locations
6. Estimating: establishing operations times
for workers and machines
7. Loading and scheduling:
Allocation of jobs to machines as per routingand estimation to get maximum utilization
Fixing delivery dates (calendar)
8 Di t hi
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8. Dispatching:
Release of shop orders to commit raw
materials Authorizing usage of resources by
operations
Making plan operational
9. Expediting:
Chasing, follow up
10. Inspection:
To maintain quality of product
To evaluate the process and labour
11 E l i
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11. Evaluating:
Evaluation of performance of machines,
labour, process for management action Performance improvement
12. Cost control:
Wastage reduction
Value analysis
Inventory control
Resource utilization
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OPC makes what kind of decisions?
What to produce? product planning
Where to produce? facility planning
When to produce? schedules
Who will produce? man power plan
How to produce? process plan
How much to produce? production plan
O i ti f OPC f ti
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Organization of OPC function
Factors which determine the OS
1. Status of the OPC in a company
(i) if the nature of the work is repetitive
and number of workmen is small, line staffwould handle the OPC directly
(ii) if the equipment is laid out as per
sequence and machine capacities aresame, OPC is a sub-function of
Operations
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(iii) if the product variety is very large and a
batch system is followed, OPC should be
an independent function in par with other
functions
2. The degree of centralization Centralized OPC is handled by staff
specialists Line staff is free from planning activities
But line staff are deprived of using theirexperience and skills in planning
Sho ld be considered hen prod ct
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Should be considered when productvariety is large and planning process is
complex
A decentralized OPC is handled by linestaff
Line staff contribute their expertise
Suitable if planning is less complex2. The internal structure
The functions assigned to OPC
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R i t f ff ti OPC t
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Requirements of effective OPC system
1.computerized, fully integrated system
2. Quick response3. Effective, efficient and economic
4. User friendly easy to operate
5. Flexible in the light of businessenvironment
6. Ability to highlight variations as they occur
7. There must be minimum corrective actions8. It must be proactive
9. Result oriented
H d OPC tt t t t th
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How does OPC attempts to meet the
objectives?
Three stages in functions of OPC
Stage I: Planning functions
Stage II: OperationsStage III: Control function
Measuring effectiveness of OPC
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Measuring effectiveness of OPC
Delivery
OTD (number of orders delivered on timeagainst number of orders delivered
Inventory management, Inventory levels
Average inventory held annually Value of obsolete inventory
Non moving items
Surplus inventory
Inventory turn over ratio
P d i / i
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Production/operations management
Planned production Vs actual
Number of overtime hours
Machine utilization ratio
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Functions of OPC
1. Order preparation
Preparation of work order to operations
department
i. Samples, drawing or sketches
ii. Engineering specifications
iii. Sequence of operations
2 M t i l t l
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2. Materials control
Job card preparation and issue
i. Right material for the job
ii. Material consumption at every stage of
operationiii. Scrap generation
3. Process planning
4. Tools control
Record of available tools
Tool life
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5. Scheduling
Preparing a time schedule for the process to
meet commitment to customer
6. Dispatching
Preparing documentation to authorize use of
material
7. Progressing
8. Expediting
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Optional functions of OPC
1. Cost estimation (costing dept or IndustrialEngg. dept)
2. Work measurement (Industrial Engg.
dept)3. Sub contracting (materials management)
4. Capacity planning (Engineering dept)
5. Demand forecasting (Sales dept)