Production planning and control, plant location and layout.

     Under decentralized production planning & control system each foreman has his own group working under his authority. In such a setup the foreman is well versed with the local conditions of the environment & can have complete control over work assignments & various operations. But there may not be any co-ordination over the planning & control activities among different departments, which may adversely effect the fulfillment of overall objective.

       Control through progress men consists in placing a number of work orders under the responsibility of a progress man who follows the progress of each order through the various departments till it is ready for delivery. In such systems the progress man can assign priority to an order to expedite urgent orders.

1. Production planning

Introduction

Production planning is composed of two words ‘production’ & ‘planning’. Production is concerned with the activities of any manufacturing system & planning implies co-ordination, for emulation & determination of these activities for the accomplishment of the desired objective. Production planning is that function of management which decides about the resources the firm will require for its future manufacturing operations & of allocating these resources to produce the desired output in required amount at least cost. Production planning sets the framework within which detailed schedules & inventory control schemes must operate.

Pre-requisite for production planning is decision regarding the method of production i.e. pre planning about the type of product and its design and the amount of output.

Alternately, production planning is necessary for directing and controlling the methods used for production and deals with the setting up of production facilities viz. building, machine, equipment etc. in available space. It involves pre-determination of manufacturing requirements such as material, money, order priority, production process, etc. for efficient production of desired goods and services. Planning is projecting appropriate action well in advance about some predetermined objective together with means necessary to achieve the objective. It involves study of various alternatives and to select the best alternative under a set of conditions using logistics.

2. Levels of production planning

Production planning can be done at three levels namely factory planning, process planning and operation planning.

1. Factory planning: at this level of planning, the sequence of work tasks is planned in terms of building, machines and equipment required for manufacturing the desired goods and services. The relationship of workplaces in terms of departments is also planned at this stage taking into consideration the space available for this purpose. This stage deals with plant location and layout.
2. Process planning: there are many operations involved in factory planning for transforming the inputs into some desired end product. In process planning these operations are located and the sequence of these operations in the production process is determined. Plans are also made for the layout of work centers in each process.
3. Operation planning: It is concerned with planning the details of the methods required to perform each operation viz. selection of work centers, designing of tools required for various operations. Then the sequences of work elements involved in each operation are planned. Specifications about each transfer, work centers, nature of tools required and the time necessary for completion of each operation are prescribed.

3. Objectives of production planning

The fundamental objective of production planning is to produce right type of material both in quantity & in quality at the right time, using the most appropriate method of production in the most effective manner. The various objectives or goals of production planning can be listed as below:

1. Systematic co-ordination and regulation of various activities keeping in view the capacity of the resources & the objective of the organization.
2. To maintain proper balance of the activities foe efficient production.
3. Determination of raw material, machines, equipment, etc & other input requirements for desired output.
4. Anticipation of business changes & reacting to them in a proper manner.
5. To have optimum use of the resources with optimum cost &time by having most economical combination.
6. To provide alternative production strategies in case of emergencies.

4. Factors determining an efficient production planning system

1. Failure rate of sales, production & inventory levels etc.
2. Input requirements viz. raw materials, spare parts for machines & equipment, capacity of plant & present load, etc.
3. Estimated output desired.
4. Nature of operations, sequence of these operations & duration of each operation.

5. Procedures for production planning

The fundamental objective of production planning is the maximum utilization of plant capacity in the most economical manner. This can be accomplished by taking proper decisions regarding selection of raw material, equipment, machines & economic order quantity of output in one given lot. Production plans are designed to fix some or all of the characteristics of manufacturing and distribution operations by determining the general size of the labour force, setting plant and equipment capacity, etc.

Broadly speaking, the planning procedures concern themselves with the decisions regarding right type of materials, the best methods to be applied to manufacture and the most economic quantities to be manufactured in one lot. Production planning prepares the procurement plans for material and personnel, establishes stock room procedures and controls, prepares and issues work authorization, establishes finished goods inventory control and maintains alternatives plans of action.

Production planning procedures can be broadly divided into three categories:

1. Routing –

 “Routing means determination of path or route over which every piece is to travel in being transformed from raw material into finished product.”

Routing of a production order contains a complete description of the item to be manufactured, details of each operation involved in the process, the setup time and the standard time required to complete the work.

• Routing also prescribes the amount of material, types of equipment and machines and the number of skilled and unskilled workers required to perform a particular job or operation.

Routing consists of the following steps:

1. The product is fabricated into sub-components to decide that which components can be produced inside the plant and which parts are to be purchased from outside i.e. to manufacture or to buy decision is made.
2. The decision that which components can be manufactured by the organization will determine the requirement of inputs i.e. material, labour etc. The production process of transforming inputs into output is then outlined in the form of drawing as a route sheet using different symbols and notation for identification.
3. The next step is to determine various operations involved in the transformation process and then to list the sequence of these operations on the route sheet.

4. The duration and the nature of equipment and machine required for each operation are determined.
5. The economic lot size of production order quantity is calculated.
6. The amount of waste which depends on the scraping factors is estimated.
7. The various types of proformas to record the details of production process at different stages of production are also designed. The format of these proformas depends on the type of manufacturing system.

Scheduling

     Scheduling is the process of prescribing when each operation in a production process is to be executed. In other words it involves designing the timetable of manufacturing activities indicating the time required for the production of units at each stage.

According to Sprigel and Lansburg, “scheduling involves establishing the amount of work to be done and the time when each element of the work will start.”

According to Kimball and Kimball, “the determination of time that is required to perform each operation and also the time required to perform the entire series as routed is scheduling.”

Thus scheduling can be termed as

1. A description of when and where each operation in a production process is to be executed.
2. Establishment of timetable at which to begin and/or complete each event or operation comprising any procedure.

Objectives of scheduling

The fundamental objective of scheduling is to arrange the work of the production unit in such a way that (1) items are delivered on due date and (2) the production cost is minimum.

In general scheduling may be carried out to meet the following objectives:

1. To plan the sequence of work such that delivery date is met.
2. To have minimum throughput time for having better utilization of resources.
3. To minimize idle time of machines, labour, etc, for having maximum utilization of plant and reducing the cost of wages.
4. To prevent unbalanced allocation of time among various departments and work centers.

Classification of scheduling

1. Operation schedule - operation schedule determines the total time required to do a piece of work with a given machine or process.
2. Master schedule - master schedule is a list showing how many of each item to make in each period of time in future. These are usually changed as time moves along in response to change in conditions. It is the first step towards planning for production.

          The nature of master schedule depends on weather the manufacture is to order or to stock. When the products are made to customer’s orders, the job of master schedule is largely to look at the future workload of orders already on hand. It is also necessary to pay attention to the sequence of workloads in different departments.

The development of a master schedule for manufacture to stock begins with a sales forecast. In such cases one of the major function is to smooth out the difference s as much as possible between regular sales and steady production largely by inventories to cushion the differences.

3. Sequential scheduling  - a best or optimum schedule can rarely be recognized, even assuming the optimum to be known. Here the problem is to define a sequence for a multi-product plant, which passes through a number of departments. If the duration of each operation is known then two general rules for finding the optimum sequence can be

1. For minimum time lost, each operation should be longer then any predecessor in a programme.
2. For minimum individual lead-time, each operation should be shorter then any predecessor in a programme. 

Loading 

  In planning the production process the management must know when a particular equipment/machine will be available for work on each order or item. Knowing the number of machine shifts available for each kind of operation and number of shifts required for such operations in the production process to complete the schedule, the planning staff can evaluate weather the workload is greater or less then the capacity of the equipment. This is done by loading.

     Loading can be defined as the study of the relationship between load and capacity at the places where the work is done.

        a. Objectives of loading

 The following are some of the main objectives of loading:

1. To plan new work orders on the basis of spare capacity available.
2. To balance the workload in a plant.
3. To maintain the delivery promises.
4. To check the feasibility of production programmes.

1. Loading devices

     There are two main approaches for loading viz. loading step by step, and machine loading and load charts.

5. Loading step by step:

Sometimes an individual production order may require a finite number of operations and the order of these operations may vary too much from item to item. In such cases overloads are scheduled to account for interaction among various operations by identifying the operation, which imposes maximum delay on the order.

Following are the steps in this approach:

• Find the earliest date and the hours required that could be scheduled into each operation.
• Determine the hours required at each operation and the time thereafter to complete the job if no loading delay occurs.
• Schedule the bottleneck operation as early as possible.
• Schedule subsequent operations as early as possible.

6. Machine loading:

Using information from schedules, weekly/periodic load in hours is determined for each machine and is then recorded on the machine load chart. A machine load chart for all the machines in a production department shows the future spare capacity for all machines.

7. Load charts:

 Load charts shows the work assigned to various departments, machines or components of an organization. During periods of peak/heavy loads information from load charts can be used to determine:

• Priorities to future orders and to decide whether to sub-contract or refuse new orders.
• Provision of overtime or multishift operations.
• Acquisition of extra men or equipment for additional capacity.

6. Importance of production planning

The success and growth of any organization mainly depends on planning. In the present world there is tough competition, rapid development of technology and quick changes in human behavior and daily requirements. Due to these factors there is lot of uncertainty associated with every system and to counterbalance it, production planning becomes a valuable tool.

  Planning ensures the most economical usage of resources viz. materials, capital and labour. It tries to distribute the workload in such a manner that there is uniform use of resources during peak as well as dull periods of demand for goods and services. Planning provides basis for effective production control. Planning formulates the production schedule and fixes the targets in terms of time and effort for each operation i.e. the work standards are formulated.

Thus it is evident that planning occupies an important place in management of production process. The level of performance as well as the success of an enterprise depends on effective planning.

7. Main characteristics of a good planning procedure

1. It should have a well-defined objective.
2. It should be simple and easy to apply in practice with flexibility to adjust in changing situations.
3. Reliable and up to date information should be available for planning the process.
4. It should be capable of lying down appropriate standards and targets for effective control of the operations.
5. It should be based on sound decision-making principles.

1. Production control

Production control is one of the most important and fundamental functions of an enterprise. It ensures the desired output of specified quality at the prescribed time in the most economical way to meet an approved sales programme.

        Production planning only prescribes and outlines the objective and provides guidelines for various activities involved in the transformation of inputs into outputs. But it is production control, which directs and regulates all the activities of a production process. It verifies whether the activities are going on in accordance with the production plan or not. Control is a sort of dynamic activity, which controls the production cycle, to ensure that facilities and the personnel are economically utilized and that products are manufactured within time and cost limits. According to Burbige, “production control provides the foundation on which most of the other industrial controls are based.”

The controller of production process tries to control the output so that it is in conformity with the target set by the marketing department. Production control is the hallmark of production efficiency. It is the pivot around whish the success of production revolves.

 2. Definition of production control

There is a lot of disagreement between experts of management regarding the meaning of production control. The term itself appears to be quite confusing and misleading. In literary sense control means action to check/regulate. Control is an execution process involving standardization, evaluation and corrective functions.

         According to Fayol, “control consists in verifying whether everything occurs in conformity with the adopted plan and established principles. The objective of control id to point out weaknesses and shortcomings, if any, in order to rectify them and prevent recurrence. It operates on everything viz. material, equipment, men, operations etc. for control to be effective, it must be applied within reasonable time and be followed up.”

Thus production control is some scientific procedure to regulate an orderly flow of material and co-ordinate various production operation to accomplish the objective of producing desired item in right quantity of desired quality at the required time by the best and the cheapest method i.e. to attain the highest efficiency in production.

      Alternatively, production control is the function of management, which plans, directs and controls the material supply and processing activities of an enterprise; so that specified products are produced by specified methods to meet an approved sales programme. It ensures that the activities are carried in such a way that the available labour and capital are used in the best possible way.

 3. Objectives of production control

The success of an enterprise greatly depends on the performance of production control department. The production control department generally has to perform the following functions:

1. Provision of raw material, equipment, machines and labour.
2. To organize production schedule in conformity with the demand forecasts.
3. The resources are used in the best possible manner in such a way that the cost of production is minimized and the delivery date is maintained.
4. Determination of economic production runs with a view to reduce setup costs.
5. Proper co-ordination of the operations of various sections/ departments responsible for production.
6. To ensure regular and timely supply of raw material at the desired place and of the desired quality and quantity to avoid delays in production.
7. To perform inspection of semi-finished and finished goods and use quality control techniques to ascertain that the produced items are of required specifications.
8. It is also responsible for product design and development.

Thus the fundamental objective of production control is to regulate and control the various operations of production process in such a way that orderly flow of material is ensured at different stages of the production and the items are produced of right quality in right quantity at the right time with minimum efforts and cost.

 4.Factors determining production control operations

The nature of production control operations varies from organization to organization. The following factors affect the nature and magnitude of production control methods in an organization:

5. Nature of production

In job-oriented manufacturing, products and operations are designed for some particular order, which may or may not be repeated in future. Here production usually requires more time, whereas in a continuous manufacturing system inventory problems are more complex but control operations are rather simple due to fixed process. In mixed stock and custom manufacturing systems the problem of control is further complicated due to simultaneous scheduling of combined process.

6. Nature of operations / activities:

In intermittent manufacturing system the operations are markedly varied in terms of their nature, sequence and duration. Due to this the control procedure requires continuous modifications and adjustments to suit the requirements of each order.

7. Magnitude of operations:

Centralized control secures the most effective co-ordination but as an organization grows in size, decentralization of some production control function becomes necessary. The degree to which the performance of an activity should be decentralized depends upon the scope of operations and convenience of their locations.

 5. Techniques of production control

Production control ensures regular and smooth flow of material and co-ordinates different manufacturing operations through the methods of programming, ordering, dispatching, progressing and inventory control.

1. Programming:

Production programming regulates the supply of finished product in desired amount at the due date in accordance with the production plan. Programming ensures most efficient use of labour, equipment and capital.

            In production programming there are three main decisions to be taken:

• Nature of the product to be manufactured
• Amount of quantities to be produced
• When to produce

2. Ordering:

It breakdown the requirements for products to be completed at specific times onto orders for materials and processed parts and attempts to do so in such a way that they are available when needed.

In other words it is a process of placing orders to the supplier and the processing department for the material and other parts needed to manufacture the product and to arrange the ordering quantity and delivery schedule in such a way that all items are delivered in time to meet the production programme.

 The following information is required for each order:

(1) Requirement quantity- this information can be gathered from the master schedule. An allowance has to be made for scrape, which may be derived from historical records.

3. Dispatching:

Dispatching is the routine of setting production activities in motion through the release of order and instruction in accordance with previously planned times and sequence embodied in route sheets and schedule charts.

  The decision of assigning various jobs to different machines is known as dispatching.

4. Progressing or follow up:

 Progressing is the function by which one can give an early warning when actual production deviates from planned production and thus makes it possible to take corrective action.

Follow-up is a most important step of production control. This step is to ascertain from time to time that the production operations are progressing according to plan. The chaser is responsible for observing that any detail which is overlooked or not properly executed is set right.

Plant location

Introduction

The performance of an enterprise is considerably affected by its location. Unscientific and unplanned industrialization is harmful not only to the industrial unit but also to the social and economic structure of the country as a whole.

The degree of significance for the selection of location for any enterprise mainly depends on its size and nature. Sometimes the nature of the product itself suggests some suitable location. A small-scale industry mainly selects the site where in accordance with its capacity the local market for the product is available. But for large scale industries requiring huge investments there are many considerations other then the local demand in the selection of a proper plant location.

Importance of plant location

The selection of location is an important phenomenon for the success of an enterprise and requires through analysis. This is because the fundamental objective of any enterprise is to maximize its profit which can be done either by increasing its sales or by decreasing its cost of production. The reduction in costs of production is possible when a firm is located at a place where all kinds of production economies w.r.t. Inputs are available.

   Selection of appropriate location is important due to the following reasons:

• Location of plant partially determines operating and capital costs.
• Each prospective location implies a new allocation of capacity to respective market areas.
• Location fixes some of the physical factors of the overall plant design e.g. heating, ventilation requirements, etc.
• Government sometimes plays an important role in the choice of the location keeping in view the national benefits.

Factors responsible for plant location choices

The physical factors associated with the location of an enterprise can be qualitative as well as quantative. Qualitative factors can be measured in terms of some qualitative criteria namely; adequate, good, significant, etc. quantative factors can be measured on cost or some other quantative basis viz. labour, housing, land, etc.

  In general, “a plant should be located at a place where the inhabitants are interested in the success, the product can be sold profitably and the production cost is minimum.

  In particular, the choice of plant location should be based on the following considerations:

1. Availability of raw material

An ideal location is one where the main raw material required to manufacture the product is adequately available. This will ensure regular supply of the material and will also reduce the transportation cost.

2. Nearness to the potential market

Marketing of its goods efficiently is also an important function of an enterprise. If the plant is located near the market then the management can keep in close touch with the changes in market environment. But with expansion of markets both at national and international levels this aspect is now of secondary importance.

3. Location should be near to the source of operating power

In some industries continuous and adequate supply of power is of great significance. In such a situation location of the plant near to a power station will provide cheap electricity.

4. Supply of labour

Labour is one of the most important inputs in an industrial enterprise. There should be regular and cheap supply of labour, specifically unskilled labour. In modern times with brisk movement of labour force from one place to another this factor is also of secondary importance.

5. Transport and communication facilities

Any region which is well connected with rail, road, water and air transport system is considered to be more appropriate for the location of a plant. If the ratio of product weight to its value is high then more emphasis should be given to transport cost.

   Similarly good communication facilities viz. postal and tele communication links are of great signification towards the success of an enterprise.

6. Integration with other group of companies

New enterprise owned or operated by a single group of companies should be so located that its work can be integrated with the work of the associated establishments.

7. Suitability of land and climate

Sub-soil of the location should be able to support the load likely to be placed on it.

  Similarly the climatic conditions should be favorable for the enterprise.

8. Availability of housing, other amenities and services

Good housing, adequate number of shops, restaurants, local transport, water supply, etc can easily attract good staff.

9. Local building and planning regulations

Proposed location should not infringe local regulations and byelaws. Laws for the construction of buildings, local taxes etc. should be taken into consideration for the selection of site.

10. Safety requirements

Industries like nuclear power stations and other industries which use harmful chemicals should be located in remote areas.

11. Other consideration for the choice of location can be

Low interest on loans, special grants, political situation, low rentals, attitude of residents towards the enterprise, etc.

Location analysis

The selection of appropriate location depending on the size of the industry can be done in two stages:

• Evolution of various geographic areas and the selection of an optimum area.
• Within each area there is a choice of proper site which can be urban, sub-urban or rural are generally known as industrial zone.

Plant layout

Meaning and definition of plant layout

Layout problems are fundamental to every type of organization/enterprise and are experienced in all kinds of undertakings. The manufacturing organizations must arrange their facilities, not only the departments within the factory but also the plant, stores and services so as to achieve smooth flow of products. The adequacy of layout affects the efficency of subsequent operations.

   A good layout results in comforts, convenience, safety, efficiency, compactness and profits. Development of a good layout depends on a series of decisions already taken on location, capacity, facility, manufacturing methods and material handling.

Objectives of layout

An efficient layout can be instrumental in the accomplishment of following objectives:

• Economies in materials facilitate manufacturing process and handling of semi-finished and finished goods.
• Proper and efficient utilization of available floor space.
• To ensure that work proceeds from one point to another point inside the plant without delays.
• Provision of better supervision
• Careful planning to avoid frequent changes in layout
• To provide adequate safety to the workers
• To meet the quality and capacity requirements in the most economical manner
• Provision of medical facilities and cafeteria
• To provide efficient material handling system
• To suggest improvements in production process

Factors relevent in the choice of the layout

1. Nature of the product

The size, shape, characteristics and many other properties of the product influence the choice of the layout.

2. Size of output

If standardized items are to be produced in bulk then product or line layout is more suitable. If some specific product is to be manufactured then functional layout is more appropriate.

3. Nature of manufacturing system

For intermittent type of industries functional layout is better and in the case of continuous manufacturing system one can very well use product or line layout

4. Location of the plant

 Layout is greatly influenced by the size, shape, climate conditions and by-laws of the area where plant site is located.

5. Machines or equipment

Heavy machines making too much movement during operations need stationary type of layout. Layout also depends on the size of the machines.

6. Others

Climatic conditions, requirements of light, temperature etc. also play an important role in designing a layout.

Types of layout

The layout of manufacturing system can be classified into three main categories, namely

       Line of product layout

      Functional or process layout

      Stationary layout

• Line or product layout

The position of a particular machine/equipment is determined at some definite stage or place where the machine is required to perform some operation from a sequence of operations designed to manufacture the product. Material is transformed into products through a series of integrated operations, arranged in an ordered sequence.

The position and order in the sequence for a machine performing particular operation is fixed. Here equipment/machines are arranged according to the needs of the product

This type of layout is used for continuous type of manufacturing systems, producing items of the same type on mass scale.

• Process of functional layout

In this layout more emphasis is given to specialization or functional homogeneity on various components of the system. All operations of similar nature are grouped together in the same department or part of the factory. Here machines performing same type of operations are installed at one place. This type of layout is most appropriate for intermittent (job and batch type of manufacturing system)

• Stationary layout

This type of layout is used in those situations where the semi-finished and finished goods are of such a size and weight that their movement from one place to the other is not possible. Here men, equipment and the raw material is moved to a place where all the manufacturing activities are carried out.

Techniques of plant layout

For an efficient layout certain basic information are required for proper planning. These can be listed as:

• Type and quantity of labour required
• Dimensional plan of the space to be laid out
• Volume of work to be taken from the space at present and in future
• Description of the operations, their sequence and standard times in the production process.
• Nature of machines and equipment needed to perform the operations
• Amount of material, buffer stock required at each work station
• Size of finished and semi-finished products inventory
• Kinds of communications and fire-exits necessary for plant
• Special requirements if any to fulfill the local bye-laws
• Special geographical and inspection requirements

On the basis of the above information, one can select appropriate method to plan the desirable layout.

Plant layout tools and techniques

1. Process charts

A process chart is a classification and graphic representation of production activities in a plant.

These charts can be divided in two categories

• Operations process charts

These charts divide the whole manufacturing process into operations and inspections. It indicates the points at which materials are introduced into the process and exhibits the sequence of all operations and inspection except those involved in material handling.

• Flow process charts

It is a graphic representation of all production activities occurred on the floor of the plant. The study of this chart can reveal the operations that can be eliminated, rearranged or simplified to achieve economy in production.

2. Process flow diagrams

It is both a supplement and substitute of flow charts. It is an aid to visualize the movement of material on an existing floor layout.

3. Machine data cards

This is an effective method to provide necessary information for placement or layout of the equipment. These cards are prepared for each machine showing its capacity, space and power requirements, handling needs and the corresponding dimensions.

4. Visualization of layout

This is the most common method of planning a layout by making replicas of machines, racks, benches and the equipment and then arranging these in a two or dimensional plan of the floor space.

• Two-dimensional plan or templates

In practice templates are used to develop layout. The area required by equipment may be cut to scale from a sheet of heavy paper, then colors may be used to show areas for production machines, benches, racks and other equipments for material handling and storage space.

• Three dimensional plan or machine models

To have a better understanding of the depth, height, etc. of machines, scales or miniature models are constructed in place of templates. In it one can easily detect the weakness of the layout if any.