Production Management

IM PO RTANC E O F PR ODUC TIO N PL ANNI NG & CO NTR OL Aakriti Agarwal Apurva Sharma Pranoti Pandey

PRODU CTIO N PL AN NING • Planning involves collection and maintenance of data regarding time standards, materials and their specifications, machines and their process capabilities, drawing and operational layouts etc. • Planning is seeing, that requirements-tools, machines, men, instructions, authorizations and the like-well be available at the right time and in the right quantities and are of proper quality. • Planning is exercise of intelligent anticipation in order to establish how an objective can be achieved, or a need fulfilled. • Planning is necessary because resources are limited. This stage decides where and when the product shall be made. It includes the sequencing of operations.

IMPOR TA NC E OF PR ODU CT ION PLAN NING •

Production planning helps to produce the products of right quality, in right quantity at the right time by using the best and least expensive methods.

• Its helps to anticipate the problem or trying to do what will be required in future and improving what is being already produced. •

Its helps to define the objective and goal.

CONTROLLIN G • This refers to the stage of ensuring that the planned action is in tact carried out. • It includes measurement of actual results, comparison of the same with the planned action and feeding back information to the planning stage to make any adjustments required. • The pattern of control is seen in material control, machine utilization, labour control, cost control and quality control. • Control involves monitoring the actual business performance, and comparing it with set objectives and plans, and taking corrective actions when performance is not in line with set objectives and plans.

POOR CON TR OLL IN G • Poor control reduces the ability of a business to determine how it is performing and to take corrective action for improvement. • For example, when a company sets a particular sales targets and plans its sales, production, and distribution activities accordingly, it is not necessary that actual sales will always be in line with plans. •

Sales may be lower than projected for reasons like setting inappropriate sales target, or performance in areas like production, distribution or sales not being adequate.

• Effective control allows business to determine the root cause for deviations from plan and take suitable corrective action.

Functions Of PPC • Engineering Pre-planning activities • Planning, Routing, scheduling and dispatching functions of work • Feed back and control of progress of work assigned.

Effec t of pro duc tio n Pl anning & Co ntr ol on cost • The first stage of production planning is the estimating of future cash inflows against present cash outflows. • Because the production process is where the bulk of the costs occur, properly reviewing and planning for this process is important. Overpaying for facilities increases fixed overhead, which must be allocated to products. Fluctuating materials or labor costs create uneven variable costs, creating high variable costs needing to be allocated to products. • In any organisation, planning and control are the major activities and budgets are at the centre of these activities. Budgets are used as a management tool which supports planning, aids control of costs and decision making, motivation and communications. • Thus, budgeting is a crucial part of control and planning. They allow there to be plans made for the future and the implementation of these plans.

Eff ect of Pla nning & Co nt ro l on co st • It can lower its prices and can face the competition in a better manner . • Organisation can have improved or better sales turnover. • Organisation can increase or improve its profitability • It can utilize its resources to full extent i.e. better utilization of resources. • It can reduce its inventory cost.

Chrys ler Gr oup To Rede sig n Produc tio n Pla nning Pro cess • The Chrysler Group is implementing a radical change in its volume production planning process called "Integrated Volume Planning" or IVP. • The new integrated volume planning process is a part of Chyrsler’s ongoing effort leading to lower costs and reduced inventory not only for the Chrysler Group, but throughout the supply base. • In the current planning system, plant production capacity, fleet production orders and sales forecast estimates are sequentially analyzed to determine plant production. • The main problems which the Chrysler group faced were the high costs incurred by the management on inventory control, tooling costs & high order – to – delivery time.

Chrys ler Gro up To Rede sign Pro duc tion Planning Proc es s C ont’ d •Under the new IVP system, Chrysler Group will now utilize a webenabled process that will unite all planning steps into a network, from sales forecasting by market to the development of a final corporate production program. •IVP combines information from the sales field with supply and manufacturing requirements much earlier in the planning process, which then creates a production schedule that better reflects expected market demand. •The improved accuracy and timing with this new web-based infrastructure will significantly reduce order- to-delivery times, inventory banks and buffers, and tooling costs in the supply chain.

PARA WOOD F URN ITU RE MA NUFA CTU RIN G INDUST RY • Production planning and control is one of major parts in industrial operation. • Due to the complex production process and constrain of parawood furniture manufacturing industry, these result in both the difficulty in prod uction pl ann in g and con trol , l ow eff iciency , l ate prod uct delivery , and h igh pr od ucti on cos t. • The information attained from the sample plan, it shows that the cycle time per order is extended from 18 day s to 2 8 - 30 days which means 10 - 12 days later than the original setting. • Thi s generates hig h p rod uction cos t.

• This research proposes integrated production planning and control by having production cost as an indicator as one of the approaches used in solving problems mentioned above. • Manufacturing system model of the sample plant is created by using Arena 6.00.02 Education Edition simulation program because simulation is a suitable approach in solving complex problem and generates least effect to the overall system. • Then, necessary actual information of the sample plant is input into the model and run for ten replications to attain accuracy. The result is production plan that specifies work sequence, work station entering and leaving time, production cost, and cycle time. • Next, this production plan is used in an actual operation to attain feedback information that will be put into the model to be run for ten replication again to find actual production cost and analyze the failure causes.

• This lead to continuous process improvement in order to red uce prod uct ion cost . • The results of this research shows that the plant can red uce th e total prod uction cos t from 445,517 Bah t to 392,466 Baht or eq uals to 11.91 percen t. • It can be explained that the labo r cost can be decreased from 64,148 Baht to 58,319 Baht or decreased by 9.0 9 perce nt while the id le cos t can be decreased from 381,369 Baht to 334,147 Baht or decreased by 12.38 percen t. • In addition the cycle time can be reduced from 28 days to 24.5 days or decrea se d by 12.5 percent.