production and operations management(POM) Complete note

UNIT ONE
Topics in this unit :
• The Introduction to POM, Scope, Role, and
Objectives of POM, Operations Mgt. – Concept;
Functions
• Product Design and its characteristics;
• Product Development Process, Product
Development Techniques.
• Process Selection – Project Job, Batch Mass
Production types of production Systems;
• Product -Product Mix

introduction to production and
operations management
• Production/operations management is the
process, which combines and transforms various
resources used in the production/operations
subsystem of the organization into value added
product/services in a controlled manner as per
the policies of the organization. Therefore, it is
that part of an organization, which is concerned
with the transformation of a range of inputs into
the required (products/services) having the
requisite quality level.

introduction to production and
operations management
Production and Operations Management ("POM") is
about the transformation of production and
operational inputs into "outputs" that, when
distributed, meet the needs of customers.

• POM incorporates many tasks that are interdependent, but which can be
grouped under five main headings:
1: PRODUCT
• Marketers in a business must ensure that a business sells products that meet
customer needs and wants. The role of Production and Operations is to ensure
that the business actually makes the required products in accordance with the
plan. The role of PRODUCT in POM therefore concerns areas such as:
- Performance
- Aesthetics
- Quality
- Reliability
- Quantity
- Production costs
- Delivery dates
2: PLANT
• To make PRODUCT, PLANT of some kind is needed. This will comprise the bulk of
the fixed assets of the business. In determining which PLANT to use,
management must consider areas such as:
• - Future demand (volume, timing)
- Design and layout of factory, equipment, offices
- Productivity and reliability of equipment
- Need for (and costs of) maintenance
- Heath and safety (particularly the operation of equipment)
- Environmental issues (e.g. creation of waste products)

3: PROCESSES
• There are many different ways of producing a product. Management
must choose the best process, or series of processes. They will
consider:
• - Available capacity
- Available skills
- Type of production
- Layout of plant and equipment
- Safety
- Production costs
- Maintenance requirements
4: PROGRAMMES
• The production PROGRAMME concerns the dates and times of the
products that are to be produced and supplied to customers. The
decisions made about programme will be influenced by factors such as:
• - Purchasing patterns (e.g. lead time)
- Cash flow
- Need for / availability of storage
- Transportation

5: PEOPLE
• Production depends on PEOPLE, whose skills,
experience and motivation vary. Key people-
related decisions will consider the following
areas:
• - Wages and salaries
- Safety and training
- Work conditions
- Leadership and motivation
- Unionization
- Communication

Functions of POM
• Production/operation management is a component of
organization which concerned with the creation of
utility in raw materials through conversion process.
• As a part of management, it has following functions:
• Planning:
• Organizing:
• Controlling:
• Behavior:
• Models

CONT…
PLANNING
• Activities that establishes a course of action and guide
future decision- making is called planning.
• POM defines the objectives for the POM subsystem of the
organization It defines the policies, and procedures for
achieving the objectives.
ORGANIZING
• Activities that establishes a structure of tasks and authority
is called organizing.
• POM establish a structure of roles and the flow of
information within the POM subsystem. POM determine
the activities required to achieve the goals and assign
authority and responsibility for carrying them out.

CONT…
CONTROLLING
• Activities that assure the actual performance in accordance
with planned performance is called Controlling.
• To ensure that the plans for the POM subsystems are
accomplished, the PO manager must exercise control by
measuring actual outputs and comparing them to planned
operations management.
BEHAVIOUR
• Human aspect on the job is called behaviour.
• PO managers are concerned with how their efforts to plan,
organize, and control affect human behaviour. They also
want to know how the behaviour of subordinates can affect
management’s planning, organizing, and controlling
actions.

CONT…
MODELS
• The techniques which are used for problem
solving is called Models.
• As a process of plan, organize, and control the
conversion process, PO manager encounter
many problems and must make many
decisions

Scope PRODUCTION AND OPERATIONS
MANAGEMENT
• Due to the dynamic
change in the business
environment, the
scope of production
and operation
management has
increased. Following
are the activities which
are included under
production and
operations
management
functions:

Scope of POM
•
Facility Location - Selecting appropriate location for the
production
• Plant layouts and material handling - Deciding upon the
machines, equipment and necessary devices which could
lead to effectual and desired production in the most
economic way. Preparation of plan layout for the
establishment of machines in the required sequence.
Storage of material and handling it in most effective way to
avoid the wastage and delivery at the work centers as and
when required.
• Product design - Designing the product and conceive the
idea about its production.
• Process design - Determination of the production process
which is most relevant and efficient in the given state of
affairs

CONT..
• Production and planning control - Planning the production
and its various aspects how, when and where producing a
particular product or its assembly will be done.
• Quality control - Controlling the production and ensuring
the quality by setting the check points and taking the
periodic measurements of the current performance.
• Materials management - Managing the inventories of raw
material, semi-finished and finished goods in a way that
neither excessive money may block in this non-productive
operation nor the required material.
• Maintenance management - Analysis the deviations and
formulating the corrective measures to stay in track with
planned quality, time-schedule and predetermined cost
schedules.

Objectives of Production and Operations
Management:
• The main objectives may be one of more of the following:
a. Efficiency:
• Increased output for a given input.
b. Productivity:
• Increased production using given resources.
c. Economy:
• Production is more economical (done at reduced cost).
d. Quality:
• Good quality products at reduced cost.
e. Reduced processing time:
• Increased production within a given amount of time.

Operations Mgt.
Operations management (OM) is the set of
activities that creates value in the form of goods
and services by transforming inputs into outputs.
• OM is one of three major functions (marketing,
finance, and operations) of any organization
• We want (and need) to know how goods and
services are produced
• We want to understand what operations
managers do
• OM is such a costly part of an organization

Product design
• Product design deals with conversion of ideas
into reality

Objective of service design
• 1: productivity
• 2: cost
• 3:quility
• 4:reliabilty
• 5:timing

Characteristics of product design
1): function or performance: the function and performance is
what the customer expects the product to do to solve his
problem or offer certain benefits leading to satisfaction.
2): Appearance :this include the style ,color ,look ,feel etc .
Which appeals to the human sense and also adds value to the
product.
3): Reliability : this refers to the length of time a product can
used before it fails.
4): maintainability: refers to the restoration of product once it
has failed. High degree of maintainability is desired so that the
product will can be restored (repaired) to be used within a
short time after it breaks down.
5): Availability: this refer to the continuity of service to the
customer. A product is available for use when it is an
operational state. Availability is the combination of reliability
and maintainability.

Characteristics of product design
6): produciblity : this refer to the ease of manufacture
with minimum cost (economic production).
7(: standardization: this refer to the design activity that
reduce variety among a group of products or parts.
8): specification; a specification is a detailed description
of a material , part or product including physical
measures such as dimension , volums,weight, surface,
finish etc.
9): safety: the product must be safe to the user and
should not cause any accident while using or should not
cause any health hazard to the user.

Steps of New Product Development
• new product development (NPD) is the
complete process of bringing a new product to
market. Developing a new product involves a
number of stages which typically center around
the following key areas:

Cont…
Idea generation
• Every product has to start with an idea. In some
cases, this might be fairly simple, basing the new
product on something similar that already exists.
In other cases, it may be something revolutionary
and unique, which may mean the idea generation
part of the process is much more involved. In fact,
many of the leading manufacturers will have
whole departments that focus solely on the task
of coming up with ‘the next big thing’.

Cont..
Research/Idea screening:
Most companies have a "Idea Committee." This
committee studies all the ideas very carefully.
They select the good ideas and reject the bad
ideas.
An organization may have plenty of ideas for a
new product, but once it has selected the best of
them, the next step is to start researching the
market. This enables them to see if there’s likely
to be a demand for this type of product, and also
what specific features need to be developed in
order to best meet the needs of this potential
market.

..
•
Development /Prototype design,
• In this stage the production and operation department
advance design the product and developed the engineering.
• Several engineering activities are carried out to analyze
experiment and collect data for product development.
• Prototypes may be modified through various design and
manufacturing stages in order to come up with a finished
product that consumers will want to buy.
Testing:
• Before most products are launched and the manufacturer
spends a large amount of money on production and
promotion, most companies will test their new product with
a small group of actual consumers. This helps to make sure
that they have a viable product that will be profitable, and
that there are no changes that need to be made before it’s
launched.

• Analysis: Looking at the feedback from consumer
testing enables the manufacturer to make any
necessary changes to the product, and also decide how
they are going to launch it to the market. With
information from real consumers, they will be able to
make a number of strategic decisions that will be
crucial to the product’s success, including what price to
sell at and how the product will be marketed.
• Introduction: Finally, when a product has made it all
the way through the new product development stage,
the only thing left to do is introduce it to the market.
Once this is done, good product life cycle management
will ensure the manufacturer makes the most of all
their effort and investment.

Product design techniques
• Standardization
• Simplification
• Specialization
• Diversification

The factors affect a product design are
as :
• Requirements of targeted customers.
• Availability and access to necessary production
facilities.
• Type and quality of raw-materials used to produce a
product.
• Cost to price ratio.
• Policy of quality standards.
• Availability of plant and machineries.
• Impact of upcoming product on existing products of
the company.
• Reputation or goodwill of the company.

Process Selection
• It is a strategic decision for organizations , It
determines
– the quality and quantity of employees
– The amount of capital required for the production
• These decisions are generally capital intensive
and con not be changed easily, Hence, process
selection is a long term decision.
• Therefore the attempt should be made to select a
process which has acceptable levels of flexibility
and cost

Process can be classified in two main
categories such as :
– Type of customer order
– Production Flow
1: There are two types of customer orders
– Made to Stock (MTS): The MTS process has a
standard product line specified by the producer,
not by customer
• The products are carried in inventory to fulfill customer
demand
• When the customer orders a product, it is delivered if
product is available in the inventory,
• If it is not available, a back order is generated

Cont…
– Made to order (MTO): In MTO, the cycle of
production and order fulfillment begins with the
customer order
• After receiving the order, the design must be
completed
• The performance measures of an MTO are: time taken
to complete the order (Lead Time) and percentage of
orders completed on time

Intermittent Production System
Production is performed on a start-and-stop basis,
such as for the manufacture of made-to-order
products. Done to produce small volume and high
diversity products.

types of an intermittent production
system include:
 Project production flows,
 Jobbing production flows,
 Batch production flows.
1: Project production flows
Here, in project production flows, company accepts a
single, complex order or contract. The order must be
completed within a given period of time and at an
estimated cost.
• Examples of project production flows mainly include,
construction of airports, dams, roads, buildings,
shipbuilding, etc.

The characteristics or features of
project production flows are as:
• The requirement of resources is not same (it varies).
Generally, the resource requirement at the beginning is
low. Then in mid of production, the requirement increases.
Finally, it slows down when the project is near its
completion phase.
• Many agencies are involved in the project. Each agency
performs specialized jobs. Here, coordination between
agencies is important because all jobs are interrelated.
• Delays take place in completion of projects due to its
complexity and massiveness.
• As routing and scheduling changes with fresh orders,
proper inspection is required at each stage of production.

2: Jobbing production flows
Here, in jobbing production flows, company accepts
a contract to produce either one or few units of a
product strictly as per specifications given by the
customer. The product is produced within a given
period and at a fixed cost. This cost is fixed at the
time of signing the contract.
• Examples of such jobbing production flows
include, services given by repair shops, tailoring
shops, manufacturer of special machine tools,
etc.

The characteristics or features of
jobbing production flows are as:
• The production of items takes place in small lots.
Sometimes only one product is produced at one
time.
• The items are manufactured strictly as per
customer's specifications.
• Highly skilled labour is required to perform
specialized jobs.
• There is disproportionate manufacturing cycle
time. For e.g. the time needed to design the
product may be more than the manufacturing
time.

3: Batch production flows
This process is adopted when batches or lots of item are
to be produced using the same set of machines in the
same sequence . Here, the production of items takes
place in lots or batches. A product is divided into different
jobs. All jobs of one batch of production must be
completed before starting the next batch of production.
• Examples of batch production flows include,
manufacturing of drugs and pharmaceuticals, medium
and heavy machineries, Oil Paints, Soft Drinks,bakery
• etc

The characteristics or features of batch
production flows are as :
• The products are made and kept in stock until
their demand arises in the market.
• General purpose machines and handling
equipment's, which can do many different jobs
quickly are installed. This is because large
varieties of items are to be produced.
• There is a possibility of large work-in-progress
due to many reasons.
• There is a need for detailed production
planning and control.

Planning and Control Mechanism for
Intermittent System :
• -Organization of production planning and
control operations in intermittent systems needs
estimation of jobs, routing, scheduling, preparation
of manufacturing orders, dispatching and production
control. Here customer provides the blue print
and other specification regarding the product to be
manufactured. Then the organization formulates
their production strategy to suit the needs of the
customer.
• Proper regulation and close inspection is required at
different stages of production
• Storage facilities are to be provided at each operational
stage.

2: CONTINUOUS PRODUCTION .
• Continuous means something that operates
constantly without any irregularities or frequent
halts.
• In the continuous production system, goods are
produced constantly as per demand forecast.
Goods are produced on a large scale for stocking
and selling. They are not produced on customer's
orders. Here, the inputs and outputs are
standardized along with the production process
and sequence.
• Eg: The production system of a food industry is
purely based on the demand forecast. Here, a
large-scale production of food takes place. It is a
continuous production.

The characteristics of a continuous
production system are as follows:
• The flow of production is continuous. It is not
intermittent.
• The products are standardized.
• The products are produced on predetermined quality
standards.
• The products are produced in anticipation of demand.
• Standardized routing sheets and schedules are
prepared.
The types of continuous production system include:
Mass production flows, and
Process production flows.

1. Mass production flows
Here, company produces different types of products on a large-scale
and stock them in warehouses until they are demanded in the market.
• E.g. of mass production is the production of toothpastes, soaps,
pens, etc.
The characteristics or features of mass production flows are as follows:
• The goods are produced either with the help of a single operation
or uses a series of operations.
• There is a continuous flow of production. However, this depends on
the demand in the market.
• Here, there is limited work-in-progress.
• Supervision is easy because only few instructions are necessary.
• The material handling is done mostly by machines, i.e. conveyors
and automatic transfer machines.
• The flow of materials is continuous. There is little or no queuing at
any stage of production

2. Process production flows
Here, a single product is produced and stocked in warehouses until it is
demanded in the market. The flexibility of these plants is almost zero
because only one product can be produced.
• Examples of these plants include, steel, cement, paper, sugar, etc.
The characteristics or features of process production flows are as
follows:
• There is a highly mechanized system for handling materials.
Conveyors and automatic transfer machines are used to move the
materials from one stage to another.
• Low-skilled labour and skilled technicians are required.
• There is very less work-in-progress because material flow is
continuous.
• The production planning and scheduling can be decided well in
advance.
• The full production system is designed to produce only one specific
type of item.

Production Control Mechanism for
Continuous manufacturing system:
In this system the control mechanism is not as
elaborate and complex as for intermittent
system. In continuous system large quantities
of standardized products are produced using
standardized production process.
This system does not involve diverse work, due
to which routing standardized route and
schedule sheets are prepared.

Service vs Manufacturing Organizations
• There are five main differences between service and
manufacturing organization.
• 1. Goods are tangible but services are intangible.
Goods are objects, which can be seen, felt, sensed
easily. Services are performance which cannot be
tasted, felt, touched.
2. The ownership rights of goods are transferable,
there is however no ownership involved in services.
• Inventory
• Service firms, unlike manufacturers, do not hold
inventory; they create a service when a client requires
it.

cont,…
3: Customers
• Service firms do not produce a service unless a customer requires
it, Manufacturers can produce goods without a customer order or
forecast of customer demand.
4:Location
• Service firms do not require a physical production site. The people
creating and delivering the service can be located anywhere.
Manufacturers must have a physical location for their production
and stock holding operations. Production does not necessarily take
place on the manufacturer's own site; it can take place at any point
in the supply chain.
5: Labor
• A service firm recruits people with specific knowledge and skills in
the service disciplines that it offers. Manufacturers can automate
many of their production processes to reduce their labor
requirements.

Product life cycle
• Everything in the world have its own life cycle.
• The stages of the life cycle of the product is a factor in
product design.
• The Product Life Cycle is concerned with the pattern of
demand of product from its introduction on market to
the point where the product has very less or no
demand.
• The Product Life Cycle (PLC) is used to map the lifespan
of a product. There are generally four stages in the life
of a product. These four stages are the Introduction
stage, the Growth stage, the Maturity stage and the
Decline stage.

The four stages of PLC
1: Introduction stage: This is the stage in which
the product is initially promoted. It is a trial
stage of the product so the success of new
product depends on how the introduction stage
react?
In this stage the product development and
design are of considerable importance.
Examples:
3G Mobiles

Cont
• 2: The Growth stage is
where your product starts to grow. In this
stage a very large amount of money is spent on advertising.
• Sales revenue is in large in amount, profit is increasing.
• The firms are focus on increasing market share by focusing
different marketing strategies.
• Due to the increasing in the sales POM has crucial role in
increase quality product in desired time and quantity.
• It is more important stage of product life cycle in terms of
making profit form the market.
• Examples:
• Internet Radios

Cont
3: Maturity stage
• During this stage sales grow at a very fast rate and then gradually begin
to stabilize.
• When the sales revenue is increasing, the competitors also
introduce same nature product.
• Thus the competition is increasing .
• The firm is pressure in price cut due to increasing
competition.
• Profit is decreasing due to price cut.
• It needs additional expenditure in product modification.
• None of the new users introduce, so every force focus on
retain the existing customers.
• Examples:
• Cell Phone, Automobiles

Cont
• 4. Decline: This is the stage in which sales of your
product begin to fall. Either everyone that wants to has
bought your product or new, more innovative products
have been created that replace yours.
• Sales revenue reached to zero level, competition reached
pick.
• Product modification and searching the new market is
worthless.
• Reduction of the different expenditure is only way to exist
in market.
• Manufacturing cost control is only weapons to make
profit.
• The company wants to invest to innovate new product in
the place of the existing product
Examples:
• B&W Television

UNIT TWO
Topics in this unit:
• Facility Location – importance; Factor in
Location Analysis; Location Analysis
Techniques
• Facility Layout –Objectives; Advantages; Basic
Types of Layouts. Capacity Planning –
Concepts; Factors Affective Capacity. Planning
Decision

Facility Location
• A facility (plant)is a place where men, material,
money , machinery, and equipment etc are
brought together for manufacture product.
• Plant location refers to the choice of region and
the selection of a particular site for setting up a
business or factory.
• An ideal location is one where the cost of the
product is kept to minimum, with a large market
share, the least risk and the maximum social gain

importance of location planning(plant location)
1. Expansion : If the company wants to expand and diversify its activities, it will
have to search for a new-location for setting up its new business unit. In this
case, it will need a location planning.
2. Cost advantages : If an existing plant is not near a market place, it will
increase the transport cost. This will also increase the cost of the product. So,
to avoid this, the company will search for a new plant location which is near
the market. production.
3. Discovery of raw-material : Generally, a plant must be located at a place
where raw-material is available. For example, if oil and gas are found at some
place, then a new petrochemical plant has to be set up there for processing
purpose.
4. Additional facilities : Plant location-related decisions will have to be taken if
the organization wants additional facilities. New facilities may be necessary
to improve the quality of work, to meet rising demands, etc.

Cont…
5: Mergers : Mergers, joint-ventures, and Amalgamations may lead to
start a new unit at a new-location. It may even require closure of an
existing plant unit. In mergers, production is mostly started at a new
place as per the new-agreement.
6: Political and social changes : Each political party has its own
philosophy. Political changes can lead to changes in economic policies
of the government. This may make the existing location unattractive
for doing business. Social changes may require production of eco-
friendly goods. This may require a change in location.
7: Increasing product demand : Demand for the company's product
may increase at other places, especially in abroad countries. So, the
company will have to start a branch in another state or in foreign
countries. This would lead to a search for new location of plant.
8:Avail tax benefits : Government may announce some tax benefits for
starting a business in rural areas. This may motivate entrepreneurs to
start their business units in remote areas.

Factors Affecting Plant Location
1. Law and order situation,
2. Availability of infrastructure facilities,
3. Good industrial relations,
4. Availability of skilled workforce,
5. Social infrastructure,
6. Investor friendly attitude,
7. Nearness to market,
8. Nearness to raw-materials' source,
9. Nearness to supportive industries and services, and
10. Must meet safety requirements

1. Law and order situation.
• Plant location must be at that place where law and order
situation is in control. Entrepreneurs give a lot of importance to
this factor while locating a business unit in any state or region.
If a state has bad law and order situation, then the business
must not be located within that state, unless it has other
important factors such as availability of heavy or bulky raw
materials.
2. Availability of infrastructure facilities
• Plant location which is selected must have proper infrastructure
facilities. Without good infrastructure facilities, it will be
difficult to do business efficiently. The infrastructure facilities
are the backbone of all industries. Without it, business cannot
be done.
• Crucial infrastructure facilities that help industries to grow:
• Transport and communications,
• Banking and insurance services,
• Regular fuel supply,
• Continuous supply of electricity and water, etc.

Cont
•
3. Good industrial relations
Plant location must be at those places where good industrial-
relations are maintained. Industrial relations become bad, because
of militant and selfish trade unions. Entrepreneurs do not want to
locate their business at places where anti-social elements are
rampant, although there are other favorable factors such as good
infrastructure facilities, cheap labor, etc.
• 4. Availability of skilled workforce
Plant location must be convenient and easily accessible to skilled
workforce. Most businesses require skilled-labor force such as
engineers, management experts, computer programmers, etc. The
entrepreneurs must consider the availability of competent and
skillful-workforce at a particular place to locate their business.
•
5. Social infrastructure
Plant location must have good a social infrastructure. There is a
need for social-infrastructure not only for employees but also for
the development of their families. The availability of social-
infrastructure will increase the employees' welfare.

Cont…
• 6. Investor friendly attitude
Plant location must be in those states whose governments have an
investor-friendly attitude. Government must give attractive
incentives and concessions to those who start business units in
their states. There must not be any bureaucratic control for starting
a business.
• An investor-friendly attitude will not only attract investment, but
will also result in the overall development.
7. Nearness to market
Plant location must be near a market. Every business unit depends
on a market for selling its goods and services. The goods and
services must reach the market on time, and it must be available to
the consumers at a low price. Therefore, this factor is given
importance while selecting location of a plan
8. Nearness to supporting industries
Plant location must be near its supporting industries and services. If
it purchases spare parts from an outside agency, then these
agencies must be located very close to the business. If not, the
business will have to spend a lot of extra money on transport.

Cont…
9. Nearness to raw-materials' source
Plant location must be usually near to the source of raw-material. Raw-
materials' costs are about 50% of the total cost. So, it is important in the
business to get the raw materials in time and at a reasonable price.
Therefore, a business must be located close to the source of raw
material, especially in the case of “Gross Materials
10. Must meet safety requirements
Plant location must meet all essential safety requirements. Due to air,
water and sound pollution, some factories have a bad effect on the
health of the people. Therefore, these factories must be located away
from residential areas. Safety of environment must also be given priority
in this regards.
11. Miscellaneous factors: Following miscellaneous factors also affect a
plant location:
• Availability and cost of land,
• Suitability of land - soil and topography,
• Climatic conditions,
• Location of a similar unit, etc

Location Analysis Techniques
1: Location factor rating
2: Center-of-gravity
3: Load-distance

Location factor rating
• This method involves qualitative and quantitative
inputs, and evaluates alternatives based on
comparison after establishing a composite value for
each alternative.
• Factor Rating consists of six steps:
– Determine relevant and important factors.
– Assign a weight to each factor, with all weights totaling
1.00.
– Determine common scale for all factors, usually 0 to 100.
– Score each alternative.
– Adjust score using weights (multiply factor weight by score
factor); add up scores for each alternative.
– The alternative with the highest score is considered the
best option.

Location Factor Rating
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service
LOCATION FACTOR
.30
.20
.15
.15
.10
.05
.05
WEIGHT
80
100
60
75
65
85
50
Site 1
65
91
95
80
90
92
65
Site 2
90
75
72
80
95
65
90
Site 3
SCORES (0 TO 100)
Weighted Score for “Labor pool and climate” for
Site 1 = (0.30)(80) = 24

Location Factor Rating
24.00
20.00
9.00
11.25
6.50
4.25
2.50
77.50
Site 1
19.50
18.20
14.25
12.00
9.00
4.60
3.25
80.80
Site 2
27.00
15.00
10.80
12.00
9.50
3.25
4.50
82.05
Site 3
WEIGHTED SCORES
Site 3 has the
highest factor rating

Location Factor Rating With Excel

Center-of-Gravity Technique
• Locate facility at center of movement in
geographic area
• Based on weight and distance traveled;
establishes grid-map of area
• Identify coordinates and weights shipped for
each location

Grid-Map Coordinates
where,
x, y = coordinates of new facility at
center of gravity
xi, yi = coordinates of existing facility i
Wi = annual weight shipped from
facility i

n
Wi
i = 1
 xiWi
i = 1
n
x =

n
Wi
i = 1
 yiWi
i = 1
n
y =
x1 x2 x3 x
y2
y
y1
y3
1 (x1, y1), W1
2 (x2, y2), W2
3 (x3, y3), W3

A B C D
x 200 100 250 500
y 200 500 600 300
W 75 105 135 60
y
700
500
600
400
300
200
100
0 x700500 600400300200100
A
B
C
D
(135)
(105)
(75)
(60)
Miles
Miles

x = = = 238
n
 Wi
i = 1
 xiWi
i = 1
n

n
Wi
i = 1
 yiWi
i = 1
n
y = = = 444
(200)(75) + (500)(105) + (600)(135) + (300)(60)
75 + 105 + 135 + 60
(200)(75) + (100)(105) + (250)(135) + (500)(60)
75 + 105 + 135 + 60

A B C D
x 200 100 250 500
y 200 500 600 300
W 75 105 135 60
y
700
500
600
400
300
200
100
0 x700500 600400300200100
A
B
C
D
(135)
(105)
(75)
(60)
Miles
Miles
Center of gravity (238, 444)

Load-Distance Technique
• Compute (Load x Distance) for each site
• Choose site with lowest (Load x Distance)
• Distance can be actual or straight-line

Load-Distance Calculations
 li di
i = 1
n
LD =
LD = load-distance value
li = load expressed as a weight, number of trips or units
being shipped from proposed site and location i
di = distance between proposed site and location i
di = (xi - x)2 + (yi - y)2
(x,y) = coordinates of proposed site
(xi , yi) = coordinates of existing facility
where,
where,

Load-Distance
Potential Sites
Site X Y
1 360 180
2 420 450
3 250 400
Suppliers
A B C D
X 200 100 250 500
Y 200 500 600 300
Wt 75 105 135 60
Compute distance from each site to each supplier
= (200-360)2 + (200-180)2dA = (xA - x1)2 + (yA - y1)2Site 1 = 161.2
= (100-360)2 + (500-180)2dB = (xB - x1)2 + (yB - y1)2 = 412.3
dC = 434.2 dD = 184.4

Load-Distance
Site 2 dA = 333 dC = 226.7dB = 323.9 dD = 170
Site 3 dA = 206.2 dC = 200dB = 180.3 dD = 269.3
Compute load-distance
i = 1
n
 li diLD =
Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063
Site 2 = (75)(333) + (105)(323.9) + (135)(226.7) + (60)(170) = 99,789
Site 3 = (75)(206.2) + (105)(180.3) + (135)(200) + (60)(269.3) = 77,555*
* Choose site 3

Facility Layout
• After choosing the facility's location, the next stage in
operations planning is to design the best physical
layout for the facility. The available space needs to be
assessed with workstations, equipment, storage, and
other amenities need to be arranged.
• Plant )Facility ( layout refers to the arrangement of
physical facilities such as machines, equipment, tools,
furniture etc. in such a manner so as to have quickest
flow of material at the lowest cost and with the least
amount of handling in processing the product from the
receipt of raw material to the delivery of the final
product.

Objectives of Plant Layout:
• Proper and efficient utilization of available floor space
· Transportation of work from one point to another
point without any delay
· Proper utilization of production capacity.
· Reduce material handling costs
· Utilize labour efficiently
· Reduce accidents
· Provide for volume and product flexibility
· Provide ease of supervision and control
· Provide for employee safety and health
· Allow easy maintenance of machines and plant.
· Improve productivity

TYPES OF LAYOUT:
There are mainly four types of plant layout:
• (a) Product or line layout
• (b) Process or functional layout
• (c) Fixed position or location layout
• (d) Combined, cellular or group layout

1:PRODUCT OR LINE LAYOUT:
• In this type of layout the machines and equipment's
are arranged in one line depending upon the sequence
of operations required for the product. It is also called
as line layout. The material moves to another machine
sequentially without any backtracking or deviation i.e
the output of one machine becomes input of the next
machine. It requires a very little material handling.
• It is used for mass production of standardized
products.

2: PROCESS LAYOUT:
• In this type of layout the machines of a similar
type are arranged together at one place. This
type of layout is used for batch production. It is
preferred when the product is not standardized
and the quantity produced is very small.
Disadvantages of Process layout:
• Material handling costs are high due to
backtracking. More skilled labour is required
resulting in higher cost.

3: COMBINED LAYOUT:
• A combination of process & product layout is known as
combined layout.
• Manufacturing concerns where several products are
produced in repeated numbers with no likelihood of
continuous production, combined layout is followed
4: FIXED POSITION OR LOCATION LAYOUT:
• Fixed position layout involves the movement of
manpower and machines to the product which remains
stationary. The movement of men and machines is
advisable as the cost of moving them would be lesser.
This type of layout is preferred where the size of the
job is bulky and heavy. Example of such type of layout
is locomotives, ships, boilers, generators, wagon
building, aircraft manufacturing, etc.

Advantages of Fixed position layout:
• The investment on layout is very small.
• The layout is flexible as change in job design and operation
sequence can be easily incorporated.
Disadvantages of Fixed position layout:
• ·As the production period being very long so the capital
investment is very high.
• Very large space is required for storage of material and
equipment near the product.
• As several operations are often carried out simultaneously
so there is possibility of confusion and conflicts among
different workgroups.

Capacity Planning
• Capacity: amount of goods that a firm is capable of
producing over a specified period of time
• Capacity planning is the process of determining the
production capacity needed by an organization to meet
changing demand for its products.
• Capacity is the rate of productive capability of a facility.
Capacity is usually expressed as volume of output per time
period. It is the process of determining the necessary to
meet the production objectives.
• Capacity planning is the first step when an organization
decided to produce more or a new product. Once capacity
is evaluated and a need for a new expanded facility is
determined, facility location and process technology
activities occur

The objectives of capacity planning
are:
• To identify and solve capacity problem in a timely manner
to meet consumer needs.
• To maintain a balance between required capacity and
available capacity.
• The goal of capacity planning is to minimize this
discrepancy.
 Need for CP
• Capacity planning is done in order to estimate whether the
demand is higher than capacity or lower than capacity. That
is compare demand versus capacity.
• It helps an organization to identify and plan the actions
necessary to meet customer’s present and future demand.
Capacity is calculated as: (number of machines or workers) ×
(number of shifts) × (utilization) × (efficiency).

Factors Affecting Capacity Planning
• Effective capacity planning is dependent upon factors
like production facility (layout, design, and location),
product line or matrix, production technology, human
capital (job design, compensation), operational
structure (scheduling, quality assurance) and external
structure ( policy, safety regulations)
OR
• Controlled factors – Labour Employed, Machines,
tooling's, overtime work, sub contracting
• Less controlled factors – Absenteeism, Labour
performance, Machine breakdown, lockouts, accidents
etc

Types of Capacity
• Design capacity
maximum output rate or service capacity an
operation, process, or facility is designed for
Effective capacity
Design capacity minus allowances such as
personal time, maintenance, and scrap
Actual output
rate of output actually achieved--cannot
exceed effective capacity.

• Capacity Decision
• Major considerations in capacity decisions are:a)What
size of plant? How much capacity to install? b)When
capacity is needed ? When to phase-in capacity
or phase-out capacity?c)At what cost? How to budget
for the cost?
• Decisions of Capacity Planning
Amount of capacity needed
Timing of changes
Need to maintain balance
Extent of flexibility of facilities

Materials Management
It is concerned with planning, organizing and
controlling the flow of materials from their
initial purchase through internal operations to
the service point through distribution.
OR
Material management is a scientific technique,
concerned with Planning, Organizing &Control
of flow of materials, from their initial purchase
to destination.

AIMS OF MM
To get :
• 1. The Right quality
• 2. Right quantity of supplies
• 3. At the Right time
• 4. At the Right place
• 5. For the Right cost

objectives of material management
A. Main objectives
• 1. To purchase quality goods at minimum cost
• 2. To exercise control over materials
• 3. To maintain the continuity of production & sales by regular
supply of materials
• 4. To maintain standards of quality
• 5. To establish good relationships with the suppliers
• 6. To maintain the efficiency of materials department
B. Subsidiary objectives
• 1. To participate in make or buy decision process
• 2. To recommend use of substitute materials
• 3. To be helpful in new product development
• 4. To be helpful in standardization of products manufactured

Functions of MM:
1:Planning and control:
• The planning and control functions are inventory
management , production planning and scheduling.
2:Purchasing
• Purchasing functions are buying, subcontracting,
value analysis and follow ups.
3:Distribution
• Distribution functions are receiving , packaging,
shipping, transportation and storage, making it the
Integrated Materials Management.
4:Physical distribution

Scope of materials management
• 1.Purchasing of materials
• 2. Storage (Store keeper)
• 3. Inventory control
• 4. Clearing & forwarding
• 5. Materials handling

Purchase Management
• Purchasing is the first phase of Materials Management.
Purchasing means procurement of goods and services
from some external agencies. The object of purchase
department is to arrange the supply of materials, spare
parts and services or semi-finished goods, required by
the organisation to produce the desired product, from
some agency or source outside the organisation
• According to Westing, Fine and Zenz “Purchasing is a
managerial activity that goes beyond the simple act of
buying. It includes research and development for the
proper selection of materials and sources, follow-up to
ensure timely delivery; inspection to ensure both
quantity and quality; to control traffic, receiving,
storekeeping and accounting operations related to
purchases.”

function of purchasing management
At first glance, it may seem to be to find and purchase a
quantity of material for the best price. But price is not the
only concern. Low-priced material may not be a bargain if
it is of unacceptable quality or if delivery is not reliable.
Clearly, the purchasing function involves more than
obtaining the best price. It also involves buying the best
value, which means buying:
• the right quantity and quality
• at the best price
• from suppliers who are reliable and provide good
service

Objectives of Purchasing:
The classical definition of objectives of purchasing is to buy materials
and services of the right quality , in the right quantity, at the right
place , from the right source and at the right time.
However , in general management parlance the objectives of
purchasing are:
• To support company operations with an uninterrupted flow of
materials and services.
• To buy competitively and wisely
• To help keep a minimum Inventory
• To develop reliable alternate sources of supply
• To develop good vendor relationship and a good continuing
supplier relationship
• To achieve maximum integration with the other departments of
the firm
• To train and develop highly competent personnel

Store-Keeping
• After the completion of purchase procedure, the
next important aspect Of materials management
is storekeeping.
• Store Management includes various
responsibilities such as receiving the raw
material, protecting the raw materials protecting
from damage, spoilage and keep the finished
goods until the goods are dispatched. Store
management also includes distribution of
material in right quantity at the right time and at
the right place.

Function of Store Management:
• 1. Receiving, handling and speedy issue of material.
2. Custodian of gods in stores against damage and
pilferage (hefting).
3. To ensure regular supply o material.
4. Effective utilization of store space.
5. To provide services to the organization in most
economical way.
6. To keep the details of items available in the store
update.
7. Proper identification and easy location of items.
8. Physical checking of stock.

Objectives Of Store-keeping
The following are the main objectives of store-
keeping
• * To avoid over and under-stocking of materials.
• * To maintain systematic records of materials.
• * To protect materials from losses and damages.
• * To minimize the storage costs of materials
• To ensure proper and continuous control over
materials.
• To ensure most effective utilization of available
storage space and workers engaged in the
process of storekeeping.

Types of stores
There are basically two broad classes :
• 1:Functional Stores: It depends on the use to which the
material is put – chemicals, tools, raw materials stores,
etc.
Functional Stores can be further classified as:
 Raw materials store:
 Production Store:
 Work-in-progress Store:
 Finished Goods store:
 Spare parts store:
2: Physical Stores: It depends on the size and location –
Central stores, Sub-stores, Transit stores, Site stores etc.

1:Functional Stores:
• Raw materials store:
This is where raw materials used in the factory are stored.
• Production Store: Production also requires a large number
of materials, generally called "consumables", - eye-shields,
cutting oils, abrasives, gloves, aprons, jigs, small tools etc.
• Salvage Store:
Here materials rejected on the factory floor are stored
either with a view to salvage them or to sell them as scrap
• Receipt Store:
This is where goods are received from vendors or those
cleared from the railway station, airport or the docks. The
materials arriving here have to be retained until they are
inspected, finally accepted and sent on to the respective
places for storage, or directly to where they will be used.

CONT…
• Finished Goods store:
Finished products of the company meant for dispatch
to customers or for transfer to another stock point or
distribution center are kept here.
• Work-in-progress Store:
In many cases a particular shops produce an item in
batches, e.g., 1000 units. The other shops might not be
able to reach this figure or the actual quantity required
might only be 200. Here rest of the 800 units in semi-
finished from are kept in the WIP Store for future use.
This is neither raw materials nor finished goods. It is in
an intermediate state.

2: Physical Stores
There can be various types of stores based on the
quantity of stocks held or distance from the point of
usage, like central stores sub-stores, transit stores, site
store etc.
• Central store:
There can be a central store serving three or four
factories or several shops in a large factory or it can be
a central warehouse containing finished goods. The
word ‘central’ only denotes that it severs various units
each of which may have separate sub-stores or
departmental stores. Central stores also exist in multi-
plant situations.

CONT…
• Sub-store: A sub-store is located at the place of usage.
It can be even within the shop floor.
• Departmental Store:
This serves a particular department of a factory. For
example, in a textile mill there can be several
departments like spinning, weaving, bleaching,
printing, etc. each of which can be served by a separate
store. The reason behind this is that each requires
sparate kinds of materials.
• Site store:
This is usually at a project site containing building or
construction materials like cement, steel, tools, etc.
Transit store: as its name implies, this is where goods
are stored for a temporary period.

INVENTORY MANAGEMENT
• Scientific method of finding out how much
stock should be maintained in order to meet
the production demands and be able to
provide right type of material at right time, in
right quantities and at competitive prices
• inventory is actually money, which is available
in the shape of materials (raw materials, in-
process and finished products), equipment,
storage space, work-time etc.

OBJECTIVES
• Utilizing of scare resources (capital) and investment
judiciously.
• b) Keeping the production on as on-going basis.
• c) Preventing idleness of men, machine and morale. 21
• d) Avoiding risk of loss of life (moral & social).
• e) Reducing administrative workload.
• f) Giving satisfaction to customers in terms of quality-
care, competitive price and prompt delivery
• . g) Inducing confidence in customers and to create
trust and faith.

Factors Affecting Inventory
?????????????????????????????

Motives for holding inventories
• Transaction motive- to facilitate smooth
production and sales operations.
• Precautionary motive – to guard against the
risk of unpredictable changes in demand and
supply / other forces.
• Speculative motive – influences the decision
to increase or reduce inventory level to take
advantage of price fluctuations.
NIAZ SAHIL

Types/Classification of Inventory:
inventory may be classified into two types namely
1. Direct Inventories:
 (i) Raw materials:
 (ii) Semi-finished Goods:
 (iii) Finished Goods:
 (iv) Spare Parts:
2. Indirect Inventories:
• Indirect inventories include those items which are
necessary for manufacturing but do not become
component of the finished goods. They normally
include petrol, maintenance materials, office
materials, grease, oil lubricants etc.
NIAZ SAHIL

Inventory Control
The forms of inventories can be classified into three
categories:
• (i) Raw Materials: These are those goods which
have been purchased and stored for future
productions.
• (ii) Work-in-Progress: These are the goods which
have been committed to production but the finished
goods have not yet been produced.
• (iii) Finished Goods: These are the goods after
production process is complete. Say, these are the
final products of the production process ready for
sale

costs of inventories:
(i) Ordering Costs:
• These include costs which are associated with placing
of orders to purchase raw materials and components.
Clerical and administrative salaries, rent for the space
occupied, postage, telegrams, bills, stationery, etc. are
the examples of ordering costs.
(ii) Carrying Costs:
• These include costs involved in holding or carrying
inventories like insurance charges for covering risks,
rent for the floor space occupied, wages of labourers,
wastages, obsolescence, or deterioration, thefts,
pilferages, etc. These also include ‘opportunity costs.’
This simply means had the money blocked in
inventories been invested elsewhere in the business, it
would have earned a certain return.

Models of Inventory Management:
• All models are classified into two major types:
• (i) Deterministic Models, and
• (ii) Probabilistic Models
In brief, the deterministic models are built on the assumption
that there is no uncertainty associated with demand and
replenishment of inventories. On the contrary, the
probabilistic models take cognizance of the fact that there is
always some degree of uncertainty associated with the
demand pattern and lead time of inventories.
• Usually, the following three deterministic models are in
use:
• 1. Economic Ordering Quantity (EOQ) Model,
• 2. ABC Analysis,
• 3. Inventory Turnover Ratio,

(EOQ) model
• As the name suggests, Economic order quantity (EOQ)
model is the method that provides the company with
an order quantity. This order quantity figure is where
the record holding costs and ordering costs are
minimized. By using this model, the companies can
minimize the costs associated with the ordering and
inventory holding.
• Definition
• The economic order quantity (EOQ) is a model that is
used to calculate the optimal quantity that can be
purchased or produced to minimize the cost of both
the carrying inventory and the processing of purchase
orders or production set-ups.

assumption of the EOQ model
• The cost of the ordering remains constant.
• The demand rate for the year is known and evenly
spread throughout the year.
• The lead time is not fluctuating (lead time is the
latency time it takes a process to initiate and
complete).
• No cash or settlement discounts are available, and the
purchase price is constant for every item.
• The optimal plan is calculated for only one product.
• There is no delay in the replenishment of the stock,
and the order is delivered in the quantity that was
demanded, i.e. in whole batch.

Formula
Where
Q = optimal order quantity
• D = units of annual demand
• S = cost incurred to place a single order or setup
• H = carrying cost per unit
• This formula is derived from the following cost
function:
• Total cost = purchase cost + ordering cost +
holding cost

Reorder Level
• reorder level (or reorder point) is the inventory
level at which a company would place a new
order or start a new manufacturing run.
• Re-order level is a level of material at which the
storekeeper should initiate the purchase
requisition for fresh supplies. When the stock-in-
hand comes down to the re-ordering level, it is an
indication that an action should be taken for
replenishment or purchase.

The re-order level is calculated as
follows:
• Re-order Level= Minimum Level(Safety stock) + (Average
lead time x Average consumption)
• OR
Re-order Level= Maximum Consumption x Maximum Re-
ordering Period
• Illustration
Suppose,
Maximum consumption per day = 400 units
Minimum consumption per day = 200 units
Re-order period = 8 to 10 days
Then,
Re-order Level = Maximum consumption x Maximum re-
order period
= 400 units x 10 days = 4000 units

Reorder Level = Lead Time in Days × Daily Average Usage
Reorder Level = Lead Time in Days × Daily Average
Usage
• Lead time is the time it takes the supplier or the
manufacturing process to provide the ordered
units.
• Daily average usage is the number of units used
each day.
• If a business is holding a safety stock to act as
buffer if daily usage accelerates the reorder level
would increase by the level of safety stock.
• Reorder Level = Lead Time in Days × Daily
Average Usage + Safety Stock.

CONT..
• Examples 1:ABC Ltd. is a retailer of footwear. It sells 500 units of
one of a famous brand daily. Its supplier takes a week to deliver
the order.
• The inventory manager should place an order before the
inventories drop below 3,500 units (500 units of daily usage
multiplied with 7 days of lead time) in order to avoid a stock-out.
• Example 2: ABC Ltd. has decided to hold a safety stock
equivalent to average usage of 5 days. Calculate the reorder
level.
• Safety stock which ABC Ltd. has decided to hold equals 2,500
units (500 units of daily usage multiplied by 5 days).
• In this scenario reorder level would be 6,000 units (2,500 of
safety stock plus 3,500 units based on 7 days of lead time).

ABC analysis
The ABC analysis provides a mechanism for identifying different
categories of stock that will require different management and
controls.
The ABC analysis suggests that inventories of an organization are
not of equal value. Thus, the inventory is grouped into three
categories (A, B, and C) in order of their estimated importance.
• A items are very important for an organization. Because of the
high value of these A items, frequent value analysis is
required. In addition to that, an organization needs to choose
an appropriate order pattern (e.g., "Just- in- time") to avoid
excess capacity.
• B items are important, but of course less important, than A
items and more important than C items. Therefore, B items
are intergroup items.
• C items are marginally important.

ABC analysis
An analysis of a range of items that have different levels
of significance and should be handled or controlled
differently.
• The ABC analysis is a business term used to define an
inventory categorization technique often used in
material management. It is also known as "Selective
Inventory Control. " Policies based on ABC analysis:
 A: ITEMS: very tight control and accurate records
 B: ITEMS: less tightly controlled and good records
 C: ITEMS: simplest controls possible and minimal
records

Maintenance Management
• Modern maintenance management is not to
repair broken equipment rapidly. Modern
maintenance management is to keep the
equipment running at high capacity and produce
quality products at lowest cost possible.
• Maintenance is a set of organized activities that
are carried out in order to keep the item in its
best operational condition with minimum cost
required.

OBJECTIVES
To increase functional reliability of production
facilities.
 To enable desired quality through correctly
adjusted, serviced and operated equipment's.
 To maximize the useful life of equipment's.
 To minimize cost of production.
To minimize frequency of interruptions.
To enhance the safety of manpower.

Impact of Poor Maintenance
• Production capacity:
• Production costs:
• Product and service quality:
• Employee or customer safety:
• Customer satisfaction:
Areas of maintenance management
Civil Maintenance
Mechanical maintenance
Electrical Maintenance

Maintenance
Planned
Maintenance
Preventive
Maintenance
Running
maintenance
Shutdown
maintenance
Scheduled
maintenance
Corrective
Maintenance
Breakdown
maintenance
Shutdown
maintenancePredictive
Maintenance
Unplanned
maintenance
Emergence
maintenance
•
TYPES OF MAINTANANCE M

Planned Maintenance-
In planned maintenance the maintenance action
is carried out with some fore thoughts, prior
planning , record keeping and control action.
These can be further classified as :-
 Preventive maintenance
 Corrective maintenance
 Predictive maintenance

A: Preventive maintenance
 It is based upon the principle that ‘prevention is better than
cure’.
 Involves performing maintenance activities before the
equipment fails.
 It is a set of activities that are performed on plant equipment,
machinery, and systems before the occurrence of a failure in
order to protect them and to prevent or eliminate any
degradation in their operating conditions.
 Or the maintenance carried out at predetermined intervals or
according to prescribed criteria and intended to reduce the
probability of failure or the degradation of the functioning
and the effects limited.
 It has three types
 Running maintenance
 Scheduled maintenance
 Shut down maintenance

B: Corrective maintenance
 In this type, actions such as repair, replacement, or restore will be
carried out after the occurrence of a failure in order to eliminate the
source of this failure or reduce the frequency of its occurrence.
 It also include the different types of actions like
typical adjustment of redesign equipment.
 The difference between corrective maintenance and
preventive maintenance is that for the corrective
maintenance, the failure should occur before any
corrective action is taken.
 It is of two types
1. Breakdown maintenance
2. Shutdown maintenance

Cont..
Breakdown maintenance
 It is an emergency based policy in which the plant
or equipment is operated until it fails and then it
is brought back into running condition by repair.
 The maintenance staff locate any mechanical,
electrical or any other fault to correct it
immediately.
Shutdown maintenance
• That can only be performed when the
equipment, machine, or plant has been put out
of service.

cont
C: Predictive maintenance:
• As the names implies it involves the prediction of
the failure before it occurs, identifying the root
cause for those failures symptoms and
eliminating those causes before they result in
extensive damage of the equipment.
• Type of maintenance performed continuously or
at intervals according to the requirements to
diagnose and monitor a condition or system.

2: Unplanned Maintenance:
• Maintenance action which is carried out without
any fore thoughts or prior planning is called
unplanned maintenance.
• Emergency maintenance is one of the example of
unplanned maintenance.
• In this type of maintenance the maintenance
action is executed with the help of all available
maintenance resources in least possible time,
without any major time lag.
• Examples are gas leakage in chemical plant, fire
hazards, breakdown of boiler, turbine etc.

Production Planning & Control
•

Production planning and control
• For efficient, effective and economical operation in a
manufacturing unit of an organization, it is essential to
integrate the production planning and control system.
Production planning and subsequent production control
follow adaption of product design and finalization of a
production process.
• Production planning and control address a fundamental
problem of low productivity, inventory management and
resource utilization.
• Production planning is required for scheduling, dispatch,
inspection, quality management, inventory management,
supply management and equipment management.
Production control ensures that production team can
achieve required production target, optimum utilization
of resources, quality management and cost saving

Production planning
• “The planning of industrial operations involves
four considerations, namely, what work shall be
done, how the work shall be done and lastly,
when the work shall be done”.
•
Production planning is an activity that is
performed before the actual production process
takes place. It involves determining the schedule
of production, sequence of operations, economic
batch quantities, and also the dispatching
priorities for sequencing of jobs.

Production control
•
Production control is mainly involved in implementing
production schedules and is the corollary to short-term
production planning or scheduling. Production control
includes initiating production, dispatching items,
progressing and then finally reporting back to
production planning.
• In general terms, production planning means planning
of the work to be done later and production control
refers to working out or the implementation of the
plan.

Objectives of production planning &
control• To make all preparations to manufacture goods within
specified time & cost.
• To make available supply of materials, parts & components at
the right time.
• To ensure most economical use of plant & equipment by
scheduling best machine utilization.
• To provide information for production management &
distribution of goods.
• To make available materials, machines, tools, equipment &
manpower in the required quality & quantity & at the specified
time.
• To ensure production of goods in the required quantities of the
specified quality at the pre-determined time.
• To keep the plant free from production bottleneck.
• To maintain spare capacity to deal with rush orders.

Some of the important elements involved in the process
of production planning and control

Cont…
A)Production planning
• Planning refers to deciding in advance what is to be done in
future. A separate planning department is established in
the organisation which is responsible for the preparation of
policies and plans with regard to production to be
undertaken in due course.
(b) Routing:
• Production routing is a process concerned with determining
exact route or path, a product has to follow right from raw
material till its transformation into finished product.
• routing is concerned with the selection of the most
economical and appropriate path for the product in the
process of final completion from raw material to finished
product.

CONT..
(c) Scheduling:
• Scheduling in simple words means fixation of time and
date when each operation is to be commenced and
completed.
• “The determination of the time that should be required
to perform each operation and also the time necessary
to perform the entire series as routed, making allowance
for all factors concerned.”
(d) Dispatching:
• Dispatching relates to the process of initiating
production in accordance with pre-conceived production
plan. It is concerned with giving practical shape to the
production plan. This includes issuing necessary orders
and instructions and other important guidelines and
information pertaining to work.

CONT
E}Follow up:
• Every production program involves determination
of the progress of work, removing bottlenecks in
the flow of work and ensuring that the
productive operations are taking place in
accordance with the plans.
• All problems or deviations are investigated and
remedial measurer are undertaken to ensure the
completion of work by the planned date

CONT…
F)inspection
• The function of inspection is primarily carried to ensure
whether desired quality of products has been achieved
or not. “Inspection is the art of comparing materials,
product or performance with established standards.”
G)Corrective measures:
• Corrective action may involve any of those activities
of adjusting the route, rescheduling of work changing
the workloads, repairs and maintenance of machinery
or equipment, control over inventories of the cause
of deviation is the poor performance of the employees.

production and operations management(POM) Complete note

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production and operations management(POM) Complete note