INTRODUCTION

TO
PRODUCTION PLANNING AND CONTROL
OBJECTIVES AND BENEFITS

 Minimize costs / maximize profits

 Maximize customer service

 Minimize inventory investment

 Minimize changes in production rates

 Minimize changes in work-force levels

 Maximize the utilization of plant and equipment

FUNCTIONS OF PRODUCTION
CONTROL
 Production function encompasses the activities of procurement, allocation
and utilization of resources.

 The main objective of production function is to produce the goods and

services demanded by the customers in the most efficient and economical
way.

 Therefore efficient management of the production function is of utmost

importance in order to achieve this objective.
TYPES OF PRODUCTION

 Continuous production

 Job or unit production

 Intermittent production
CONTINUOUS PRODUCTION

 It refers to the production of standardized

products with a standard set of process and
operation sequence in anticipation of demand.
 It is also known as mass flow production or
assembly line production.
 This system ensures less work in process
inventory and high product quality but involves
large investment in machinery and equipment.
JOB OR UNIT PRODUCTION

 It involves production as per customer‘s

specification each batch or order consists
of a small lot of identical products and is
different from other batches.
 The system requires comparatively
smaller investment in machines and
equipment.
 It is flexible and can be adapted to
changes in product design and order size
without much inconvenience.
INTERMITTENT PRODUCTION

 Under this system the goods are

produced partly for inventory and partly
for customer's orders.
 E.g. components are made for inventory
but they are combined differently for
different customers. .
 Automobile plants, printing presses,
electrical goods plant
PRODUCT DESIGN
 Product design is a strategic decision as the image and
profit earning capacity of a small firm depends largely on
product design.
 Once the product to be produced is decided by the
entrepreneur the next step is to prepare its design
 Product design consists of form and function. The form
designing includes decisions regarding its shape, size,
color and appearance of the product.
 The functional design involves the working conditions of
the product.
PRODUCT DEVELOPMENT
(a) Standardization
(b) Reliability
(c) Maintainability
(d) Servicing
(e) Reproducibility
(f) Sustainability
(g) Product simplification
(h) Quality Commensuration with cost
(i) Product value
(j) Consumer quality
(k) Needs and tastes of consumers.
MARKETING ASPECT
 Sales and Marketing is a key function whose participation is often
hard to enlist.
 Sales and Marketing are critical functions in this process, since they
provide the starting point of the planning and scheduling
process -- the forecasts and customer order demands
 They are also vital from the viewpoint of providing the proper
customer perspective whenever changes need to be made to plans
and schedules based on mismatches of resources to customer
demands.
 Only with a proper level of participation in Planning and Scheduling,
can Sales and Marketing optimally leverage its performance and
create a trusting and consensus-based working relationship with
Manufacturing, Purchasing, Planning, Engineering and all other
functions in the company.
FUNCTIONAL AND
OPERATIONAL ASPECT
DURABILITY AND DEPENDABILITY
Dependability for a system gathers the following attributes or non-
functional requirements:
Availability: readiness for correct service
Reliability: continuity of correct service
Maintainability: to undergo modifications and repairs

Durability aspects concerns about the way the production is going

to serve the purpose with out any hurdles for a prolonged period of
time scale
AESTHETIC ASPECT

Difference between
aesthetic and non aesthetic effect
PROFIT CONSIDERATION
 Taking the time to calculate the profit margin
for a product line or even for a company as a
whole is essential to determining if a company is
growing, maintaining its current market share,
or is losing customers and is in danger of not
making a profit.
 Many companies choose to look at profit
margin ratios on a regular basis, just to make
sure that sales are headed in the right direction,
and that expenses are being contained in order
to maximize the returns from those sales.
STANDARDIZATION
 Sizes for screws, nuts bolts and other threaded
fasteners were first standardized based on work of
by Joseph Whitworth..
 Pipe sizes
 Shoe size standardization
 The screw base size and thread dimensions of electric
lamp bulbs was standardized by Thomas Edison.
 Electrical voltage and frequency
 Electrical wiring and device standards
SIMPLIFICATION AND
SPECIALIZATION
 The production system should be as
simple as possible to make it easy for
understanding as well as easy for
execution
 Specialization of production infers the
special production system for specific
products or services.
BREAK EVEN ANALYSIS

The break-even chart is a

graphical representation of
costs at various levels of
activity shown on the same
chart as the variation of
income (or sales, revenue)
with the same variation in
activity. The point at which
neither profit nor loss is made
is known as the "break-even
point"
ECONOMICS OF NEW
DESIGN
Product and Service Design

Major factors in design strategy

Cost
Quality
Time-to-market
Customer satisfaction
Competitive advantage

Product and service design – or redesign – should be

closely tied to an organization’s strategy

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Product or Service Design Activities

1. Translate customer wants and needs into product and service

requirements

2. Refine existing products and services

3. Develop new products and services

4. Formulate quality goals

5. Formulate cost targets

6. Construct and test prototypes

7. Document specifications

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Reasons for Product or Service Design
 Economic

 Social and demographic

 Political, liability, or legal

 Competitive

 Cost or availability

 Technological

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Objectives of Product and Service
Design
 Main focus

◦ Customer satisfaction

◦ Understand what the customer wants

 Secondary focus

◦ Function of product/service

◦ Cost/profit

◦ Quality

◦ Appearance

◦ Ease of production/assembly

◦ Ease of maintenance/service

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Designing For Operations
 Taking into account the capabilities of the organization in designing

goods and services.

 Failure to take this into account can:

◦ Reduce productivity

◦ Reduce quality

◦ Increase costs

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Designers Adhere to Guidelines
 Produce designs that are consistant with the goals of the company

 Give customers the value they expect

 Make health and safety a primary concern

 Consider potential harm to the environment

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Other Issues in Product and Service
Design
 Product/service life cycles

 How much standardization

 Mass customization

 Product/service reliability

 Robust design

 Degree of newness

 Cultural differences

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 Life Cycles of Products or Services

Saturation

Maturity
Deman

Decline
Growth
d

Introduction

Time

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Standardization
 Standardization
◦ Extent to which there is an absence of variety in
a product, service or process
 Standardized products are immediately
available to customers

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Advantages of Standardization
 Fewer parts to deal with in inventory &
manufacturing
 Design costs are generally lower
 Reduced training costs and time
 More routine purchasing, handling, and
inspection procedures
 Quality is more consistent

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Advantages of Standardization (Cont’d)
 Orders fillable from inventory
 Opportunities for long production runs and
automation
 Need for fewer parts justifies increased
expenditures on perfecting designs and
improving quality control procedures.

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Disadvantages of Standardization

 Designs may be frozen with too many

imperfections remaining.
 High cost of design changes increases
resistance to improvements.
 Decreased variety results in less consumer
appeal.

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Modular Design

Modular design is a form of standardization in

which component parts are subdivided into
modules that are easily replaced or
interchanged. It allows:
◦ easier diagnosis and remedy of failures
◦ easier repair and replacement
◦ simplification of manufacturing and assembly

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Reliability

 Reliability: The ability of a product, part, or system to perform its

intended function under a prescribed set of conditions

 Failure: Situation in which a product, part, or system does not

perform as intended

 Normal operating conditions: The set of conditions under which

an item’s reliability is specified

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 Improving Reliability

• Component design
• Production/assembly techniques
• Testing
• Redundancy/backup
• Preventive maintenance procedures
• User education
• System design

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Product Design

 Product Life Cycles

 Robust Design
 Concurrent Engineering
 Computer-Aided Design
 Modular Design

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 Robust Design

Robust Design: Design that results in

products or services that can function
over a broad range of conditions

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Degree of Newness
1. Modification of an existing product/service
2. Expansion of an existing product/service
3. Clone of a competitor’s product/service
4. New product/service

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Global Product Design
 Virtual teams
◦ Uses combined efforts of a team of designers
working in different countries
◦ Provides a range of comparative advantages
over traditional teams such as:
 Engaging the best human resources around the
world
 Possibly operating on a 24-hr basis
 Global customer needs assessment
 Global design can increase marketability

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Phases in Product Development Process

1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development
6. Design review
7. Market test
8. Product introduction
9. Follow-up evaluation

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Idea Generation

Supply chain based

Ideas Competitor based

Research based

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Reverse Engineering

Reverse engineering is the

dismantling and inspecting
of a competitor’s product to
discover product improvements.

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Research & Development (R&D)
 Organized efforts to increase scientific
knowledge or product innovation & may
involve:
◦ Basic Research advances knowledge about a
subject without near-term expectations of
commercial applications.
◦ Applied Research achieves commercial
applications.
◦ Development converts results of applied research
into commercial applications.

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Manufacturability

 Manufacturability is the ease of

fabrication and/or assembly which is
important for:
◦ Cost
◦ Productivity
◦ Quality

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 Remanufacturing
 Remanufacturing: Refurbishing used products by
replacing worn-out or defective components.
◦ Remanufactured products can be sold for 50% of the
cost of a new producer
◦ Remanufacturing can use unskilled labor
◦ Some governments require manufacturers to take
back used products
 Design for Disassembly (DFD): Designing
products so that they can be easily taken apart.

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Component Commonality
 Multiple products or product families that
have a high degree of similarity can share
components
 Automakers using internal parts
◦ Engines and transmissions
◦ Water pumps
◦ Etc.
 Other benefits
◦ Reduced training for assemble and installation
◦ Reduced repair time and costs
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Service Design

 Service is an act
 Service delivery system
◦ Facilities
◦ Processes
◦ Skills
 Many services are bundled with products

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Service Design

 Service design involves

◦ The physical resources needed
◦ The goods that are purchased or consumed by
the customer
◦ Explicit services
◦ Implicit services

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Service Design
 Service
◦ Something that is done to or for a customer
 Service delivery system
◦ The facilities, processes, and skills needed to
provide a service
 Product bundle
◦ The combination of goods and services provided
to a customer
 Service package
◦ The physical resources needed to perform the
service
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 Differences Between Product
and Service Design
 Tangible – intangible
 Services created and delivered at the same time
 Services cannot be inventoried
 Services highly visible to customers
 Services have low barrier to entry
 Location important to service
 Range of service systems
 Demand variability

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Service Systems
 Service systems range from those with
little or no customer contact to very high
degree of customer contact such as:
◦ Insulated technical core (software
development)
◦ Production line (automatic car wash)
◦ Personalized service (hair cut, medical
service)
◦ Consumer participation (diet program)
◦ Self service (supermarket)
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Phases in Service Design

1. Conceptualize
2. Identify service package components
3. Determine performance specifications
4. Translate performance specifications into
design specifications
5. Translate design specifications into delivery
specifications

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 Operations Strategy

1. Increase emphasis on component

commonality
2. Package products and services
3. Use multiple-use platforms
4. Consider tactics for mass
customization
5. Look for continual improvement
6. Shorten time to market

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 Shorten Time to Market

1. Use standardized components

2. Use technology
3. Use concurrent engineering

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