PRODUCTION PLANNING

AND CONTROL
B.TECH. DEGREE COURSE
SCHEME AND SYLLABI
(2002-03 ADMISSION ONWARDS)
MAHATMA GANDHI UNIVERSITY
KOTTAYAM
KERALA
PRODUCTION PLANNING AND CONTROL
M 803 2+1+0

Module 1
Introduction to PPC: need for PPC, effect, advantages, functions and problems
of PPC.
Forecasting: methods of sales forecasting-forecasting for new products-
forecasting for established products-time series analysis for sale forecasting
long term forecasting methods of estimating Sales trend- problems- correlation
analysis.
Module 2
Production planning: objectives-characteristics-process planning. Capacity
planning- factors affecting-Master production scheduling-material requirement
planning BOM and product structure.
Production control: objectives- production control systems- principle and
procedure of production Control.
Routing: objectives- procedure route sheets.
Module 3
Sequencing assumptions: solution of sequencing problems-processing n jobs
through two machines
Processing n jobs through three machines processing n jobs through m
machines processing two
Jobs through m machines-problems
Module 4
Materials management: Components of integrated material management
Purchasing management- stores management. Supply chain management ERP-
Role of I.T.
Module 5
Loading and scheduling: aim- reasons for scheduling- master scheduling or
aggregate scheduling
Estimating shop loads- short term scheduling mathematical loading and
scheduling- problems-
Scheduling through PERT / CPM problems.
Despatching- duties- procedure- rules.
Follow up and reporting- types-report preparation and presentation.
References
1. Modern Production Management - E.S.Buffa
2. Principles of Production Management - J.Apple
3. Production management principles - Mcycss
4. Production Planning and Control - K.C.jani& L.N.Aggarwal
5. Manufacturing Planning &Control - Volfman, Berry, Whybark systems
6. Production and operations management - R.Paneerselvam
7. Modeling the supply chain - Jeremy F Shapiro
MODULE 1
PPC Defined:
Any manufacturing activity requires resource input in terms of men, materials,
capital and machines. In any business that produces goods and services, production
activity must be related to market demands as indicated by the continuous stream of
customers orders. For maximum effectiveness, this must be done keeping the customer
satisfied and at the same time production activities are carried on in an economic
manner.
Introduction to Production, Planning and Control
2.1 PPC DEFINED
Any manufacturing activity requires resource input in terms of men, materials,
capital and machines. In any business that products a product or service, production
activity must be related to market demands as indicated by the continuous stream of
customer's orders. For maximum effectiveness, this must be done in such a way that
customer demands are satisfied, but at the same time production activities are carried on
in an economic manner. The process of developing this kind of relationship between
market demands and production capability is the function of production planning and
control or sometimes referred to as production control.
Production planning and control can be effected principally through the
management of work flow, inventories and backlogs and changing levels of operation.
The set of policies and procedures that are used to manage work flow, inventories
backlogs and changes in the level of production rate comprise, what is called a
production planning and control system.
SHORT HISTORY OF PRODUCTION PLANNING AND CONTROL
2.2 EARLY INDUSTRIAL MANAGEMENT
No one can say when man first studied production. Even in the ancient times,
attention was given to management methods, in the conduct of Government,
Organisation, for construction and other work where co-operative endeavour was
required.
In industry methods of organising, planning, supervising and controlling the flow
of production were developed at least as early as the days of Adam Smith writing in
1776, he described the process of making ordinary brass pins. He makes a distinction
between the production line worker, the person who designs the machine and handles
other engineering problems, and the manager who plan, organise, supervise, observe,
and control the operation. These distinctions are basic to much of modem management.
Beginning of Work Measurement. Studies in work measurement were made from
time to time in both the USA and UK. Some of these studies included the use of
stopwatch. An interesting study of this nature was made by Thomas Jefferson in 1769 as
he began to dig the foundation of new home near Charlottesville, Virginia. He estimated
the amount of dirt that one person could dig and haul away in a day of 12 hours.
Standards of this kind constituted the essential feature of the Taylor system of
management which was developed later.
Standardisation of Product. Another early development was the production of
parts according to specifications in such manner that the parts were interchangeable. Eli
Whitney is credited with having developed the principle of interchangeable parts in the
manufacture of muskets.
Development of Manufacturing Methods. In the beginning of about 1775 a
number of machines were developed for the manufacture of cloth, which was one of the
most important industries. The changes in methods of production soon extended to other
industries with the invention of the steam engine, the cotton gin, the steam boat, the
reaper and other machines. These inventions not only revolutionised methods of
production on farms and in factories that used the machine but also gave rise to new
industries for the manufacture of machines and machine parts used in their production.
With the introduction of new machines larger factories were built to employ
larger number of people. The work of production was further sub-divided into smaller
tasks to provide for greater specialisation among the workers. Attention was directed to
such problems as plant location, plant layout, methods of moving materials and the
design of factory buildings, machines were gradually improved and new machines were
invented from time to time.
Development of Management Methods. During the first half of the ninete~nt.\1
century attention began to be directed towards such management problems as personnel
relations, hours of work, fatigue and market relationships.
Scientific Management: Scientific management is the name given to a new
movement which began in a small way in the later part of the nineteenth century and
received national prominence in the first two decades of the present century. The new
system was characterised by a spirit of inquiry, the questioning of all conventional
management, methods and technique and an attempt to promulgate basic management
principles. Probably the best known of these persons associated with the new movement
were F.W. Taylor, H.L. Gantt, Frank B.L.M. Gilbreth.
Taylor's work was in tune with the vaunted reputation of contemporary scientific
investigations and, therefore, he lodged his concepts under the title of scientific
management. His theories received both acclaim and abuse. Critics forecasted that his
mechanistic views enforced by efficiency experts would completely de-humanise
industry but others saw them as logic applied to a promising new area. Whether people
agreed with him or not, his beliefs and the fervor with which he expounded them,
strongly stimulated industrial management.
An associate of Taylor, Henry L. Gantt, developed methods of sequencing
production activities which are still in use today.
Operations-oriented thinking took new substance from the literal as well as
figurative marriage of engineering and psychology in the husband -wife team of Frank
and Lillon Gilbreth, the mechanistic attitudes of engineer Frank were mitigated by the
humanistic attitudes of psychologist Lillain. Together they showed that basic human
motion patterns are common to many different work situations. Their analysis of
micromotions to improve manual operations initiated time and motion studies and the
use of motion pictures in work design.
In the 1920's and 1930's things become more complicated as it was realised that
people did not always behave as intuitively expected and that the complicities of
emerging production processes required more controls. As demonstrated by the famous
Hawthrone studies, the carrot of better wages or working conditions did not always lead
to proportional increase in output, psychological factors such as morale and attention
were influential.
An interdisciplinary approach to system studies appeared in the war years of
1940's first in the form of British operational research teams.
The 1940's also saw the birth of the electronic computer. Today its influence is
apparent throughout industry. Equivalently, The capabilities of computers must be
utilised if we expect to relate and evaluate the many variables in complex production
systems.
2.3 NEEDFOR PPC
India's developing economy needs PPC : The importance of PPC cannot be over
emphasised, particularly under the present circumstances of India. We are undergoing an
era of planning. The . main intension behind industrial planning is to accelerate the
productivity so that our goods may find a suitable market abroad. But the need for
greater, better and cheaper goods is out of question without proper planning and
adequate control. A successful production control programme minimises the idleness of
the men and machines optimizes the number of setups required, keeps in process
inventories at a satisfactory level, reduces material handling and storage costs and conse-
quently permits quantity and quality at low unit costs.
PPC is factory's nervous system. The functions of PPC in a factory can easily be
compared with the nervous system in human organism. It serves to co-ordinate the
activities of a plant just as the nervous system regulates muscular movements. When
simple repetitive operations are performed, production control or accomplished more is
less subconsciously in the same manner that the nervous system automatically regulates
one's breathing. When less repetitive activity is involved, more conscious direction is
necessary; both in the plant and in the human system.
Customer demands are likely to differ in quantities and delivery schedules and
this will lead to large fluctuations in the production levels. So to meet any demand, it is
desirable to have planning for production in future time periods for inventories of
finished goods and meet part of market demands from such finished goods inventories.
Furthermore, the lead times involved in procurement of manufacturing imputs warrant
planning for production in advance. This is particularly so, in the Indian context, with
specific reference to industrial raw materials. Also, requirements of skilled manpower
necessitate such planning where time factor involved in training personnel is rather
large. Also the socio-political structure in India makes it quite difficult for an
organisation to have varying manpower levels. This, again, necessitates production
planning in order to smooth out the needs for manpower.
Another reason why PPC is necessary, is the need to meet changes in demands
due to trend, cyclical and reasonal factors. Long-run changes in demand are taken care
of by change in overall capacity by expansion and or new facilities. However, in short
run, these will have to be taken care of by such factors as sub-contracting, using
overtime and building up inventories. Needless to say, in planning production for these
purposes, one should take into consideration the changes in production levels over future
periods in order to economise the cost of production. This is an important factor which
necessitates planning for production and exercising control.
Moreover, production operations are subject to variety of uncertainties ~uch as
emergency order, breakdown, material shortages and various other contingencies. PPC
provides a way to take these factors into considerations.
2.4 EFFECTS PF PPC
The effects of PPC can be grouped in two captions:
(a) Material factors.
(b) Human factors.
(a) Material factors. Under this following categories are included:
(i) Quality of the output. An improvement in volume of output within quality and
safety limits laid down by management is most common objective of PPC.
(ii) Plant utilisation. With ever increasing capital investment per producer in industry,
making fuller use of plant is of growing importance. Experience and research has
shown that in many types of plant the capital saving due to improved load factors
are proving the most substantial of all. These improvements are also being
achieved through better labour effectiveness.
(iit) Use of services. Again economic in the use of steam, water, air and electricity may
be paramount factors.
(iv) Quality of product. It may be sometimes desirable for economic or other reasons, to
improve the quality of product new or more consistent standard.
(v) Process efficiency. An operator can have a far more significant effect on process
efficiency than was previously envisaged.
(vi) Standard of safety. In dealing with many products quite apart from the normal
good standards a particularly high level of safety may be important, which is being
achieved by it.
(vii) Works cleanliness. It is another objective of management.
(b) Human factors. Under this heading following may be included:
(i) Effectiveness of work. The work should be such that it meets the ego and emotion
of the worker and he feels the pride over it. In other words, the objective of
management is to choose right man for right job at right place at right time on right
wages and salaries.
(ii) Interest in work. The worker should take interest in work and he will put the heart
and hand in performing the task is another prime aim of good management. .
(iii) Waiting time. The waiting time should remain minimum for the want of material
tools, equipment, supervision, inspection, delivery, etc. It can only be achieved
when the worker on the work will help fully and take interest in it.
(iv) Need for supervision. To make the worker expert and self-dependent in normal
day to day work is the other aim of the management. The supervisory time should
be reduced. The supervisors should be left to perform the task of planning,
coordination, motivation, control and feedback informations only.
(v) Ideas for new methods. Workers, working on the machine are said to be the best
man for new idea and suggestions, as he knows the various aspect of work fully.
To give encouragement to the worker for new ideas and new method the PPC is
brought in picture.
(vi) Team spirit. To develop the team spirit and feeling of brotherhoodness among
workers is another aim. The workers should do the work as a team, and should do
the work as a team, and should recognise their value and status in company as a
group not individuals.
(vii) Absenteeism. To minimise and regulate the absenteeism, PPC may be introduced.
(viii) Labour turnover. It helps the turnover to its minimum.
2.5 ADVANTAGES OF PRQDUCTION PLANNING CONTROL
The advantages of PPC can be viewed from company point of view, share
holders point of view, employees' point of view and society point of view. A brief
outline of advantage is listed below from all the angles.
From Companys point of view. The main advantages is cost of product per piece
reduces, and the company enjoys better and more earnings. The administration and
management task go ahead smoothly and efficiently. How this is achieved is briefly
outlined under following captions :
1. Production Management aspect. This is one of the most essential field which
helps in reducing cost per unit of production. This caption is further sub-divided as
follows:
(i) Production control.
(a) It facilitates in receipts, shipment and delivery.
(b) It paces production.
(c) It reduces conflict among workers.
(d) It helps in production time predictable.
(e) It helps in scheduling and dispatching automatically.
(f) If helps in setting up production centres.
(g) It reduces the number of parts and their cost and helps in mismatched part.
(h) Reduces the numbers of stock chasers.
(i) Reduces the production control expenses.
(ii) Quality Control and Waste Reduction. PPC helps in :
(a) Maintaining the rigid quality control.
(b) Minimising the wastes, scrap and rework.
(c) Minimising the rectification hours.
(d) Cost of inspection is reduced.
(e) Reduction of variations in manufactured goods.
(iii) Advantages in the manufacturing Costs. These can be briefed as follows:
(a) Decreased maintenance cost.
(b) Decreased tool replacement.
(c) Effects a saving in power load.
(d) Decrease in spoilage and scrap.
(e) Reduced raw material wastage.
(f) Better cost control.
(g) Reduced handling helps in saving time and quality.
(iv) Advantages to Labour Cost. These are as follows:
(a) Increased output per man hour.
(b) It helps in reducing set up time.
(c) Reduced number of operation.
(d) Reduced number of handling.
(e) Reduced length of handling.
(f) Reduced labour waiting time.
(v) Advantage to Management and Organisation.
(a) It helps in adopting better, efficient and effective planning.
(b) Better feed back and effective control system can be installed in different spheres of
activities.
(c) It helps on coordination and synchronising, the employee's efforts towards the same
goal as of the management.
(d) Reduced conflicts with trade unions and hence reduced and eliminated strikes and
lock-out.
(e) Reduced absenteeism, tum over and accidents.
(f) The management can efficiently and effectively install and develop the new
techniques of production and automation, if any
(g) Improved and better human relations.
(h) Higher morale among workers which leads to better cooperation, helping attitude and
up attitude of team spirit.
(i) The management can mould, efficiently, effectively to meet new environments and
circumstances.
(j) Degree of flexibility, reliability and accessibility in functions of management viz.
planning, coordination, staffing, organisation, motivation, direction and control
enlarges.
(k) It helps in easing of the burden of the supervisor.
(l) Reduced cost of supervision.
(m) Coordial relation between supervisor and subordinates.
(vi) Advantages to Capital Investment.
(a) It helps in management of fixed or block capital, working capital earning, and
dividends.
The capital can be raised very easily and quickly.
The finance functions can be carried out effectively and efficiently.
(b) It helps in reduced investment in machines and equipment by :
(i) Increasing production per machine.
(ii) Utilising idle hours of machine.
(iii) Reduced inventory of waste, in progress and of finished products.
(iv) Standardisation and simplification.
(v) Advantages to Marketing Management. This includes:
(a) Better and fine image of the company and thus creating higher watering capital such
as
goodwill, repute and fame by:
(i) Maintaining excellent quality of product.
(ii) Quality of all products but cheaper in competition.
(iii) Satisfaction of the consumer in psychological field and actual operational field.
(b) It helps in introducing now product in market.
(c) Company can stand in competition as cost of production per unit of production is
less.
(d) Marketing staff can be procured at lower initial investment, moreover this staff will
be of
better quality, and of higher excellence in all fields.
(e) Risk carrying cost decreases.
(f) Cost of advertising reduces.
(g) Market research cost declines.
From Worker's point of view.
Under this caption, we include the following:
(a) Reduced efforts of the worker.
(b) Reduced number of handling.
(c) Reduced fatigue and boredom.
(d) Acquires process of specialization.
(e) It permits working at maximum efficiency.
(f) Higher morale and team spirit.
(g) Job satisfaction and job pride.
(h) Reduced number of accidents.
(i) High earnings which helps him :
1. To raise standard of living.
2. To satisfy all his physiological demands more effectively and efficiently.
3. Can maintain his family up-to-date, e.g. better education of children,
better housing, better food and clothes etc.
From Shareholder's point of view
(a) Higher dividends; regularly and certainly in the future.
(b) Psychological satisfaction.
(c) Reduced speculation in the shares.
From Consumer's point of view
(a) Reduced cost per piece.
(b) Better and excellent quality.
(c) Psychological satisfaction.
From Society point of view
(a) Quicker and faster capital formation which leads to higher national income and
income per capita, which decides the standard of living of the country's people.
(b) It helps in unemployment problems.
(c) Better and efficient application of welfare economics as government raises more
revenue from the company on account of their higher earnings.
(d) National repute and self-dependence and self-reliance spirit is boost up
(e) The nation progresses towards prosperity.
(f) Stability and security of the nation is achieved.
2.6 FUNCTIONS OF PRODUCTION PLANNING AND CONTROL
The highest efficiency in production is obtained by manufacturing the required
quantity of product, of the required quality, at the required time by the best and cheapest
method. To attend this objective management employs production planning and control,
the tool that co-ordinates all manufacturing activities.
The main functions of PPC can be classified in ten categories:
(i) Materials:
Raw materials, as well as standard finished parts and semi-finished-products
must be available when required to ensure that each production of operation will start on
time. Duties include the specification of materials (both with respect to dimensions and
quality) quantities and availability; delivery dates, standardization and reduction of
variety, procurement and inspection. This function also covers the procurement of semi-
finished products from subcontractors.
(ii) Methods.
(a) The purpose of this function is to analyse possible methods of manufacture
and to try to define the best method compatible with a given set of circumstances and
facilities. This analysis covers both the general study and selection of production
processes (for the manufacture of components or assemblies) and the detailed
development and specifications of methods of application.
(b) such a study results in determining the sequence of operations and the
division of the product in to assemblies and sub-assemblies, modified by the limitations
of existing layout and work flow.
(iii) Machines and equipments :
Methods of manufacture have to be related to available production, facilities,
coupled a detailed study of equipment replacement policy. Maintenance policy,
procedure and schedules are also functions connected with managerial responsibility for
equipment, since the whole problem of break. downs and reserves can be seriously
reflected in halts in production tool management, as well as problems both design and
economy of jigs and fixtures, constitutes some of the major duties of production
planning and control.
(iv) Routing:
Once the overall methods and sequence of operations have been laid down, each
stage in production is broken down to define each operation in detail; after which the
issue of production orders can be planned. Routing prescribes the flow of work in the
plant and is related to considerations of layout of temporary storage locations for raw
materials and components and of material handling systems. Routing is fundamental
production function on which all subsequent planning is based.
(v) Estimating:
When production orders and detailed operation sheets available with specifica-
tions feeds, speeds, and use of auxiliary attachments and methods, the operation times
can be worked out. This function involves the extensive use of operation analysis in
conjunction with methods and routing as well as work measurement in order to set up
performance standards. The human element figures prominently in work measurement
because it is sensitive to systems of work rating and wage incentive schemes. Hence it
may consequently result in a wide scatter of operation times and in unduly large
fluctuations and perhaps instabilities in time schedules.
(vi) Loading and Scheduling:
Machines have to be loaded according to their capability performing the given
task and according to their capacity. Machine loading is carried out in conjunction with
routing to ensure smooth work flow; and with estimating, to ensure that the prescribed
methods feeds and speeds are best utilised. Scheduling is perhaps the toughest job
facing' a production manager because it determines the utilisation of equipment and
manpower and hence the efficiency of the plant. Scheduling must ensure that operations
are properly dovetailed that semi-finished components arrive at their next station in time,
that assembly work is not delayed; and that on the other hand the plan is not
unnecessarily loaded with physically and financially with work in process, i.e. with
semi-finished components waiting for their next operation. This calls for a careful
analysis of process capacities, so that flow rates along the various production lines can
be suitably co-ordinated. In machine loading, appropriate, allowances for set up of
machines, process adjustments, and maintenance down-time have be made, and these
allowances form a vital part of the data constantly used by the scheduling function.
(vii) Dispatching:
This function is concerned with the executive of the planning function.
Dispatching is 'the routine of setting productive activities in motion, through release of
orders and instruction and in accordance with previously planned times and sequences as
embodied in route sheets and loading schedules'. Despatching authorizes the start of the
production operations by releasing materials, components, tools, fixtures and instruction
sheets to the operator, and ensures that material movement is carried out according to the
planned routing sheets and schedules.
(viii) Expediting:
This control tool is t:1)~ executive arm that keeps a close watch on the progress
of the work expediting or 'follow up' or 'progress' as it is some times called, is logical
step after despatching. Despatching maintains them and sees them through to their
successful completion. This function has to keep close liaison with scheduling, in order
to provide efficient feed-back and prompt review of targets and schedules.
(ix) Inspection:
Another major control function is that of inspection. Although the control of
quality is often detached from the production planning and control department, its
findings and criticisms are of supreme importance both in the execution of current plans
and in the planning stage of future undertakings. When the limitations of processes,
methods and manpower are kn0wn, then these limitations can form a base for future
investigations in evaluating, with the view to improving production methods, or
indicating the cost implications of quality at the design stage.
(x) Evaluating:
Perhaps the most neglected function, but on an essential link between control and
future planning, is that of evaluating. The executive tasks of despatching and expediting
are concerned with the immediate issues of production and with measures that will as
certain the fulfilment of set targets. Valuable information is gathered in this process, but
the feedback mechanism is rather limited in nature and unless provision is made so that
all this accumulated information can be properly digested and analysed, valuable data
may be irretrievably lost. Thus l1ere the evaluating function comes in, to provide a feed-
back mechanism on a longer term basis so that past experience can be evaluated with the
view to improving utilisation of methods and facilities. Many firms consider this
function important enough to divorce part of it from production, planning and control
land to establish it as a separate department in its own right, in which wider aspects of
production management can be studied, using modern tools of operations research.
Whatever the scope of evaluating in the production planning and control department,
this process is an integral part of the function.
The ten functions were listed above in the order of their operation. As shown in
Fig. 2.1, they are related to three stages, preplanning, planning and control. .
Preplanning:
This covers an analysis of data and outline of basic planning policy based on
sales, reports, market research and product development and design on the broad aspects
of planning, this stage is connected with problems of equipment policy and replacement,
new processes and materials, layout and work flow.
Preplanning production as a production planning and control responsibility is
also preoccupied with collection data on the '4M's, i.e. on materials, methods, machines
and manpower, mainly with respect to availability, scope and capacity.
Planning.
When the task has been specified a thorough analysis of the" 4 M's" is first under
taken to select the appropriate materials, methods and facilities by means of which; the
work can be accomplished, as already mentioned. This analysis is followed by outing,
estimating and scheduling. The more detailed, realistic and precise the planning, the
great conformity to schedules achieved during production and subsequently the greater
the efficiency of the plant. There are two aspects of planning, a short term one,
connected with immediate production programmes, and a long term phase, where plans
for the more distant future are considered and shaped~ Prominent planning functions are
these dealing with standardisation and simplification of products, materials and methods.
Control:
This stage is effected by means of despatching, inspection and expediting.
Control of inventories, control of scraps, analysis of work in process, and control of
transportation are essentially links of this stage. Finally, evaluation takes place to
complete the production planning and control cycle.
The control functions have a very important rate in providing the main sources of
feed-back. information to ensure necessary corrective actions. Effective communication
systems are prerequisites to efficient control and are, therefore, of great concern to
production planning and control.
The ten functions of production plan, and control were related in what might be
regarded as a chronological order in the production procedure. It is important to stress,
however, that there is a very strong connection and interdependence between, production
planning and control, and other industrial engineering functions, some of which are
briefly described below.
Plant lay-out. Layout not only affects the allocation of machines to perform
given task but it may also becomes an important factor at the design stage in selection of
production processes. A rigid layout may hamper the integration of additional equipment
in a specific production centre either through lack of space of limited mobility of the
equipment. This may lead to long lines of transportation which increases the total
production costs and the amount of work in process. On the other hand, sequences of
operations changes in plant layout must often be undertaken in the light of production
planning and control requirements, in order to achieve a satisfactory work flow. Thus,
the production planning and control is affected by the restrictions imp<;>se~ on the
system by the layout, and at the same time it may greatly contribute through evaluation
to modifications in layouts.
Specification and Standardisation: Production of different components, models
or products lead to a demand for different types of materials and methods of fabrication.
At the various stages of manufacture, variety may, therefore, occur in materials, bought
out parts, manufacture components, minor and major assemblies for finished products as
well as in processes methods of manufacture, tools, jigs and fixtures, machines, etc.
Simplification and standardisation are functions which aim at finding a limited variety of
different types so that the basic requirements are satisfied and the efficiency of the plant
is increased. Most aspects of simplification and standardisation are the joint
responsibility of several department, e.g. the question of limiting the variety of finished
products would involve the sales department, production department and the design
office, while questions relating to simplification of materials would also include
inventory control considerations and perhaps involve the research and development
department. Some aspects of simplification and standardisation are major responsibilities
of the production planning and control department, such as problems relating to
machines and methods.
Time and Motion study: This field is closely allied to efficient utilisation of
manpower and scheduling problems. Time and motion study consists of two fields of
activity, operation analysis and work measurement.
(a) Operation analysis or method study. Which as the name suggests, consists of a
evaluation, selection and development of an efficient method to perform a given
task. Operation analysis is concerned both with problems of limited scope (such as
operator's work place layout, an activity study of a gang of operators or correlation
of machine, operator activities) and overall studies of the process, in which all
aspects of routing, plant, layout and scheduling may play an important role.
(b) Work measurement. Which is concerned with stabilising standard times for the
vari9us operations in the process for the estimating function in production planning.
As already mentioned no scheduling can ever be attempted before some data on
performance times becomes available.
From the foregoing remarks it should be appreciated that time and motion study
is employed both at the planning and control stages. Development of methods and
information regarding the measurement of processing times can be obtained in two
ways.
(a) By synthesis based on past experience of similar circumstances, where the same
processes are employed. Synthesis is an important tool at the planning stage.
(b) By analysis of an existing production method and measurement of operation times
when the process is already in action. This obviously belongs to the control stage,
and information gathered . in this way provides a basis for replanning and
readjusting of production schedules, when these are proved to be unrealistic and for
data required for future synthesis.
Although these two distinct functions of time and motion study are employed at
different stages of production planning and control and for different processes; they
share the same philosophy, the same approach, the same techniques, and even if they can
be divorced in time they are essentially integral parts of the same field.
The importance of materials availability at the various stages of production
necessitates a mechanism of inventory control and stores organisation. Inventories are a
financial burden on the plant and management of stores may be very costly. Inventory
control is sometimes a very complex function as its policies are not dictated by internal
needs and considerations along out by external" factors governing the purchasing of
materials, such as vendor's offers and terms, market availability. Factor may influence
both quantity and delivery dates of materials and components and have to be taken into
account by any inventory control mechanism.
2.7 PROBLEMS OF PRODUCTION PLANNING AND CONTROL
Production planning operational and control problems require two major typ~s of
decisions one that relates to the design of the system and the other that relates to the
operation and control of the system (that is both long run and short run decisions) the
relative balance of the emphasis on such factors as cost, services, ~~liability of both
functional and time performance depends on the basic purposes of the enterprise or
institution and on the general nature of goods or service being produced. In general
economic enterprises will probably emphasize cost, consistent with quality and delivery
commitments.
A classification of problems is as follows:
(A) Long rim decision related to the design of production and operation's system:
(a) Selection of equipment and process.
(b) Production design of items processed.
(c) Job design.
(d) Location of the system.
(e) Facility layout.
(B) Decisions related to the design of operation and control systems:
(a) Inventory and production control.
(b) Maintenance and reliability of the system. (c) Quality control.
(d) Labour control.
(e) Cost control and improvement.
The relative importance of these problems in operation's management varies
considerably depending on the nature of individual production system. Nevertheless,
every system has these problems in some degree. For example, replacement policy may
occupy a dominant position in production systems where the capital investment per
worker is very large in the steel industry, on the other hand, replacement policy may
occupy a minor role in a production system that is represented by a large labour
component or a large material cost component. Part of the area of ~e operation
management involves the sensing of the relative importance of these various
components in a given situation.
2.8 THE NEED OF PPC FROM A SYSTEM POINT OF VIEW
Many of the problems of production interact with each other. For example, job
design may interact with the material handling system used, the design of the things
being processed, the equipment or process being used, and the overall facility layout. An
optimal inventory policy to . follow is partially dependent on the means by which
production levels are controlled. The best process (in instances where alternatives exist)
may depend on whether idle labour or equipment is available. If we were to study
inventory problems in isolation, ignoring the effects of changes in production level, we
would develop a sub-optimal solution to the problem, because the solution
Forecasting
Sale forecasting
A sale forecast is defined as an estimate of the amount of sales for a specified
future period under a proposed marketing plan or programme.
Forecasting plays a crutial role in the development of plans for the future. It is
essential for the organisation to know for what level of activities one is planning before
investments in inputs ie, men, machines & materials are made. In modern production
activity, the activities are more complex technologically and the basic inputs are
becoming expensive and therefore these are lot of restrictions. Thus planning is very
essential for any production activity and is a fundamental activity of management.
Forecasting forms the basis of planning and enables the organisation to respond more
quickly and accurately to market changes.
Prediction Forecasting
(1) is an estimate of future event through
subjective considerations other than just
the past data.
(1) is an estimate of future based on
historical data
(2) good subjective estimation is based
on managers skill experience and
judgment
(2) requires statistical and management
science techniques.
(3) Influence of ones own perception
and bias. So it is less accurate & low
reliability
(3) achieved by systematically combining
and casting foreward in a pre determined
way data about the past.
Need for Demand Forecasting:-
1. Majority of activities of the industries depend upon future sales.
2 To assist decision making w.r.t the investment.
3. To schedule production activity to optimise the utilisation of plants capacity.
4. To prepare material planning to make materials available at right quantity and right
time.
5. gives a future trend which is essential for product design and development.
Thus in the changing and uncertain techno-economic and marketing scenario,
forecasting helps to predict the future with accuracy.
Long Term Forecasting
Forecasts which cover the period over one year (5 year or 10 years) future are
termed as long term forecasts. (In some text the period more than 5 years.) Eg:-Capacity
planning and investment planning.
Short Term Forecasting
Forecasts which cover the periods less than one year is termed as short term
forecasting (In some text b/w 1-5year) Eg:-purpose of materials control, scheduling,
loading.
Methods of sales forecasting
Sales Forecasting Methods

Forecasting for new Products
Forecasting for
established products
1. Direct survey method 1. Projection method
2. Indirect survey method 2. Related information method
3. Comparing with established 3. Market research
4. Limited market trial 5. Sales force composite method
Direct survey method
Prospective customers are approached and are asked what they intend to buy.
Sampling technique is adopted for survey purposes. From this sample survey with some
degree of certainity, it is possible to predict, how the population will respond.
Indirect survey method
The attitude and behaviour of the consumers is predicated through salesman,
intermediate selling agent, wholesalers, retailers etc.
Comparing with Established Products
Product is compared with an existing product, so sales figures can be compared.. If
the new product is a substitute for a competitors product its acceptance loyality to the
present product.
Limited Market Trial
To predict the acceptance of the product by potential customers, some ties, limited
selling technique is also adopted.
Established products
Projection Method
Based on historical data, future can be predicted to some extent. A line drawn
though the known information is projects into a forecast area to predict. Projection of
future can be done either by time series analysis or correlation, regression analysis
technique
Projection methods

Time series analysis correlation analysis
1. Graphic methods
a) Simple graphs
long term short term b) Scatter diagrams
2. Mathematica methods
1. Method of inspection a) Pearsonian method
2. Method of average Regular variation Irregular variation
a) Selected point trend b) Concurrent deviation method
b) Semi average trend c) Ranking method
c) Moving average trend d) Regression equation or least
3.Method of least squares squares method
a) Arithmetic straight line trend e) Difference method
b) Logarithmic straight line trend
c) Parabolic trend
Related information Method
In this, a prediction various directly with the sales volume is formed
Examples:- Actual birth rate might be used to predict the sales of baby foods.
Market Research
Through critical analysis of marketing forces, changing patterns of socio-economic
pressures, political changes etc, we can predict the future demands of the products.
Jury of Executive Opinion Method
Opinions of experts are invited about the future sales. It is simple and fast. No
scientific.
Sales force composite method
Views of salesmen, traders, middlemen are grouped and estimates are made
accordingly. Not scientific.
Time Series Analysis for Sales Forecasting
Long Term Forecasting
(1) Method of Inspection
Describes a sales trend by drawing free hand curve keeping as far as possible the
troughs and peaks of the original graph at equal distance. The method is easy and simple
and may be superior to other methods when performed by a person who possesses
mature judgment and thorough knowledge of firms operations and of general business
conditions. This may be used for preliminary analysis.
Limitations
(1) Different persons may draw different trend lines from same data
(2) Affected by personal prejudice or bias of the person
(3) Being a subjective method it requires the exercise of a high level of judgment and
statistics.
P1 Straw products Ltd, is a pvt. company with a paid up capital of Rs.41,400 lakhs. It
is engaged in the production f straw boards, paper boards, writing papers etc. The
balance sheet reveals the following sales pattern during 1995 to 1999. It is desired
by the chairman to flash the sales forecast for the year 2000.
Year Sales (in lakhs)
1995 890.50
1996 941.87
1997 1260.60
1998 2354.19
1999 2355.84
(2) Method of averages
(a) Selected point method
The common practice is to select the values of the years which are considered to
be most representative or normal. Then straight line is drawn. This is not correct
method of approximation as selection of point is open to objection and difference
of opinion.
(b) Semi average method
Is sometimes employed when a line appears to be an inadequate explanation of the
trend. In this method the original data is divided into two equal parts and the
values of each part are then summed up and averaged. The average of each part is
centred in the period of the time of the part from which it has been calculated and
then plotted on the graph. A straight line then be drawn to pass through the plotted
points. This line is the semi average trend line. When the number of years are
added, the middle year is not considered while dividing the data into two equal
parts and obtaining an average.
Advantages: (1) The method is simple
(2) No possibility of personal prejudice and bias
Limitations: (1) It assumes a straight line relationship b/w the plotted points.
(2) It is associated with the defects of arithmetic averages.
P2. The sales turnover of fertilizer corporation of India ltd. for the period 1991-92 to
97-98 is given below, compute the estimated sales for the year 1998-99. Also plot
the actual sales values on the graph to have a comparison.
Year Sales (in Rs. crores)
1991-92 39.2
1992-93 48.8
1993-94 65.8
1994-95 78.0
1995-96 95.0
1996-97 91.7
1997-98 112.5
(c) Moving Average Method
Is obtained by summing the data point over a desired number of past periods
(years, months, weeks). This number usually encompasses 3 years, 5 years or 8 years.
Advantages:
(1) The method is simpler compared with the method of least squares.
(2) It is a flexible method. If a few years are added the entire calculations are not
changed.
(3) Not affected by personal prejudice and bias.
(4) This gives a very good picture of the general long term movement in data, if the
data contains uniform cycles and if the trend is the data, if any is linear or
approximately.
Disadvantages:
(1) Cannot be applied if same observations are missing
(2) It does not result in a mathematical equation which may be used for forecasting.
(3) The selection of the period of moving average requires a great deal of care for, if a
wrong period is selected a corrected picture of a trend cannot be obtained.
3. The sales pattern of N. Abdulah & Sons, a firm manufacturing different types of
castings used in industrial motors, traction motors etc is as follows compute the 3
yearly moving trend and find out the sales forecast for 2001.
Year Sales (in lakhs)
1994 6.00
1995 7.00
1996 8.00
1997 7.50
1998 6.50
1999 7.00
2000 9.00
Year Sales (in lakhs) 3 yearly moving total 3 yearly moving avg
1994 6.00
1995 7.00 21.00 7.00
1996 8.00 22.50 7.50
1997 7.50 22.00 7.33
1998 6.50 21.00 7.00
1999 7.00 22.50 7.50
2000 9.00
4. The balance sheets of R.N. brothers dealer in M.S. scrap revealed the following
sales pattern. Compute the 4 yearly moving average trend to the firm.
Year Sales (in lakhs) Year Sales (in lakhs)
1984 200 1991 220
1985 190 1992 208
1986 210 1993 224
1987 180 1994 200
1988 188 1995 240
1989 204 1996 184
1993 216
Year Sales (in lakhs) Total of 4 years Total in pairs of 4 yr. Moving Avg.
1984 200
1985 190 780
1986 210 768 1548 193.50
1987 180 782 1550 193.75
1988 188 788 1570 196.25
1989 204 828 1616 202.00
1990 216 848 1676 209.50
1991 220 868 1716 214.50
1992 208 852 1720 215.00
1993 224 872 1724 215.50
1994 200 848 1720 215.00
1995 240
1996 184
(3) Method of Least Squares
The method of least squares is a mathematical device which places a line through
a series of plotted points is such a way that the sum of the squares of the deviations of
the actual points above and below the trend line is at the minimum. This method gives us
what is known as line of best fit. If we sum up the positive and negative deviation on
either side of the line of best fit the sum is zero.
Advantages:-
1) Free from bias and personal prejudice.
2) Trend values can be obtained for all the years
3) This method gives the most satisfactory results
Disadvantages:
It lacks flexibility of trend fitting. If one more year is added the entire calculations
have to be done again.
A straight line will be of the general form Y = bx + a
where y is the dependent variable, such as in rupees, sales in volume etc, a and b
are two unknown constants whose values are determined by solving two normal
equations and x is the unit of time.
To determine the values of a and b the following two normal equations have to be
solved.
y = Na + b x
xy = a x + b x
2
where N is the total number of observations
But where deviations are taken from the middle year, x will be equal to zero and
the values of a and b can be determined as under.
a = y/N; b = xy/ x
2
5. Exports of Indian Rare earth. Ltd., during 1993-94 to 1997-98 is given below. (a)
Compute the exports during 2002-03
(b) If the analysis of business conditions and pertinent economic factors indicate that
exports in 2002-03 will be about 15% below trend or normal, then what will be
export forecast in 2002-03.
Year Exports (in Rs. crores)
1993-94 1.49
1994-95 1.24
1995-96 1.69
1996-97 1.69
1997-98 3.11
(a)
Year
Exports in
Rs. crores
y
Deviation from
middle year
x
xy x
2
1993-94 1.49 2 2.98 4 1.106
199495 1.24 1 1.24 1 1.476
199596 1.69 0 0 0 1.846
199697 1.70 +1 1.70 1 2.216
199798 3.11 +2 6.22 4 2.586
N=5 y = 9.23 x=0 xy=3.7 x2=10
Since the deviations are taken from the middle year.
Equation of trend of export will be: y = a + bx
y = 1.846 + 0.370 x
Y 9394 = 1.846 + 0.370 (2) = 1.106
Y 9495 = 1.846 + 0.370 (1) = 1.476
Y 95 96= 1.846 + 0.370 (0) = 1.846
Y 9697 = 1.846 + 0.370 (1) = 2.216
Y 9798 = 1.846 + 0.370 (2) = 2.586
Y 200203=1.846 + 0.370 (7)= 4.436
(b) Forecasted sales = Trend cyclic variation
= 4.436(0.15 4.436) = 3.77 crores
Note (i) If the time series consists of odd number of years to make x=0, the
middle value of the time series is taken as the origin. (ii) If the time series consists of
even number of years, the midway period between two middle period is taken as the
origin to make x = 0.
6. The sales for the domestic water pumps manufactured by Ajit Mfg. company is
given. Forecast the demand for the pumps for the next three years using least
square method.
Year 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
Sales
(x10
3
)
30 33 37 39 42 46 48 50 55 58
(Trend: Y = 43.8 + 3.04x
for 1998 = 66,600
1997 = 63,560
1996 = 60,520
(4) Logarithmic straight line or Exponential method of sales trend:
Sometimes a smooth curve provides a better fit for the data than does a straight
line. A smooth curve implies a uniform percentage growth or decay instead of the
constant increment or decrement exemplified by a straight line. The equation for a
curve may take the exponential form y = ab
x
, which indicates that y changes at the
constant rate b, each period. We can convert the exponential equation to its
logarithmic form:
log y = log a + x log b
Two normal equations:
log y = N log a + x log b (1)
log y = x log a + x
2
log b (2)
Alpha smith & Co. a private firm has the following sales pattern during 1995 to
1999. Compute the sales forecast for 2000.
Year 1995 1996 1997 1998 1999
Sales 106 118 111 123 129
Year
Sales
(Rs.lakhs)
Deviation
from
middle
year
x
x
2
log y x log y
1995 106 2 4 2.0253 4.0506
1996 118 1 1 2.0719 2.0719
1997 111 0 0 2.0453 0
1998 123 +1 1 2.0899 2.0899
1999 129 +2 4 2.1105 4.2210
N=5 x= 0 x
2
=10
log y =
10.3429
xlogy =
0.1884
log y = N log a + x log b 10.3429 = 51ga + 0
xlog y = log a + x
2
log b 0.1884 = 0 + 10 log b
a = 117.106 &
b = 1.044
Forecasting equation is log y = 2,0686 + 0.0187 x
Forecast for 2000 is 133.26 lakhs
5. Parabolic Trend Sometimes a straight line fails to fit in the data. A second degree
curve describes them. The equation of such a curve is
Y = a + bx + cx
2
The normal equations of this second degree parabola are:-
Y = Na + b x + c x
2
(1)
xy = a x+b x
2
+ c x
3
(2)
x
2
y = a x
2
+ b x
3
+ c x
4
(3)
8. R. Bham & Co. is engaged is the manufacturing of compressor, pumps etc given
below are the sales of the company during 1993 to 1999. Compute the expected
sales during 2000.
Year 1993 1944 1995 1996 1997 1998 1999
Sales
(Rs.lakhs)
6 10 15 39 25 20 15
Year Sales
(Rs.)
Deviation Long term
trend of
(y) (x) xy x
2
x
3
x
4
x
2
y sales
1993 6 3 18 9 27 81 54
1994 10 2 20 4 16 40
1995 15 1 1 15
1996 39 0 0 0 0 0 0
1997 25 1 25 1 1 1 25
1998 20 2 40 4 8 16 80
1999 15 3 45 9 27 81 135
y =
130
x=0
xy=
57
x
2
=
28
x
3
=0
x
4
=19
6
x
2
y=34
9
Normal equations : 130 = 7a + b.o + 28c (1)
57 = a.0 + 28b + c.o (2)
349= 28a + b.o + 196 c (3)
Solving, b = 2.0357
a = 26.714 and c = 2.0357
Equating the parabola, y = 26.714 + 2.0357x 2.0357x
2
Forecast for 2000 y = 26.714 + 2.0357 (4) 2.0357 (4)
2
= 2.286lakhs
Experimental smoothing:
Suppose that a new observation has just been made, and that we already have an
old forecast, based on any method we like. There will almost certainly be a difference
between the forecast and the actual observation. Therefore let us construct one forecast
of the next observation from are old one by allowing for the error we have just made.
This method can then be written as:
Newfprecast = old forecast + (Later obsrv.-old for cast) where =
smoothing constant and is a fraction between 0 and 1. It has been found appropriate to
have between 0.1 and 0.5 in many systems.
Correlation Analysis
Is an additional technique which may be employed to sales forecast. Since all
forecast methods are subject to error, a firm is wise to employ more than one method. A
forecast based on time series analysis trends to be substantiated if a similar forecast is
obtained by correlation analysis.
A statistical tool used for expressing the relationships between two or more
variables in one single figure is known as correlation. Correlation is simply an averaging
process by which an average relationship between two or more variatles is established.
Types of Correlation
Analysis of the relationship between two sets of data is referred as simple
correlation. Multiple correlation analysis is designed to measure the influence of several
series of data upon a particular series such as sales. For example, sales of point might be
forecast for specific states or regions by analysis of (1) number of residential structures
with paintable surfaces (2) number of owner occupied residences. (3) median value of
owner occupied residences. Partial correlation analysis is a technique by which the
influence of one series upon another is measured while other held constant.
Pattern of Correlation: If the amount of change in one series tends to bear a
constant ratio to the amount of change in the other series then the correlation is said to
be linear. The relationship is manlinear or curvilinear if the amount of change in one
series does not remain in constant ratio to the amount of change in other series.
Degree of Correlation: When changes in two related variables are exactly
proportional, correlation is perfect. If they are not proportional the degree of correlation
is limited. Thus we may have four degrees of relationships.
(a) Perfect positive - Equal proportional change in same direction
(b) Perfect negative - Equal proportional change in opposite direction
(c) Limited positive - Unequal change in same direction
(d) Limited negative - Unequal change in opposite direction
Measurement of correlation:
Correlation can be known by:
(i) Graphical methods (a) Simple graph (b) Scatter diagrams or scatter grams
(ii) Mathematical methods (a) Pearsonian method (b) Concurrent or concomitant
deviation method (c) Ranking method (d) Regression equation or least squares
method (e) Difference method.
(i) a) Simple graph
The two series may be plotted on a graph paper and their direction and loseness
observed. This is a visual method of finding out correlation. If the series are running
parallel, this is an evidence of position correlation, if they are running in opposite
direction, inverse correlation exists between them. Graphical correlation methods cannot
indicate the exact degree of correlation.
b) Scatter diagrams
Is the simplest method of studying relationship between two series of data.
Under this method, x variable is measured on the horizontal axis and y variable on the
vertical axis and for each pair of x and y, points are plotted. If the points so plotted show
some trend either upward or downward, the two variables are correlated. On the other
hand if the plotted points do not show any trend, there is no correlation between the
variables.
The greatest limitation of the method is that it fails to give any idea about the
degree of corelation.
(ii) (a) Pearsonian method
To render comparison possible a coefficient of correlation is calculated. Karl
pearson devised a coefficient of correlation ( ) which varies within t 1. 1 represents
perfect correlation. Zero indicates absence of any correlation or independence of
variables. Positive correlation is given by + sign and negative correlation by sign.
Karl pearsons coefficient of correlation is given by the formula:
(d) Regression Analysis
After having established the fact of correlation between two variables, it will be
ones curiosity to know the extent to which one variable varies in response to a given
variation in other variable. Thus the primary use of the regression equation is to
describe the nature of the relationship between the two variable and to show the rates of
change in one factor in terms of another.
If we are given x and y values we can fit a regression equation of the type y = a 9
bx regression equation of y on x. Here y is the dependent variable, a and b are two
unknown constants and x is the independent variable. In order to find out the values of a
and b we have to solve two normal equations.
y = Na + b x (1)
XY = Na x + b x
2
(2)
Month
Nail driver
sales (10
4
)
Constructive
volume 10
8
x
2
y
2
xy
11 10.00 2.50 100.00 6.25 25.00
12 11.00 3.00 121.00 9.00 33.00
13 9.00 2.50 81.00 6.25 22.50
14 9.00 2.00 81.00 4.00 18.00
15 12.50 3.50 156.25 12.25 43.75
16 11.50 3.00 132.25 9.00 34.50
17 11.50 3.00 132.25 9.00 34.50
18 10.50 3.00 110.25 9.00 32.50
19 11.00 3.00 121.00 9.00 33.00
20 9.00 2.00 81.00 4.00 44.00
y=207 x=54.50
y
2
=2169.5
0
x
2
=152.75
xy=598.7
5
To find the most likely sales estimate when construction volume is Rs.300000000, we
can have two normal equations.
y = Na + b x
xy = a x + b x2
Substituting the values,
207 10
4
= 20a + 54.5 10
8
b
598.75 10
12
= 54.510
8
a + 152.7510
8
b
207 104 54.5 108 = 20 54.5 108a + 54.5 108 54.5 108 b
598.75 1012 20 = 20 54.5 108 a + 152.75108 20 b
Solving a = 109.86 103
b = 23.35 106
when y = 300000000, y = Rs. 102857.8
Another method of obtaining regression equation is as follows:
Regression equation of x and y will take the following form:
where = Arithmetic mean of x and y series
r = coefficient of correlation
x, y = standard deviation of x and y series.
The quantity is called regression coefficient of y on x.
9. Rama and sons is a pvt. organisation engaged in the manufacture of nail
drivers. The management of the firm think that the sales of nail drivers logically be
related to the amount spent on construction. If a relationship does not exist,
published government and construction industry forecasts of anticipated building
levels can be used as an additional sales predictor. First a check is made to confirm
that the building levels forecasts are relatively accurate. Next the national figures
are broken down to conform to the firms marketing areas. Then the records of
monthly building volume and nail driver sales for corresponding months are
collected and tabulated the construction volume is in Rs. 100 million units and
product sales in 10,000 units. Find out:
(a) Is it worthy to consider the correlation between sales of nails and
construction volume?
(b) Is projected construction volume for the next month is Rs. 300,000,000.
What would be sales volumes of the nails in rupees.
Month
Nail
driver
sales
10
4
Construc
tion
volume
10
8
y
2
x
2
xy
1 7.5 2.00 56.25 4.00 15.00
2 10.00 2.50 100.00 6.25 25.00
3 9.00 2.00 81.00 4.00 18.00
4 10.50 3.00 110.25 9.00 31.50
5 11.50 3.50 132.25 12.25 40.25
6 11.00 3.00 121.00 9.00 33.00
7 10.50 3.00 110.25 9.00 31.50
8 10.00 2.50 100.00 6.25 25.00
9 11.50 3.00 132.25 9.00 34.50
10 10.50 2.50 110.25 6.25 26.25
ie, y 67 = 1.12 (x65)
y = 1.12x 72.8 + 67
ie, y = 1.12x 5.8
If x = 70, y = 1.12 70 5.8
y = 72.6
Selection of a forecasting method
A single organisation may use several different forecasting methods to anticipate
the future of its various activities. The selection may depend on any or all the factors
listed below:
(1) Availability and accuracy of historical data
(2) Degree of accuracy expected from the production
(3) Cost of developing the forecast
(4) Length of the prediction period
(5) Time available to make the analysis
(6) Complexity of factors affecting future operation
Requirements of a good forecasting method
(1) The method should be easy to understand and should be simple to use.
(2) The method selected should give minimum forecast errors at optional cost.
(3) The cost to make the forecast should be small
(4) The method selected should be stable in the sense that the changes should
be minimum.
The Internal reports system, the marketing intelligence system, the marketing research
system and the analytical marketing system.
The internal reports system gives access to current data on sales, costs, inventories, cash
flows and accounts receivable and payable. Internal reports systems based on computers
may provide speedier and more comprehensive information.
The marketing intelligence system supplies marketing executives with every day
information about developments in the external marketing environment.
Marketing research involves collecting information that is relevant to a specific problem
facing the business.
The analytical marketing system consists of advanced statistical procedures and
models to develop more rigorous findings from information collected by the above three
systems.
The various steps involved in designing and developing MIS are:
(1) Identifying the broad information needs of the orgnisation
(2) Categorising the information needs as follows:
Information on Strategic planning level
Information at sales operational level
Information at sales operational level
(3) Evaluating the cost of collecting and processing the information.
(4) Comparing the costs Vs. the benefits.
(5) Deciding the frequency and timing of collection of information.
(6) Identifying the sources of information.
(7) Designing the mechanisms/Procedures for gathering, processing, storing
and retrieval of information.
(8) Analysing and interpreting the information and disseminating it to the
right person at the right time and in the right manner.
(9) Monitoring, maintaining, reviewing and improving the system.
Questions
(1) Define Marketing Research. Explain the present day importance of
marketing research.
(2) Describe in brief the classification of marketing research problems.
(3) Marketing research is vital for evolution of sound marketing strategy.
Critically examine this statement.
(4) Marketing research is the key tool used by the management in its
problem solving and decision-marking in the field of marketing. Justify.
(5) Briefly explain the steps in the marketing research process.
(6) Name and describe briefly the various sources of collecting marketing
research data.
(7) Describe the objectives/benefits of marketing research.
(8) What is market survey? What are the steps involved in carrying out
market survey?
(9) Name and describe the various market survey techniques.
(10) Describe briefly:
(i) Personal interview survey.
(ii) The mail survey
(iii) Questionnaire development.
11. Describe in brief
(i) Panel research
(ii) Market research agencies in India
12. What is sampling? (in connection with market survey). What are the
requirements of a good marketing sample?
13. State the importance, merits and demerits of sampling as a data collection
process in market survey.
14. Define Marketing Information System (MIS). Describe its components in
brief.
15. State the various steps involved in designing and developing MIS.
Sales Forecasting
34.1. INTRODUCTION
Business action taken today must be based on yesterdays plan and tomorrows
expectation. The plans for future cannot be made without forecasting events and their
relationships. Every firm is keen to know the expected demand for its products, how
much of a given product it could sell in a given time, whether the sales would increase or
decrease from the current levels and by how much and what would be the share of the
market it can secure during the specified period. This knowledge is required by the firm
for its survival and growth. Without this knowledge it cannot plan any of its production
and other activities. It forms the basis for the requirements of raw material, equipment,
labour, capital etc. All the these decisions are basically related to the size of production
which in turn can be determined from potential demand for the product. Thus the
starting point of all decisions related to production strategy is the sales forecast for a
specified period.
34.2 Definition
In literary sense forecasting means prediction. Forecasting may be defined as a
technique of translating past experience into prediction of things to come. It tries to
evaluate the magnitude and significance of forces that will affect future operating
conditions in an enterprise.
Sales forecast is the task of projecting the future sales of the firm. It indicates how much
of a product is likely to be sold during a specified period in a specified market, at
specified prices.
Sales forecast is an estimate based on some past information, the prevailing situation and
prospects of future. It is based on an effective system and is valid only for some specific
period. Due to dynamic nature of market phenomenon sales forecasting has become a
continuous process and requires regular monitoring of situation.
Sales forecasting has been defined by the American Marketing Association as, Sales
forecast is an estimate of sales in dollars or physical units for a specified future period
under a proposed marketing plan or programme and under an assured set of economic
and other forces outside the unit for which the forecast is made.
In the words of Philip Kolter, The company sales forecast is the expected of company
sales based on chosen marketing plan and assumed marketing environment.
34.3 Types of Forecasting
There are two types of forecasting:
1) Short-term forecasting
2) Short-term forecasting
1. Short term forecasting
The forecasting which covers a period of three months, six months or one year is
generally called as short term forecasting. The period for which forecasting is done
depends upon the nature of business. Forecasting is done only for a short period when
the demand fluctuates from one month to another.
2. Long term forecasting
This type of forecasting usually covers a period of 5 to 10 years, and in some
cases even 20 years. However, beyond 10 years, the future is assumed to be
uncertain. But in many industries like ship building, petroleum refinery, generation
of electricity etc., a long term forecasting is needed as the total initial investment cost
of equipment is quite high.
34.4.Objective of Forecasting
(a) Objectives of short term forecasting:
(i) Formulation of suitable production policy. Forecast helps to formulate a
suitable production or over production may not arise.
(ii) Regulate supply of raw material: It is possible to evaluate the
requirements of raw materials in future so as to ensure regular and continuous
supply of materials on the basis of estimated sales and also to control the size of
inventory at economic level.
(iii) Best utilization of machines: The operations can be so planned that the
machines are utilized to its maximum capacity.
(iv) Regular availability of labour: One of the objectives of sales forecasting
is also to arrange for trained personnel and non-technical workers so that they
might not experience any shortage of personnel and at the same time they dont
remain idle when the production is curtailed.
(v) Price policy formulation: Sales forecasts enable the management to
formulate some appropriate pricing mechanism. So that the level of prices does not
fluctuate too much in the periods of depression or inflation.
(vi) Forecasting of short term financial requirements: On the basis of sales
forecast it is possible to determine the financial requirements of the enterprise for
the production of desired output and arrange it accordingly much in advance.
(vii) Setting the sales target: Sales forecasts are calculated for different market
segments and then the sales targets for various territories are fixed accordingly.
This later on becomes the basis to evaluate and control sales performance.
(b) Long term objectives of forecasting:
(i) Deciding Plant Capacity: The long run objective of sales forecasting is to
plan capacity in accordance with the demand. The size of the plant can be
determined such that the output conforms with sales requirements. Too small or
too large size of the plant may not be in the economic interest of the enterprise. By
studying the demand pattern for the product and the forecasts for future the
enterprise can plan for a plant with output of desired capacity.
(ii) Manpower Planning: Reliable and accurate forecast can help the
management to assess the appropriate manpower requirements. This can ensure
best manpower facility to carry out the production in the long run without any
hindrances.
(iii) Estimating Cash Inflows: Cash inflows from sales can well be estimated
through sales forecasting by determining the cash and credit sale ratio. It can also
help to plan for credit policy of the firm.
(iv) Determining Dividend Policy: The profits can also be forecast on the
basis of gross profit ratio on sale and divided policy can be determined.
(v) Planning of Long-run Production: Long-run production planning also
depends upon sales forecasting. In the long run product has to be adjusted to the
market demand and other conditions.
(vi) Long-run Financial Requirements: Sales forecasting also helps to
determine the long-run financial requirements of the organisation for working
capital as for capital expenditure.
(vii) Budgetary Control Over Expenditure: In forecasting the sales, all the
activities are to be forecast and for this purpose budget is to be prepared for the
income and expenditure of the orgnaisation. The budgeting figures for income and
expenditure may then be compared with the actual performance and any variation
is removed. Thus budgetary control over expenditure becomes possible.
34.5. Importance of Sales Forecasting
Manufacturing organisations plan their production on the expectation of future
demand. It is on the basis of correct forecast that the producer is able to adjust his
production to the market demand and adjust the productive capacity of the plant.
Forecast tries to maintain a balance between production and distribution policies of the
enterprise. For the success and achievement of the overall objectives of the organisation
it is essential to review the sales forecast periodically.
According to John D.Luth A good sales forecast is undoubtedly the most
important single planning tool.
Sales forecasting helps in business planning by providing a realistic estimate of
market trends and sales possibilities.
It helps the to decide which products are to be dropped. Which ones are to be
added in line and which ones need modification.
It enables the firm to identify its precise position in the market; which facilitates
optimum utilization of resources, optimum penetration of markets and optimum
penetration of markets and optimum gains from the marketing opportunities.
Sales forecasting also forms the backbone of customer-oriented marketing. It not
only provides excepted sales in the number of products but also vital clues regarding
customers tastes, preferences and needs .
The firm can carry out its marketing planning and strategy formulation and
develop its marketing objectives in a specific manner.
The sales forecast is vital for determining sales targets and for decisions on
physical distribution, transportation, promotion, sales force and pricing. In short the
entire marketing mix, i.e. product, price, promotion and distribution revolves around the
sales forecast.
34.5 Process of Sales Forecasting/Steps in sales forecasting
The steps involved in forecasting may very from company to company because the
nature of the business and of the product are not similar for each enterprise. Market
conditions also very from company to company and from product to product. However,
the following steps are generally followed by most of the industries in ordinary
circumstances.
The following are the main steps in demand forecasting:
1. Determining the objective of forecast: Certain points in this respect should be very
clear before taking up the forecasting test such as period of forecasting (short term,
long term): area of sales forecasting. unit of sales forecasting (i.e in quantities or
values) the time, labour and money to be employed on forecasting. All these points
are determined taking into account the objectives of sales forecasting.
2. Sub-divide the task of forecasting: Sub-divide the forecasting programme into
homogeneous groups according to product, area, activities or customers. The total
sales forecast of the company will be the sum total of all the groups.
3. Determine the relative importance of factors: So that due weight age may be given
to different factors affecting forecast.
4. Select the method to be used for forecasting: The method is to be selected by the
appropriate authority taking into account all the relevant situations, purpose of
forecasting and the degree of accuracy required.
5. Collect and analyse the data: By applying method, the necessary data for forecast
are collected, tabulated and cross-checked. The data, are interpreted by using
statistical techniques. It may be called as the preliminary sales forecast which
forms the basis for final sales forecast.
6. Study the correlation between sales forecast and sales promoting plans: Marketing
the forecast reliable, the sales promotion plans such as advertising policy, personal
selling and other policies should be reviewed with reference to the preliminary
sales forecast.
7. Study of competitors activities : Volume of sales of a company is largely affected
by the activities of competitions and, therefore, it is essential to study the
competitors activities, policies, programmes and strategies and also their effects
on the market and adjust the forecasting accordingly.
8. Prepare final sales forecasts: The preliminary sales forecast results are converted
into final sales forecast relating to the products and territories involved. The
aggregate of sales forecasts of different products, or territories or customers or
activities may form the sales forecasts of the enterprise.
9. Evaluation and adjustments: The actual sales performance in the coming period
should be reviewed and evaluated from time to time. The evaluation may be made
monthly , quarterly, half yearly or yearly. The forecast figures may be revised in
the light of difficulties experienced during the course of actual operations. On the
expiry of forecasts period the actual sales and forecast sales and forecast sales
should be compared and causes of variation found out which may help to improve
the next period sales forecasts.
34.7 Advantages and Limitations of sales forecasting
Advantages:
(i) Helps in Effective planning. Forecasting helps in effective planning by providing
a scientific and reliable basis for anticipating future operations such as sales,
production, inventory, supply of capital etc.
(ii) Helps in removing the weaknesses of orgnaistion structure. Since it leads to
rationalisation of various procedures for the achievement of organisational
objectives.
(iii) Helps in Better Co-ordination. It helps in better co-ordination of various resources
which leads to better utilization of resources and reduction in waste and
inefficiennces.
(iv) Achieves Co-operation in the Enterprises. Various executives at different levels
participate in the process of forecasting. This creates a sense of a sense of
belongingness among them.
(v) Provides a Basis for Effective Control. Forecasting provides a basis for effective
control by providing information where higher degree of control is to be exercised.
The managers car predict the weaknesses of their departments through forecasting.
(vi) Important at the national level. Economic forecasts of various factors at the
national level help in planning for economic development.
Limitations of Forecasting:
Forecasts are only estimates of future condition. They can never be actual
position. They can only give a best estimate of future courses of events, but they can
never be hundred percent accurate and reliable. The following are some of the
limitations of sales forecast:
(i) Forecasting is based on postulations and assumptions and assumptions and hence it
is subject to some guess work and possibility of error.
(ii) Forecasting is usually based on past data but future may not be a copy of the past.
(iii) Changes in consumers need, taste fashion, style etc. may causes inaccuracy in
forecast.
(iv) There may be lack of history in case of a new product.
(v) Forecasts are not full proof and condition proof and if there are changes in the
general economy of the country; they may not materialise.
(vi) Development of new products, mateirals methods may introduce error in the sales
forecast of a particular product.
(vii) There may be lack of efficient and experienced sales force.
(viii)Lack of sales history in case of a new product makes the forecast difficult.
(ix) Short term forecasting is more accurate than long term forecasting and hence its
usefulness is limited to short-term purposes.
34.8 FACTORS AFFECTIGN FORCASTING
(i) General Business Conditions
(ii) Conditions Within the Industry
(iii) Conditions Within the Company
(iv) Factors Affecting Export Trade
(v) Political Stability
(vi) Govt. Restrictions
(vii) Fiscal and Monetary Policy
(viii) Price Level and Trend
(ix) Technological Research and Development
(i) General Business Conditions. While making sales forecast the marketer should
take into consideration the general conditions of the economy, growth of
population, distribution of wealth and income, general cons toms, fashion and
seasonal fluctuations etc., during the future period.
(ii) Conditions within the Industry. While making sales forecast the changes going
on all the time in the total demand of the product, technological developments
should be taken into consideration. The number of other units engaged in the
industry and their sales, research, potentials and product development, etc., have to
be carefully considered.
(iii) Conditions within the Company. Internal changes within the company in the
coming future also affect future sales. Such changes may be in price structure,
distribution channel, sales promotion measures, product or other marketing
policies of the company, future expansion plans, plans for product development
etc. It is therefore essential to anticipate the extent to which such measures may
affect the future sales. There are the internal factors which are well within the
control of the company.
(iv) Factors Affecting Export Trade. If the company is engaged in the export trade,
the marketing manager must also consider the various factors in forecasting the
export sales. Such factors include export and import controls impressed by the
government, export conditions, export import policy, export finance, new
agreements etc.
(v) Political Stability. If the nation is practically stable, the business flourishes.
Things outside the business remain static and stable. Generalisations come true and
so the forecasts.
(vi) Government Restrictions. Today Govts. all over the world are interfering more
and more in business activities through various restrictions and control. If these are
announced on a long term basis forecasting becomes easy and if they are for a
short period forecasting is rendered difficult.
(vii) Fiscal and Monetary Policy. The frequency of changes in the fiscal and monetary
policy do affect the forecasting. From forecasting point of view a flexible but less
frequency changing fiscal and monetary policy is regarded as good.
(viii) Price Level and Trend. Frequent and wild changes in price levels do adversely
affect the forecasting. On the contrary stable price trends helps in achieving the
objectives of forecasting.
(ix) Technological research and development.
34.9 MARKET POTENTIAL
Market potential is the total possible sales by all the firms selling the product in a
given market. It gives an indication of the ultimate potential for that product and
industry as a whole, assuming that the ideal marketing effort is made.
Company potential refers a part of the market potential, which an individual firm
can achieve at the maximum in a given market, under ideal conditions and on the
assumption that the ideal marketing effort is made.
The term Market demand and company demand refers to those portions of market,
market potential and company potential that are achievable under existing conditions.
Market forecast and company forecast refer to what the industry and the firm
respectively will sell in actual practice during the period of the forecast.
Thus company potential is a part of market potential, company demand is a part of
market demand and company forecast is just a part of market forecast.
34.10 METHODS OF SALES FORECASTING
The important methods of sales forecasting are:
(1) Jury Method/Executive Opinion Method
(a) Top Jury Method
(b) Percolated Jury method
(2) Survey of Experts Opinion Method
(3) Sales Force Composite Method
(4) Survey of Buyers Intention Method
(5) Market Share Method
(6) Analytical and Statistical Methods
(a) Single Projection Method
(b) Extrapolation Method
(c) Moving Average Method
Production Planning and Control
28.1. INTRODUCTION
Production. Production is the process by which goods or services are created.
Production can also be defined as a means of converting the raw materials into finished
products by performing a set of manufacturing operations in a pre-determined sequence
that transforms material from a given to a desired form. The transformation may be done
in one or in a combination of the following ways:
I. Transformation by disintegration, having essentially one ingredient as input and
producing several outputs. The transformation is generally accompanied by changes
in the physical shape of the input, such as changes in the physical state or in the
geometrical form. Examples: making components from standardized materials on
machine tools, rolling steel bars from cast ingots, making components by smithy and
forging operations etc.
2. Transformation by integration or assembly, using several components as inputs and
obtaining essentially one product as output. Examples : producing machines,
household appliances, automobiles, radio and television sets etc.
3. Transformation by service, where virtually no change in the object under
consideration is perceptible but where certain operations may be performed to
change one of the parameters which define the object. Ell:amples : sizing and
coining in press work, servicing and light repairs of automobiles, loading and
unloading of trucks, transportation from one place to another which gives place
utility etc.
Planning
Planning means preparing the scheme in advance before the actual work is
started. It may also be defined as the pre-determination of future achievement to meet
the desired objectives. Planning begins with an analysis of the given data, on the basis of
which a scheme for the utilization of the firm's resources can be outlined so that the
desired target may be most efficiently attained. Planning in fact sets up the standards
performance.
Before starting the production, it is necessary to decide in advance what to
produce, how much to produce, where to produce and where to sell. Therefore
production planning is the pre-determination of future achievements in type of product,
volume of production, quality, time, price in manufacture and the resources required. It
analyses all the problems likely to arise in manufacture and decides in advance how
these difficulties can be overcome.
Control
Control means the supervision of all the relevant operations with the help of
control mechanism that feeds back the progress of the work. Controlling is made by
comparing the actual performance with the present standards (plan) and deviations are
analysed. The control mechanism is also responsible for subsequently adjusting,
modifying, and redefining plans and targets, in order to ensure attainment of prespecified
production foals, in the most efficient and effective manner.
28.2. DEFINITIONS OF PPC
Some of the important definitions of production planning and control are given
below:
Production planning and control may be defined as the direction and co-
ordination of the firm's material and physical facilities towards the attainment of pre-
specified production goals, in the most efficient and economical manner.
According to Samuel Elion : "The highest efficiency in production is obtained by
manufacturing the required quantity of the product, of the required quality, at the
required time, by the best and cheapest method."
To attain this target, management employes production planning and control, the
tool that co-ordinates all manufacturing activities. The four factors mentioned above-
namely: quantity, quality, time and priceencompass the production system, of which
production planning and control is the brain.

According to Charles A. Koepke: "Production planning and control may be
defined as the coordination of the series of functions according to a plan which will
economically utilize the plant facilities and regulate the orderly movement of goods
during the entire manufacturing cycle, from the procurement of all materials to the
shipping of finished goods at a predetermined rate."
Production planning and control comprise the planning, routing, scheduling,
dispatching and follow-up functions in the productive process, so organised that the
movement of material, performance of machines and operations of labour, however
subdivided, are directed and coordinated as to quantity, quality, time and place. It is
based on the principle 'plan your work and work your plan'. -Alford and Beatty
In simple words, production planning and control means:
(a) a complete plan.
(b) a follow up procedure for determining how closely the plans are being followed.
(c) a means to regulate the mechanism to meet the requirements of proposed plan.
(d) a procedure to employ right quantity and right type of personnel at the right place.
28.3. OBJECTIVES OF PPC
There are three M's of production viz, men, materials and machines without
which production cannot be carried out. The production planning and control (P.P.C.)
system integrates and coordinates the use of manpower, machines and materials for the
efficient production to meet the sales requirements.
In recent years it is increasingly becoming apparent that planning and control
systems are the basic activities that determine the effectiveness of an enterprise. In fact it
is the nerve centre of an organisation whose effort is mostly to maximize the output and
profit subject to shop capacity and marketing constraints.
To run, an industrial plant whether in public sector or in private sector. to stay in
business and provide for its dynamic growth efficient production planning and control
system is necessary.
The major objectives of PPC can be stated as :
(I) To design a system and plan, by which production may be carried out with a view to
meet promised delivery date consistent with minimum cost and quality standard.
(2) To ensure efficient utilization of production facilities.
(3) To coordinate the production activities of different departments,
(4) To maintain adequate but not excessive stock of raw materials, work in process and
of finished goods to meet production requirements and delivery schedules at the
most economical level.
(5) To ensure production of right product in right quality at the right time.
(6) To maintain flexibility in manufacturing operations, to accomodate rush jobs or to
meet contingencies,
(7) To co-ordinate labour. machines and equipment in the most effective and economic
manner,
(8) Ensuring smooth flow of materials by eliminating bottlenecks if any. in production.
(9) Establishing targets and checking it against performance.
(10) To provide alternative production strategies in case of emergencies.
(11) To determine the nature and magnitude of various input factors to manufacture the
desired output.
(12) The PPC department guides production by preparing and issuing manufacturing
orders which direct the use of facilities and material and allocate labour to the
output of the required quantity of products of the required quality.
In short PPC regulates and controls "how", "where" and "when" work is to be
done.
28.4. FUNCTIONS OF PRODUCTION PLANNING AND CONTBOL
The various functions of production planning and control can be classified into
three main categories or phases as follows:
(I) Planning phase
(2) Action phase
(3) Follow up or control phase.
These three phases as mentioned above make up the main body of functions of
PPC. There are other secondary functions which are essential contributors to the
efficient performance of production, planning and control. In addition there are other
functions which are supported by these three phases which are not generally considered
to be direct functions of production planning and control. These include quality control-
cost control and so on.
Relations between Production Planning and Control
There exists a very close inter-relationship among the phases and functions of the
production planning and control and they are mutually supporting. For instance, realistic
planning is quite dependent upon the data which is compiled during the function phase.
Action. in turn, is dependent upon continuous planning of the work to be performed by
the activity. Follow-up is the comparison of the work that was originally planned against
the work actually done. It must be understood, that if the plans are lacking, or not slated
properly or are recorded Inadequately in terms of objectives, starting and completion
dates and utilisation of resources, there will not be a basis for a comprehensive follow up
phase.
Relation between production planning and production control
The planning and control is an integral part of the system and it is very difficult
to isolate one from the other. They are so Inter-related that one is always identified with
the other. This can be better explained by control cycle as shown in Fig. 28.2. Planning
concerns with the formulation of production strategies and targets for the enterprise
whereas control is vested with actual implementation and execution of planned
objectives. Production planning determines the operations required to manufacture the
production and control regulates and supervises these operations. Through production
control information the organisation can locate shortcomings in the planning process and
the necessary modifications can be done at the time of planning In future. Similarly,
production control operations can be improved to adjust with the planning requirements.
Prior Planning:
Prior planning implies that a course of action is established in advance. The
whole activity must be planned and exists on paper before the ver:' first action takes
place.
(1) Fore-casting (Estimation of future work) : Fore-casting is defined as the estimation
of future activities i.e. the estimation of type, quantity and quality of future work.
These estimates provide the basis for establishing the future requirement for men,
materials, machines. time and money.
(2) Order writing (Preparation of work authorisation): If the work is to be controlled. it
must begin with a specified documents authorising it. So it means giving the
authority to one or more persons to do a particular job.
(3) Product design (preparation of specifications) : After the work authorisation has
been prepared the next step is to collect the information necessary to describe the
work in details. This includes blue prints or drawings, a list of specification, a bill of
material and so on.
Action Planning:
In any type of work activity the following steps are necessary for planning details
of the work to be done:
(1) Process planning:
The determination of most economical method of performing an activity, all factors
being considered.
Routing. The arrangement of work stations is determined by the route.
(2) Material control:
Determination of material requirements and control of material (inventory control).
(3) Tool control:
Tool control may be subdivided into two categories: (a) Design and procurement of
new tools.
(b) Control storage and maintenance of tools after procurement.
(4) Loading:
Determination and control of equipment and manpower requirements. Loading
may be defined as the assignment of work to the facility. The facility may be equipment,
manpower or both.
(5) Scheduling:
Determination when the work is to be done. Scheduling consists of time phasing
of loading (workload) i.e. setting both, starting and ending time for the work to be done.
The common practice dictates that routing, loading and scheduling be performed
simultaneously.
Action Phase:
The work is started in the action phase. There is only one production planning
activity in action phase i,e. dispatching. Dispatching is the transition form the planning
phase to action phase.
It consists of actual release of detailed work authorisation to the work centres.
Follow up or Control Phase :
Once the work is started in an activity it is necessary to evaluate continuously the
progress in terms of plan so that deviations can be detected and corrected as quickly as
possible. The control phase accordingly consists of two parts:
(1) Progress reporting: (Data collection). The first step in progress reporting is to collect
data for what is actually happening in the activity (Progress of work).
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(2) Data interpretation. After the data has been collected. then it is nece. Ito interpret
it by comparing the actual performance against the plan.
Corrective Action:
(1) Expediting. If the data collected from the production unit indicates that there is
significant deviation from the plan and the plan cannot be changed. then some
action must be taken to get back on plan.
(2) Replanning. It should be emphasised that the plan is not to be changed but to be
followed. however, if after expediting to correct deviation it is found that, it is
impossible to perform according to plan. It would be necessary to replan the
whole affair. It may also be found that there were errors made while developing
the original plan. In all such cases replanning is necessary.
28.5. ORGANISATION OF PPC DEPARTMENT
The PPC department must be carefully organized to carry out the activities
and procedures established in the planning system. Fig. 28.3 illustrates the
organisation structure for a medium sized firm engaged in job order or semi-
diversified manufacture.
Function Phase Formal Technology
(1) Estimate of future work
(forecasting)estimation of material,
time and money
(1) Prior planning (1) Fore-casting
(2) Preparation of work authorisation (2) Order writing
(3) Preparation of specification
(Blue prints drawings, list of
specification Bill of material)
(3) Product design
(4) Preparation of detailed work plan (2) Action planning (4) Process planning
(Routing) sequence of
operation
(5) Determination of requirements and
control of materials
(5) Material controlling (to
maintain optimum inventory
levels)
(6) Determination of requirements and
control of tools
(6) Tool control
(a) Design and procurement
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of new tools
(b) Control storage and
maintenance of tools after
procurement
(7) Determination of the requirements
and control of equipment and
manpower
(7) Loading Assignment of
work to facilities machinery,
manpower or both without
time factor (at top
management level)
(8) Determination when work will be
done
(8) Scheduling, time phasing
of loading at lower level of
PPC
(9) Starting of the work (3) Action phase (9) Dispatching (work
assignment to various shops)
(10) Collecting data (4) Follow up phase (10) Data collection
(11) Interpreting the data (a) Progress
reporting
(11) Data Interpretation
(12) Correcting the work plan (b) Corrective
action
(12) Expediting
(13) If the planning is to be redesigned (13) Replanning
MODULE-2
28.6. ROUTING
Routing may be defil1ed as the selection of the path which each part of the
product will follow, while being transferred from raw material to finished products.
Path of the product will also give sequence of operations to be adopted while
manufacturing.
In other words, routing means determination of most advantageous path to be
followed from department to department and machine, till the raw material gets its
final shape. Routing is related to considerations of layout, temporary storage of in
process inventory and material handling.
According to Alford and Beatty routing is defined as, "the specification of the
flow or sequence of operations and the processes to be followed in producing a
particular manufacturing lot".
Routing is an important function of the production planning and control
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because, it has a direct bearing on the "time" as well as "cost" of the operations.
Defective routing may involve back tracking and long routes. This will unnecessarily
prolong the processing time. Moreover, it will increase the cost of material handling.
The prolonged processing time will increase cycle time and will slow down the rate
of production involving the increase of overheads on the production. Routing is
affected by the plant layout. In fact, routing and plant layout are closely related. In
the product layout the routing is short and simple while, under the process layout it
tends to be long complex.
Routing Procedure
(1) Analyse the product. The finished product is analysed and borken into number of
components required for the product.
(2) Make and Buy decision. It mean te> . ~cide whether all components are to be
manufactured in the plant or some are to be purchased from outside. Make or buy
decision depends upon the work load in the plant already existing, availability of
equipment, labour and economy considerations.
(3) Raw material requirements. A part list and bill of materials is prepared showing
name of the part, quantity, material specifications, amount of material required
etc.
(4) Operations through which raw materials are to undergo are listed (in a proper
sequence).
(5) Machines to be used, their capacity is also listed.
(6) Time required for each operation and subassemblies is listed.
(7) The lot size is also recorded.
The data thus obtained is utilized for preparing master route sheets and the
operation charts. The master route sheets give the information regarding the time
when different activities are to be initiated a.nd finished, to obtain the product at the
required time.
The next step is to prepare the route sheets for the individual items or
components.
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Route Sheets
The operation sheet and the route sheet differs only slightly. An operation
sheet shows every thing about the operations, i.e. operation descriptions, their
sequence, type of machinery, tools, jigs and fixtures required, set up and operation
times etc. Whereas the route sheet also details the section (department) and the
particular machine on which the work is to be done. The operation sheet will remain
the same if the order is repeated but the route sheet may have to be revised if certain
machines are already engaged to other orders on hand. Except this small difference
both sheets contain practically the same information and thus generally combined
into one sheet known as operation and route sheet.
Part No. Ac/57
Name: Gear
Material: M.S.
Quantity-100 Nos.
Department Machine Operation Description Tool
Jigs
/fixtures
Time
Setup
time
Operation
time
Smithy Power
hammer
pH/15
1
2
Forge leaving for
machining all
over Punching
the hole in the
forging
4 hrs
1 hr
30 min
25 min
Heat
treatment
Furnace
F/H/4
3 Normalising 4 hrs. 4 hrs.
Machine
shop
Centre
Lathe
C/L/5
4 Face two ends,
Turnouter teeth
Lathe
tool
Chuck 15
min
1 hr.
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Milling
machine
M/MC/15
5 Cut teeth Side
and
face
cuatter
Dividing
head
40
min
5 hrs
Slotter
SL/7
6 Make key way Slotting
tool
10
min
30 min
The route sheet also provides the sequences of various orders as well as the
best/optimum sequence for the desired operations taking into consideration the
resources available. This can be done by sequencing assignment, CPM and PERT
methods.
The following points must be remembered in mind for drawing route sheets:
(I) The machines are to be operated at full capacity.
(ii) The product passes through those work centres which are manned by best
possible personnel.
(iii) The route is shortest and economical.
(iv) The person solving routing problem should be well-acquainted with various
operations.
Routing in job order, intermittent and continuous production
Routing In continuous production industries does not present any problem
because of the product type of layout, where the machines are arranged according to
the sequence of operations required to be performed on the components.
As the production is made of standardized products, the number of operations
and sequence of operations arc standardized. The machines are arranged in sequence
with automatic material handling systems. As the production is continuous and
constant, routing becomes a routine and mechanical function. The routing function
requires special attention only when the production flow is interrupted due to certain
factors like machine breakdowns, power cut, material shortages etc. In automation
routing is still simple and is governed automatically.
In job order production the machines arc arranged according to the process
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layout. ln job order production, since every time the Job IS new, the operations differ
from job to job according to varying specifications of individual orders. Thus the
number of operations and sequence of operations vary considerably. The route sheet
is made for Implementation of each order and this involves a greater amount of work
experience. The product passes through a larger shop floor involving back tracking.
The routing is also subjected to the bottlenecks, waiting and rushing according to the
backlog of work and the machine loads available for them. Thus, In job order
production the routing function is rather difficult and complex.
In intermittent production also, generally the machines are arranged in
process layout. The operations and their sequence differ from batch to batch. The
route sheet will have to be revised whenever the production of the batch changes.
Thus routing is relatively simpler as compared to that in job order 'production but
difficult and complex as compared to continuous production.
Advantages of Routing:
(i) Ei ficlentuse of available resources.
(ii) Reduction in manufacturing costs:
(iii) Improvement in quantity and quality of the output.
(iv) Provides a basis for scheduling and loading.
28.7. SCHEDULING
Scheduling may be defined as the assignment of work to the facility with the
specification of times, and the sequence in which the work is to be done. Scheduling
is actually time phasing of loading. The facility may be man power, machine or both.
Scheduling deals with orders and machines, it determines which order WIll be taken
up on which machine in which department, at what time and by which operator.
Scheduling may also be defined as the fitting of specific jobs into a general
time-table so that orders may be manufactured In accordance with the contractual
liability. or, in mass production, so that each component may arise at and enter into
assembly in the order and at the time required.
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:'
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In the words of 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:'
Objectives of Loading and Scheduling:
I. Scheduling aims to achieve the required rate of output with a minimum of delay,
and disruption in processing.
2. To provide quantities of goods necessary to maintain finished inventories at levels
predetermined to meet delivery commitments.
3. The aim of loading and scheduling is to have maximum utilization of men,
machines and materials by maintaining a free flow of materials along the
production line.
4. To prevent unbalanced allocation of time among production departments or work
centres with a view to eliminate idle capacity.
5. To keep the production cost minimum.
Since sales forecasts and customer's orders provide the information for
scheduling, close co-operation should exist between planning department and the
sales department. For example, the planning department should, when necessary,
make special provisions to fill "rush" orders and thus aid in giving new business, and
the sales department should endeavour to forecast sales sufficiently far in advance to
enable the ppe department to plan steady production, employment, and procurement.
Factors affecting Scheduling. The following factors govern the scheduling
and arc to be considered before establishing scheduling plan:
(a) External factors. The external factors are the factors which are not within the
control of the management. They are dictated by the outside forces to which the
management tries to adjust.
The important external factors are as under: (I) Customer's demand.
(2) Customer's delivery dates
(3) Stock of goods already lying with dealers and retailers.
(i) Customer's demand. It is estimated by the sales forecasting. In the continuous
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production, scheduling is based on the forecasts of the expected sales of the
specific items. In the intermittent production, the forecast is made on the basis of
the expected volume of business in rupee terms.
(ii) Customer's delivery dates. In a continuous production with seasonal demand, the
scheduling should be made in such a way that it may maintain a balanced
production throughout the year reducing the stock of inventories with a constant
level of production. In the intermittent production, the seasonal demand may be
adjusted by giving delivery on agreeable delivery dates to the customer order.
Generally, the additional orders are not accepted if they are not fitting into the
planned production.
(iii) Stock of goods already lying with dealers and retailers. This situation arises in
case of continuous production of standardized items. Usually, the dealers and
retailers are maintaining certain stock levels with them. The scheduling should be
made in the light of the stock position with the dealers and retailers.
(b) Internal factors. These are the factors which are within the control of the
management. These factors should be manipulated in such a way that objectives
of the production function can be achieved most efficiently and economIcally.
Some important internal factors are as under:
(I) Stock of finished goods with the fir~.
(2) Time interval to process finished goods from raw material. (3) Availability of
equipments and machines.
(4) Availability of man power.
(5) Availability of materials.
(6) Additional manufacturing facilities if required, and (7) Feasibility of economic
production runs.
1. Stock of finished goods with the firm. In the continuous production where the
production is made to stock, the scheduling should be adjusted to the stock of the
finished goods with the dealers. Generally, the stock is maintained at certain
months supply on hand. The new sales forecast should be made and the
scheduling should be made in the light of the fluctuations in the stock holding.
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2. Time interval to process finished goods from raw material. In other words, how
much time will be required to manufacture each component, subassembly and
then assembly (i.e. the final product).
3. Availability of machines. The machines and equipments have varying production
capacities. Moreover, their occupancy scheduIJng can be made with the help of
"machine-load charts".
4. Availability of manpower. The scheduling should be made in the light of the
availability of the manpower. The rushing of production should be adjusted to
overtime working, extra shift working or hiring of the temporary labour. The slacks
should be adjusted through transfers if possible. Due consideration should be given
to the factors like induction and training to new employees. As far as possible the
layoffs should be minimized.
5. Availability of materials. Sometimes the production flow is interrupted by the
stock outs. In continuous production, proper stock levels should be maintained to
facilitate scheduling. In case of probable stock outs of strategic items, extra efforts
should be made to procure them as far as possible and the limited stock in hand
should be issued only to critical operations. The scheduling should be adjusted in
the light of such situation. In intermIttent production, the materials should be
acquired according to "the bill of materials" enlisting the need of specific order.
Such process will smoothen the scheduling task.
6. Manufacturing facilities. The manufacturing facilities in terms of power
requirements, material handling services, storekeeping, work-bench area and such
other facilities should be provided in adequate quantities so that it may not affect
the smooth flow of the production adversely. Such situation will facilitate the
scheduling function.
7. Feasibility of economic production runs. Undcr the economic lot production,
generally two costs are compared set up cost and the carrying cost. At economic lot
production these two costs are equated.
Master Scheduling :
Let us consider a computer centre, from the past experience it is known that
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the maximum number of hours that the equipment can be operated in a five days
week is 100 hrs. The remaining time must be available for routine maintenance and
repair work. Assume that the minimum number of hours will be eight hrs per day to
run it economically. For a control purpose it is necessary to plan the working of the
computer centre. As each job arrives at the centre the person maintaining the master
schedule estimates the number of hours the job will require. The number of hours in
the weekly coloumn of the master schedule indicates the number of hours for the
various jobs already assigned to the computer centre.
Assume that a new job arrives at the centre which requires completion during
the second week. If the number of hours required by the job does not exceed 27 hrs.,
it can be assigned directly to second week's work schedule. If the number of hours
required is less than 40 and more than 27 hrs. it can be assigned to both the first and
second weeks' work schedule and still it can be completed before the due time.
Master schedule for the computer centre
Maximum production-100 hrs. per week
Minimum production 8 hrs. per day
or (40 hrs per week in a 5 days week)
Weekly Week 2 Week 3 Week 4 Week 5
35 18 8 10 12
15 25 12 6 4
25 30 15
12 5
balance 27 hrs.
balance 13 hrs.
Production Scheduling
Production scheduling involves setting the time of performance for the
detailed operations of manufacture i.e., establishing the order of work at each
machine or stage of process in fabrication of parts and in the assembly of products.
The objectives of production schedules are:
(I) To meet the output goals of the master schedule and to fulfill delivery promises.
(2) To keep constant supply of work ahead of each machine; and
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(3) To put out manufacturing orders in the shortest possible time consistent with
economical operation. The schedules must, however, afford sufficient flexibility
to accommodate the normal irregularities and interruptions that occur in
manufacturing.
Data required for production scheduling. In order to achieve the objectives, a
production schedule must be formulated on the basis of accurate information. Blue
prints and bill of materials, master schedules, route sheets, inventory records, and
machine-load charts provides this basis.
1. The blue prints and bill of materials show the kind of items required and the
detailed work to be carried out.
2. Master schedule indicates the priority and the quantity of finished products to be
completed within a given period and the amount of raw material required.
3. Route sheet stipulates the operations and machines to be scheduled and the
processing times.
4. Inventory records show the availability of materials and tools and the time
required for the procurement of items not in stock.
5. Machine-load charts show the quantity of work already scheduled to various
machineslequipments and the amount of spare capacity available for use.
Preparation of production schedules. On the basis of available machine
capacities, materials, and labour the master schedule. the individual production
schedule is prepared. The dates for the beginning and completion of the work on
various processes and operations are recorded on production schedules. These dates
are then entered on route sheets and load charts to show machine allocation times.
The planners. therefore, prepare the detailed production schedule from the master
schedule as given below:
PRODUCTION (PARTS) SCHEDULE
Model : S 15 Month : April
Part No. For Assembly Quantity Required on Dates indicated
5 12 19 26
S 210 R 1 500 500 500 500
S-220 F 2 1000 1000 1000 1000
S-230 F 4 2000 2000 2000 2000
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S-240 F 2
S-250 T 1
S-260 T
Fig. 28.5. Production schedule for a repetitive manufacturing firm.
The production schedule when approved by the management, becomes the
blanket manufacturing order that authorizes production. The schedule, broken down
by component parts and production departments. tells the foreman the number of
units they are required to put out in the next period. The schedule should be released
sufficiently in advance to enable the foreman to recruit required labour and to
prepare machines formerly idle and enable purchasing agent to purchase needed
supplies.
The schedule also can serve as the purchase requisition for the required
materials and parts to meet the stipulated rate of output. The quantities required to
cover the needs of the production period can be computed from the schedule.
Purchased orders can then be placed for consecutive deliveries, timed to maintain the
rate of output.
28.8. MACHINE LOADING
Machine-load charts are prepared to assist in production scheduling as well as
routing. Machine load charts show the amount of work (in terms of hours, days, or
weeks) that has been assigned and scheduled to each machine. groups of identtcal
machines or shop departments. They frequently employ Gantt chart to indicate
graphically the volume of work ahead of machine/equipment and the amount of
capacity available for processing additional work.
Loading and scheduling are designed to assist in the efficient and systematic
planning of work. Loading provides a complete and correct information about the
number of machines available and their operating characteristics such as speed,
capacity, capability etc. This information can be used to calculate the difference
between work load and actual capacity and then to determine whether customers
order can be completed on due date or not.
Objectives of Loading. The following are some of the objectives of loading:
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(i) to plan new work orders on the basis of spare capacity available.
(ii) to balance the work load in a plant.
(iii) to maintain the delivery promises.
(iv) to check the feasibility of production programmes.
(v) they are also used during plant layout for balancing capacity and achieving a
uniform flow of work i.e. for eliminating bottlenecks or excess capacity at
specific machines and work places.
MACHINE LOADING
Machine radial drill No.9 Week Ending : May 5th Hrs.
40
ORDER
NO.
PART NO. OPERATION
LOT SIZE
NO.
HOURS
REQUIRED
BALANCE
OF LOAD
6993 D 4108 22 600 8 32
6994 D 4507 34 600 12 20
7005* S 470
28 (* 6 hours
carried to the
next week
1200 26 -
7005 S 470 28 1200 6 32
7008 T 847 16 600 10 22
Fig. 28.6. Machine load chart.
Adjustment to machine overloading and under loading. A machine is
overloaded when the total amount of work assigned for a given period is more than
that the machine can execute with its current capacity: Depending on bUSiness
conditions, overloading can be handled by (I) re-routing work to machines that have
unallocated capacity (balance capacity) (it) by operating machine overtime (iii) by
subcontracting some work (iv) or by purchasing additional equipment. Underloading
can be handled by : (i) acquiring more sales orders (ii) by scheduling work in
anticipation of future sales or (iii) as a last resort, by selling the machine.
28.9. DISPATCHING: (RELEASE OFWORK ORDERS)
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Dispatch function executes planning function. It is concerned with getting the
work started. Dispatching ensures that the plans are properly implemented. Dispatch
function authorizes the workers to do the work. The information collected In
scheduling and route sheet is transmitted into the orders. The prepared orders are
released to the concerned departments for actual implementation. Every care is taken
to issue clear cut instructions, in a simple form in written sheets which can be easily
understood and correctly implemented by the concerned persons and there is no
confusion.
In brief the activities of dispatching may be listed as below:
(1) Issue of Move orders. Move orders are issued to movement personnel giving
instructions regarding movement of raw materials from stores to the
manufacturing floor, or from machine to machine as the case may be.
(2) Issue of Tool orders. These are issued to the tool department to collect and make
ready tools, jigs and fixtures in advance of the time at which the operation will
commence.
(3) Issue of Job orders (job tickets). Job orders are issued to the operations or job
foremen for starting the work. Job orders are prepared in accordance with dates
and time previously planned and entered on the machine loading charts, route
sheets and progress control sheets.
(4) Issue of Inspection orders. Inspection orders are issued to the inspection
personnel giving instructions regarding Inspection centres, type of inspection
required at different stages of operations, gauges to be used etc.
(5) Issue of drawings, time tickets, instruction cards and other necesslu-Y
information. These are issued to the operators, so that they will carry out their
work smoothly without any difficulty.
(6) Issue of store orders. These orders are issued to the store to supply the raw
material against the proper authorizallon.
(7) Issue of orders to finished product stores. These orders instruct the finished
product store for collccting the finished products on determined lines.
In addition to any issue of the orders mentioned above the dispatching
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function also includes the following activities:
(8) Collection of time tickets, drawings and instruction cards for all completed
operations or jobs.
(9) Recording time of beginning and completing. Jobs, and calculating duration,
forwarding complete records to production department and time card to pay roll
department.
(10) Recording and reporting idle time of machines and operators.
Centralised ancl Decentraiised Dispatching
In a centralised dispatch system, a central dispatching department orders
d'ireetly to work stations. It maintains full record of capacity of each equipment and
work load against each machine. The orders are given to the .shop supervisor, who
runs the machines accordingly. In most of the cases the supervisor can give
suggestions as regards loading of men and machines under him.
The advantages of the centralized system are:
(I) A greater degree of overall control can be achieved.
(2) Effective co-ordination between different facilities is possible. (3) It has a greater
flexibility.
(4) Progress of the orders can be readily assessed at any time because all the
information is available at the central place.
(5) There is effective and better utilization of manpower and machinery.
In a decentralised system the shop supervisor performs the dispatch functions.
He decides the sequence of different orders and materials to each equipment and
worker. He is required to complete the work wilhin the prescribed duration. In case
he suspects delay with due reasons of the same he informs the production control
department accordingly.
The advantages of the decentralized dispatching system are :
(I) Shop supervisor has a better knowledge of his shop, therefore he can allot the
work to the most appropriate worker and the machine.
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(2) Elaborate reports and duplication of postings can be reduced.
(3) It is easy to solve day-to-day problems.
(4) Communication gap is reduced.
28.10. 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 manner to meet the sales requirements. The production
control directs and regulates all the activities of a production process. It verifies
whether the activities are going in accordance with production plan or not. Control is
some management process which constrains events to follow plans. It is some sort of
dynamic activity controlling the production cycle to ensure that facilities and the
personnel are economically utilised and that the products are manufactured within
minimum possible time and economically.
Production control provides the foundation on which most of the other
industrial controls are based. It is the hall mark of production efficiency. It is the
pivot around which the success of production revolves. It is a necessity and not
luxury; a profitable investment and not an expense.
Definition of Production Control
According to Mary Cushing Niles, "control is maintaining a balance in
activities towards a goal or set of goals evolved during production planning".
Planning only outlines some course of action whereas control is an execution process
involving standardization, evaluation and corrective actions.

According to Fayol, "control consists in verifying whether everything occurs
in conformity with the adopted plan and established principles. The objective of
control is to point out weakness or shortcomings if any, in order to rectify ~hem 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 sanctions."
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Thus production control is some scientific procedure to regulate an ordely
flow of material and coordinate various production operations to accomplish the
objective of producing the required quantity of the desired product, of the required
quality, at the required time by using the best and cheapest method i.e. to altain
highest efficiency in production.
Alternately, 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.
The control of production is necessary to ensure that the production schedules
are being met and the job will be delivered as per the pre-decided plans to satisfy the
requirements of the customers. Production control involves an information feed back
mechanism and a system of corrective action. Production control follows up the
scheduled plans, compares the actual output with the planned one, and points out
deviations, if any, so that the same can be corrected through the adjustments of men,
materials and machines.
In brief, a production control system: .
(i) receives work progress reports,
(i) compares them with the scheduled plans,
(iii) removes causes of delays in production,
(iv) modifies the schedules or plant capacities, and
(v) expedites the work.
Objectives of Production Control
Production control provides the foundation on which most of the other
industrial controls are based.
Production control is the hall mark of production efficiency. It is the pivot
around which the success of production revolves. Thus, the success of an enterprise
greatly depends on the performance of its production control department. The
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production control department generally has to perform the following functions:
(i) To organise production schedule in conformity with the demand forecast.
(ii) To have optimum utilization of resources in such a way that the cost of
production is minimised and delivery date is maintained.
(iii) Determination of economic production runs with a view to reduce setup costs.
(iv) Proper co-ordination of the operations of various sections/departments
responsible for production.
(v) To ensure regular and timely supply of raw material at the desired place and of
prescribed quality and quantity to avoid delays in production.
(vi) Perform inspection of semi-finished and finished goods and use quality control
techniques to ascertain that the produced items are of required quality.
Thus the fundamental objective of production control is to regulate and
control the various operations of production process in such a way that the items are
produced of right quality in right quantity at the right time with minimum effort and
cost.
Follow-up or control phase:
Follow up is a most important step of production control. As already
described, once the work has been started in the activity, it is necessary to evaluate
continuolJsly the progress in terms of the plan so that deviations can be detected and
corrected as quickly as possible.
The follow-up phase accordingly consists of :
I. Progress reporting
(a) Data collection b) Data interpretation
2. Corrective action.
1. Progress Reporting
This part of the follow-up phase is primarily a matter of communications.
One of the principles of sound production control system is that it must furnish
timely, adequate and accurate information about the actual progress of the work,
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delays, interruptions, bottlenecks and under or overloading. It IS a 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. It discovers causes of
delay which may be uneconomical lot sizes, schedule beyond the capacity of the
machines, underestimation of material, tools and manpower, errors in processing and
inspection.
Collecting Data (Recording actual production). The first step in progress
reporting is to collect data for what is actually happen 109 in the activity. This is a
problem of communication with production and requires a sound design of \he means
(media) by which data will be gathered and transmitted. The progress report
(collected data) should contain the following information in order to evaluate actual
performance against the anticipated plan and then to lake corrective action.
(i) Job identification. It includes order number and operation number.
(ii) Time of report, and
(iii) Work completed.
The data is collected and reported (i) at fixed intervals of time, i.e., weekly,
monthly, or yearly depending upon the project duration;
(ii) after the work has been completed, or after each stage of the work is completed,
it depends upon the size of the work.
(iii) by uSing the principle of "Management by Exception", according to which, one
reports only those things and at that lime when they require an action by the
planning group. It is assumed that un-reported events arc ging as per schedule.
Transmission of Report. The collected data may be transmitted by employing
anyone of the following systems:
(i) Written system.
(ii) Oral system (Telephone, Radio etc.).
(iii) Electronic system (Teletype equipment, Telantograph etc.)
Interpreting the data (Data processing) : After the data has been collected,
then it is necessary to interpret It by comparing the actual performance against the
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plan. The system must be designed to report progress in a simplified manner. The
important point to remember in the design of progress reports is that they must
almost automatically evaluate the situation for management. Management should not
be required to interpret the raw data in order to come up with the evaluation.
2. Corrective Action
After expediting it may be found that there is a significant deviation between
the planned work and the actual progress of the work. Since the plan is not be
changed but to be followed, some action must be taken to get back on plan. The
deviation caused may be due to production delays. The follow up man learns of the
delays through investigation and analysis of the production reports and also through
the personnel observations. He must not only take corrective action after the delay
occurred but also anticipate and prevent It before It actually develops.
(1) Lack of materials, tools etc. Shortage of materials, tools may arise because of:
(a) delivery failure.
(b) poor inventary control.
(c) inaccurate estimate of future requirements of materials, tools etc.
This can be prevented by closer follow up by the purchasing department after
the order for the material is placed and by proper inventory control.
(2) Equipment Breakdown. Equipment breakdown also causes delays in production.
Equipment breakdown can be m1lllmised by preventive maintenance. Sometimes
it may be advisable to provide a stand by equipment, to prevent such production
delays.
(3) Excessive rejections. Material scrapped at any point in the process in excess of
the scrap factor allowed subsequently causes a shortage in the finished item .
(4) Accumulation or in process inventories. This may be caused because of (i)
improper or inefficient material handling system, or (ii) capacity imbalance.
(5) Errors in planning. These are essentially errors of production management
whereby equipment is' scheduled with work beyond its capacity to produce and
the set ups are excessive. The follow up man by his close association with plant
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conditions is often able to discover such errors and have them rectified before
serious trouble IS caused.
(6) Other factors :
(i) Labour turnover or mass absenteeism.
(ii) Lack of necessary instructions and instruction materials.
(iii) Late starting of work.
(iv) Unexpected rush orders.
(v) Change in priority of orders due to the arrival of some new orders or due to
cancellation of a few previous orders.
Methods to take Corrective action
(1) Schedule Flexibility. It means keeping the schedule flexible to accommodate
unexpected events. Planning is done only for a percentage of total working time
(say for seven hours out of eight hours shift) and the remaining time is kept free
to take care of unexpected jobs. The percentage of time kept free for rush orders.
etc. is decided from the past experience.
(2) Capacity Modification. The following three methods can be employed for
modifying the capacity of the plant:
(i) Changing the amount of work within the plant by appropriate Make/Buy decisions
or by subcontracting the work to others.
(ii) Changing the number of working hours, either by employing more workers or by
using over-time with the same number of workers.
Making Plan Correction (Replanning)
It should be emphasised that the plan is not made to be changed, but to be
followed. However, after expediting to correct deviations, it is found that it is
impossible to attempt to continue with the original plan. It may also be found that
there were errors made while designing the plan. In all such cases, change in the plan
is mandatory, and the plan is modified to suit the new set of situations.
Advantages or better production planning and control:
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(1) Benefits to customer:
(a) Increased output can provide adequate product distribution.
(b) The customers can get the products at reasonable prices.
(c) Deliveries of goods would be as per schedules (better service to customers).
(2) Benefits to producer:
(a) Industries can earn more profit and can pay better wages to employees and better
dividends to shareholders.
(b) The system can provide uninterrupted employment to the individuals, therefore,
better employer
employee relations are possible.
(c) More effective use of material and human resources. (d) Improves the
competitive position of the firm.
(e) Right quality of products are produced in right quantity at right time. (Improves
the efficiency of production system)
28.11. PRINCIPLES OF SOUND PRODUCTION CONTROL SYSTEM
The following are the important principles of sound production planning and
control system. These principles or rules should be followed while designing the
production control system.
The production control system must:
I. Furnish timely, adequate and accurate information.
2. Be flexible to accommodate necessary changes.
3. Be simple and understandable in operation.
4. Be economical in operation.
5. Force prior planning and corrective action by the user of the system.
6. Permit management by exception.
All of these principles must be applied to all systems of production control.
They may also be used as qualitative measures for evaluation of the system.
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1. Furnish timely, adequate and accurate information.
This is probably the most important of all the principles. Unless the
information is timely. it is useless. This of course. also applies to adequate and
accurate information. All information that is obtained in the system must have these
three qualities to avoid production delays. As previously "pointed out,
communication information flow is the basis of any production control system.
2. Be Flexible.
When reference is made to the flexibility of a system, it refers not only to the
systems ability to adjust for variations in work loads. but also flexibility in terms of
modifying the system itself to accommodate changes in the operation of the
conditions that exist in the activity. Activities are dynamic; i.e. they are III a constant
state of flux. This is particularly true under conditions of rapid growth. Just because a
system that has been designed is adequate for conditions as they exist today does not
necessarily mean that it will be adequate for conditions that will exist in the near
future. Because of this it is necessary for the designer to keep in mind at all times
that a system must be adjusted to changing conditions within the organisation. This
may be done without completed disruption of the work that has been done in the past
3. Be simple and understandable.
By simplicity we mean that the system must be understandable to everyone
connected with it. This does not mean that the system in all phases must be
understandable to everyone. It only means that the part of the system which applies
to an individual in a particular function must be understandable to that individual. .
4. Be economical.
Economy of course, is the basic reason for having a production control
system. In all cases. we must get back more than a rupee for every rupee that is spent
in planning and control. This is also one of the most difficult steps to evaluate.
Many of the benefits accrued by production control are intangible, and cannot
be given in dinars. Only by comparing the cost of operation when no formal system
of production control was used against the cost when a production control system is
used could the economy be measured accurately.
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28.12. TYPES OF PRODUCTION (MANUFACTURING) SYSTEM
Modes. of manufacture. which may affect production planning and control
system, include three main relevant factors:
(1) The type of production i.e. the quantities of finished products and regularity of
manufacture.
(2) Size of the plant.
(3) The type of industry i.e. the field of specialisation of the plant.
The types of production systems can be broadly grouped into three headings
according to the volume of production and the regularity of manufacture:
(A) Job production. (B) Batch production.
(C) Continuous production.
(A) Job Order Production.
Job order production is the manufacture of products to meet specific customer
requirements of special orders. The quantity involved is small. usually one off or
several off. This type of production is mainly concerned with special projects.
models. proto-types, special machinery or eqUipment to perform specialised and
specific tasks. components. or subassemblies to provide replacement or repairs in
existing machinery etc. Examples. turbo-generators. large engines. material handling
systems. shipbuilding and many other manufacturing activities are of the job
production group.
Three types of job production can be defined. according to the regularity of
manufacture:
(a) A small number of pieces produced only once.
(b) A small number of pieces produced intermittently when the need arises.
(c) A small number of pieces produced periodically at known intervals of time.
When the order is to be executed only once, there is little scope of
improvement of production techniques by employing costly method studies,
research, special tools, or jigs and fixture, unless the technical requirement Justify It.
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But, II the order is repeated. tooling and jigs as well as specially designed inspection
gauges should be carefully considered because the effect on production time may be
considerable:
In this type of production, the products are made when orders are received
from customers. One order may be all together different from the other. Therefore.
prior planning becomes complex. Skilled labour is necessary to handle variety of
jobs. General purpose equipment is used since it can handle variety of jobs.
The output of the shop in job production is mainly governed by plant capacity
and as soon as the load presented by incoming customer orders exceeds this out put a
queue of orders is formed. When immediate increase in plant capacity is impractiable
the length of the queue is a major factor governing the sales policy of such plant, and
a certain amount of discrimination in order selection may be essential. .
Scheduling is dependent on assessment of production times, and estimating
(although it can be greatly improved by experience and skill of estimators) is based
on judgement and is too often reduced to a rule-of-thumb affair. Scheduling must
therefore be constantly amended to take account of reality. Repeated orders for the
same items usually do not require repeated planning. Production control is also
simplified in the case of repeated orders, especially at regular intervals. The master
schedule can also be constructed in which production time is balanced against plant
capacity, but such a state of affairs is rather rare. Usually the majority of orders are
executed only once. and a small percentage of them may be repeated regularly or
intermittently.
Characteristics of Job Order Production:
1. Small production runs
Job order production is characterised by the manufacture of one or few
numbers of single product designed and manufactured strictly to customer's
specification.
2. The flow of materials
The flow of materials and components between different stages of manufac-
ture is highly discontinuous due to imbalanced operation wise work content.
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3. Manufacturing cycle time
Relatively long delays occur at the assembly as well as at the material
processing stages due to lack of materials or components, imbalanced work flow.
design changes, design errors detected during manufacturing etc. Moreover, at times,
the time needed to design the special project undertaken exceeds its manufacturing
time. All these factors tend to lengthen the manufacturing cycle time.
4. Layout of plant and equipment
The machines are arranged according to process layout. Because the
operations and their sequence change from product to product.
5. Skill required
Highly skilled and versatile workers are necessary. They are expected to do
the work independently and display a great deal of initiative and judgment.
6. Quality of supervision
Highly competent general engineers are usually engaged as supervisors.
practical men with thorough training, capable of taking independent change of each
contract are employed to work at site. Close supervision is also necessary.
7. Cost of production
The unit cost of production is high. Since the firm cannot take the advantages
of large scale buying and automation.
(B) Batch production
Batch production is the manufacture of a number of similar articles, either to
meet a specific order or to satisfy continuous demand. When the production of the
batch is terminated the plant and equipment are available for the production of
similar or other products. The policies regarding tooling, fixtures, and other aids are
dependent on the quantities involved. If the order is to be executed only once, there
will be less justification for providing elaborate production aids than when the order
is repeated.
In batch production. too, three types can be mentioned:
(I) A batch produced only once.
(2) A batch produced repeatedly at irregular intervals when the need arises.
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(3) A batch produced periodically at known intervals to satisfy continuous demand.
The planning and control become more simplified as quantities increase and
as manufacture becomes more regular.
Two principal problems arise in batch production, the size of the batch
(number of components to be produced per lot) and scheduling of production.
The solution of these problems depends on whether production is governed
by external orders or whether the plant is producing for internal consumption. In the
case of external orders the batch size is normally determined by the customer to suit
his specific circumstances. But when the plant produces to stock both the batch size
and scheduling problems are matters of internal management decisions.
It is necessary to determine the optimum batch sizes, considering the set up
costs, which are involved before each production run, and the carrying costs incurred
when the finished product is held in stock. Once the suitable batch size is selected,
then master schedule is prepared to balance the total production requirements against
the available plant capacity. Batch production is a very common feature in industry.
Machine tool work, especially capstone and turret lathes, process work, forging and
casting processes, some glass manufacturing and chemical processes. very often
operate on a batch basis.
Characteristics of Batch Production:
(l) Short runs. Batch production is characterised by short production runs and
frequent changes in set ups.
(ii) Investment. Needs high investment. The production is generally made to stock.
(iii) Planning. Planning, routing and scheduling changes with fresh batch of orders.
(iv) Skill of labour. Skilled labour capable of handling variety of jobs is required.
(v) Quality of supervision. The supervisors need considerable knowledge of specific
process. The amount of supervision required in batch production is lower than
that of job order production.
(vi) Plant layout. Plant and equipment are procured and arranged to obtain flexibility.
General purpose machines and handling equipments capable of performing
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variety of operations with minimum set up times are installed according to
process layout.
(vii) Materi1 handling. Material handling in batch production is less as compared to
job order production.
(viii) Flexibility in production schedule. Disruptions due to machine breakdown or
absenteeism do not seriously affect production as another machine can be used or
another operator from another machine can be shifted.
(C) Continuous Production. Continuous production is the specialized manufacture
of identical articles on which the equipment is fully engaged. Continuous
production is normally associated wilh large quantilies and high rate of
demand. Since identical articles are produced the operations are repetitive,
production auxiliary aids, such as special tools, jigs and fixtures material
handling system, inspection -devices can be used advantageously.
Continuous production can be classified into two types:
(a) Mass production.
(b) Flow production.
In mass production, a large number of identical articles are produced. but
inspite of advanced mechanization and tooling the equipment need not be specially
designed for this type of article only. Both plant and equipment are flexible enough
to produce other products involving same production processes.
If the management decides that a certain line should be discontinued. the
machinery can be switched over to produce another article. Such change in policy
usually does not involve major modifications in plant layout but change in tooling
may be quite possible.
A shop of automatics is an example associated with mass production.
Although, the automatics may be continuously engaged on the production of. say a
certain type of pinions. they can be switched over to production of screw or similar
machine elements when the need arises. Another example is a highly mechanised
press-shop that can be utilised for the production of different components or products
made of sheet metal. without having to introduce major changes in the shop layout.
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In flow production, the plant, its equipments, and layout are primarily
designed to manufacture the product in question. Flexibility in selection of products
for manufacture is confined to minor modification m layout or design of models.
Notable examples are automobiles, engines, household machinery, chemical plants
etc. A decision to switch over to a different kind of product may not only result in
extensive tooling (this is often needed even when only the model is changed) but also
in basic changes in layout and equipment policy especially when special purpose
machines and complex material handling systems are involved.
Production planning and control in continuous production is usually far
simpler than in job or batch production. Extensive effort is required for detailed
planning before production starts, hut both scheduling and control need not usually
be very elaborate.
Characterics of Mass and Flow Production:
(i) Flow of material. The flow of materials is continuous and there is little or no
queing at any stage of processing.
(ii) Machines and plant layout. Special purpose machines are used and plant and
assembly stages arc laid out on the basis of product layout.
(iii) Material handling. Material handling is comparatively less firstly because
materials move through a short distance between stages and secondly the
material handling activity is mostly mechanised by conveyors and transfer
machines.
(iv) Skill of labour. Relatively low skilled labour is necessary.
(v) Manufacturing cycle time. The manufacturing cycle time is very short. The
machine capacities are balanced by line balancing.
(vi) Quality of supervision. Supervision is relatively easier as only few instructions
are necessary only at the starting of the job; since standard jobs are produced.
(vii) Flexibility in production schedules. Interruptions due to breakdowns and
absenteeism seriously affect production as stoppage of one machine in the line
usually disturbs the working of other machines. Systematic preventive
maintenance is necessary to prevent interruptions in production.
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Table 28.2 Characteristics of production system
Characteristics Job order type Batch production or
similar process
Continuous production
1 2 3 4
Examples Prototype models machine
tool manufacturing special
projects, large
turbogenerator, boilers, ship
building materials, handling
system, special electronic
equipments etc.
Shoe making, cloth
manufacturing,
forging, casting
processes, and
chemical plants etc.
Automobile industry,
electrical appliances,
household appliances,
sugar mills, toy
manufacturing,
company, Glass
manufacturing
End Product (2)
Quantity and
product design
Non standard (unique) Very
small. The product design
changes from the one order
to another
Standard (similar)
Wide range of
products are
manufactured in
small quantities in
lots. The product
design changes from
lot according to
product
specifications
Standard (indentical)
Few standard products
are manufactured in
large quantities. The
product design is to be
done only once.
(3) Equipment
used
General purpose General purpose Special purpose
(4) Type of
plant layout
Process layout (functional)
Process layout or
combination
Product layout
(5) Skill of
worker
Highly skilled to handle
special jobs
Skilled since there is
frequent changes in
product design and
machine set up for
each lot.
Semi-skilled or
unskilled. Since the
manufacturing activities
become a routine
function
(6) Supervising
difficulties
Much Less Quite less
(7) Material
handling
equipment
Mobile
Less mobile,
conveyors can also
be used
Built in types, wide
scope for mechanised
material handling
system e.g. conveyors,
over head rails etc.
(8) In process
inventories
High Relatively low
Low, since production
is continuous
(9) Unit cost of
item
High Less Quite less
(10) Prior
planning
Complex Easy Very easy
(11) Control Complex Easy Very easy
(12) Cycle time Long Relatively short Very short
(13) Balance of
load
Easier, Flexibility if one
machine is under repair
another machine can be used
Relatively difficult
Very difficult because
of perfect balancing of
the production line
(14) Job
instructions
Complex and in details as
the job changes every time
Few job instructions
when the product of
another lot begins
Only at the out set of
new job. Once the
instructions are given it
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becomes a routine.
(15) Investment
in machine and
equipment
As the machines are
arranged in process layout
few machines are needed.
Investment in machines is
less
Investment in
machines
comparatively more
High investment in
machines since there
may be duplication of
machine for each
production line
(16) Changes in
machine set up
Every job is different hence
every time new set up is
necessary
New set up is
necessary when the
batch changes
Set up to machines
remains unchanged for
a larger period since
standard products are
manufactured in a
continuous flow.
QUESTIONS
1. Define the term Production Planning and Control. State its objectives.
2. Explain the relationship between Production Planning and Control.
3. Describe the functions of production planning and control in brief.
4. Define the terms (i) Production (ii) Planning (iii) Control. Explain how they are
related with each other.
5. Define Routing. Explain the routing procedure in brief.
6. Explain how the routing differs in job order, intermittent and continuous
production systems.
7. Describe 'Route Sheet' with suitable example.
8. What is Scheduling? How does it differ from loading? State the objectives of
Scheduling.
9. Define Scheduling. Describe the factors affecting Scheduling.
10. What is machine loading? What are its objectives ?
11. What is dispatching? State the various activities of dispatching. in brief.
12. Differentiate between "Centralised dispatching" and "Dis-centralised
dispatching".
13. Define production control. Explain its importance.
14. Describe the follow up or control phase of PPC.
15. State the advantages of better production planning and control.
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16. State the principles of sound production control system.
17. Name the various types of production systems and explain the production on
system suitable for job work.
18. Differentiate between "Job order production" and "Batch Production" systems.
19. What is job order production? State its characteristics.
20. Explain the Batch production system. State its characteristics.
21. Explain continuous production. How does it differ from job order production?
22. Define continuous production system. Differentiate between Mass production
and Flow production.
23. Explain the following terms in brief(any four):
(i) Routing (ii) Loading
(iii) Scheduling (iv) Dispatching
(v) Route sheet (vi) Machine loading.
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4.5.4 ROUTING OR OPERATION LAYOUT
All the above information is to be presented in a format known as route sheet
or operation layout. This is a very important document during production. The most
important information to be presented in route sheet is:
(i) Every transfer of material to be shown,
(ii) Every work center and the operation to be done on that work center, tools used,
speed, depth of cut to be used and the time to be taken should be shown.
(iii) Any inspection to be done separately (not during operation), should be clearly
shown.
In general, in large production shops where the same products are
manufacture on and on, standard route sheets are printed and released with each
production order. In case of any important information is to be given to worker that
is separately marked with different colour ink on the standard route sheet to draw the
attention of the worker.
4.5.5. OPERATION PLANNING
Here details of each operation are planned. That means each operation is
divided into work elements. This is the lowest level in planning that is operation
level planning. Here the planner has to think of the posture in which the worker
works at the work center, workers hand movements are to be considered and
instructions are to be given to worker to follow the same, so that labour productivity
is maintained at optimal level. For this the production planner can use his knowledge
of method study or can take the help of Industrial Engineering department.
4.5.6. PLANNING OF AN ASSEMBLY
Planning of an assembly follows lines similar to those described above for
component or part. Again the planner has to recognize all the elements involved,
combine them into operations, decide the work stations to be used and choose the
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ideal sequence of operations.
In most of the component production tasks, considered so far, there are three
principal physical entities involved. They are mateial, labor and plant/machinery.
The most common arrangement of these entities in component production is one in
which the labor and plant are placed at fixed position and the material will flow
through the system to under to desired changes. Assembly planning differs from
component production in that the assembly it self, as it passes from one operation to
another, forms the fourth physical entity, and one of the assembly planners main job
is to decide, which these four item should move and which is given fixed position to
complete the product. What ever may be the method, the planner use, important thing
he has to see that the assembly line is perfectly balanced. Otherwise incomplete jobs
will come out of the assembly line. In the following passage let us consider the
method used for assembly line balancing. The balanced assembly line is shown on a
drawing, generally known as line of balance (LOB)
4.6. LINE OF BALANCE (LOB) (OR LINE BALANCING)
The term Assembly line balancing is associated with the schedule of
production line jobs that balances the work load of each work station so that each of
the worker on the production line has to carry out more or less equal amount of work
The output of assembly line is dictated by the largest station time which becomes
invariably cycle time of the line. The first step is to divide the whole work into
elements and list them sequentially along with the time required to complete the
element and group the tasks/elements, which have to be performed into balanced
work assignments. The objective is to group the tasks so that the output rate of each
work station meets, as closely as possible without exceeding, the time available for
working on each unit, this procedure minimizes that workers and equipment needed
to operate the line at the desired rate. This process of grouping the tasks/elements is
known as line balancing.
All work must be identified and broken down in to elemental tasks. These later
are the minimal units of work, which cannot be further divided without the resulting
division requiring significantly longer time to perform than the whole. Drilling a
hole, for example, would be considered an elemental task here. If the hole were
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started on one drill press and completed an another, additional time would be
required to withdraw the first drill and remove the part from the press, to position the
part on the second press, and to advanced this drill to where it makes contact with
the part-all the unnecessary activities, could be avoided if the task were completed
on one machine.
Once all the elemental tasks are identified, the precedence table and precedence
diagram are to be drawn. When writing precedence table, the factor to be
remembered is, the restrictions involved in doing a task also to be presented against
the task. Now by means of some illustrated examples, let us discuss the methods
used for balancing the line.
4.6.1. Heuristic Method
Heuristic means searching to find out. That is to find out (discover) things for
one self. Heuristic describes a particular approach to problem solving, decision-
making and control. Heuristic are often simple, thumb rule that are used to solve
complex problems. They help to provide ways to solves problems while at the same
time beginning of an investigation, avoid rigorous logical analysis. Heuristic models
utilize common sense, logic, and more than all experience and commonsense to
tackle new problems. Heuristic methods, though, have little, if any, theoretical, yet
they provide most likely (though not optimal) solutions, which are good enough from
a practical point of view. Though we have many methods, we use Heuristic method
for intermittent flow production system.
Steps to be followed in Heuristic Method:
(a) Identify the work (job/task).
(b) Break down the work into elemental tasks or steps.
(c) List the various elements along with their precedence relationship or logical
relationships and the time required.
(d) Sketch the precedence diagram.
(e) Consider the highest time element in the table. This time will become cycle
time.
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(f) Add up all the elemental times and find the total time.
(g) Divide the total time by cycle time to get the number of work stations required.
(h) Assign task to stations or group the elements, so that each group is considered
as a station. Here, we must take care to see that the precedence relationship is
not violated. Also total time of all the elements in a group does not exceed
cycle time.
Problem 4.3: There are nine elements in completing a job. The precedence
relationship and the time required (in minutes) to complete each element is given in
the table. Draw LOB.
Steps or elemental tasks Immediate predecessor
Duration of the element in
minutes
1 3
2 4
3 1 2
4 2 5
5 3 4
6 5 8
7 4 2
8 6 4
9 8 6
Total: 38 minutes
Solution: Total time = 38 minutes
Highest time in the table = 8 minutes. Hence cycle time = 8 min. (Note: you
can consider any higher number than highest time element as cycle time. But cycle
time cannot be less than the greatest time element in the table). This is because, as
the element takes 8 minutes, unless this element is completed, the job cannot be
finished. If you consider any other number grater than highest element, we can
proceed for a solution. But how much to take and what are the consequences, if we
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select very large number will be explained after the solution of the problem.
(a) First we shall consider what happens if we take cycle time = total time. The
line diagram will be as shown I figure 4.4 for the given problem.
Idle time compared
to total time in 35 34 36 33 34 30 36 34 32
Minutes 1 2 3 4 5 6 7 8 9 Output
Time in Min 3 4 2 5 4 8 2 4 6
Idle time in 5 4 6 3 4 0 6 4 2
Min .compared
to cycle time 8 minutes
Figure 4.4: Line diagram for the problem.
There are nine persons on the line, one for each station. Worker on station
number 6 works for 8 min., compared to this the idle time for other workers are
shown in the figure. Now for every 38 minutes one job is completed. Compared to
the total time, idle time of each worker is also shown in the figure. If we consider
that the span of working day as 8 hours,
This is to say that 12.6 jobs will be completed per day with nine workers on the
line.
We see that most of the time the workers are idle and the organisation has o
pay for the idle time. Hence the labour productivity is very low and the product cost
is high.
Suppose, we group the elements in such a way that the total time of the group
does not exceed cycle time (grouping should be done without violating the
precedence relationship given), we will get a better-balanced line. Figure 4.5 shows
the precedence diagram.
The figure 4.7 shows the line of balance for cycle time = 8 minutes. Here we
have 6 stations. Station V has idle time of 4 minutes and station VI has 2 minutes of
idle time. Stations II and I have idle time of 1 minute each. Station III has idle time
of 2 minutes. Idle time of station IV is zero minutes.
Daily productivity = (860)/8 = 60 units per day (with 6 workers only). As we
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see uneven idle time, the line is not perfectly balanced. The uneven idle time may
lead to number of labor problems. ]
Solutions ii. We shall try to write a LOB with a cycle time = 10 minutes.
Figures 4.8 and 4.9 shows the grouping of elements and the line of balance
respectively.
Total time = 38 min
Cycle time 10 min
Taking 8 hour working day, daily producitivity = 48 jobs per day
There are four stations and idle times at station II and I are I minute each.
Hence the line is better balanced.
In case we try the same problem with cycle time as 12 minutes, then also we
get an unbalanced line, with too much of variation in station idle times. While
selecting cycle time and grouping of items, the following points are to be
remembered. (Reader may try the same problem with cycle time as 13 minutes and
see what is the results.).
Depending upon the desired production rate of the line, the cycle time (CT) or
the time between the completions of tow successive assemblies can be determined.
This dictates the conveyor speed in the assembly line or the time allocated to each
operator to complete his share of work on a manual line. The individual work
elements or tasks are then grouped into work stations such that:
(i) The station time (ST), which is the sum of the times of work elements
performed at the station and should not exceed the cycle time (CT).
(ii) The procedure restrictions implied by the precedence diagram are not violated.
There are many possible ways to group these tasks keeping the above
restrictions in mind, we can use line efficiency (LE), Balance delay (BD), and
smoothness index (SI) to measure how good or bad a particular grouping is. This is
explained below:
(a) Line Efficiency (LE) This is the ratio of total station time to the product of
cycle time and the number of workstations.
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Where ST
j
= station time of station j., K = Total number of stations and CT = Cycle
time.
In the examples solved above cycle time = 10 min. Hence
= 0.95, hence line efficiency = 95%
(b) Balance Delay (BD)This is the measure of the time efficiency and is the total
idle time of all stations as a percentage of total available working time of all
stations.
For the solved example,
Balance delay = 100LE as a percentage, Here it is 10095 = 5%
c) Smoothness Index This is an index to indicate the relative smoothness of a
given assembly line balance. A smoothness indeed of zero (=0) indicates
perfect balance. This is given by:
It may be noted that in designing an assembly line the number of work
stations, K cannot exceed the total number of elements, N. (In fact K is an integer
such that 1 K N). Also the cycle time is greater than or equal to the maximum
time of any work element and less than the total of work element times at that
station.
Where, T
j
= Time of work element i, N = Total number of work elements,
T
max
= Maximum work element time and CT = Cycle time.
There is yet no satisfactory methodology, which guarantees an optimal solution
for all assembly line balancing problem. The emphasis has been on the use of
heuristic method that can obtain a fairly good line balanced for the given problem.
4.6.2. Kilbridge and Wester Method of Balancing Assembly Line
Kilbridge and Wester propose this method. Here numbers are assigned to
each operation describing how may predecessors it has. Operations with the lowest
predecessor number are assigned first to the workstations. The steps to be followed
in this method are explained by means of an example.
Example 4.4: A task having 12 work elements and their logical relationship and
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time (in seconds) taken is given in the table below. Draw the line of balance.
Element No. Predecessor element Time in seconds
1 5
2 1 3
3 2 4
4 1 3
5 4 6
6 3,5 5
7 6 2
8 7 6
9 6 1
10 6 4
11 10 4
12 8,9,11 7
Total time 50 seconds
Solutions:
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Step 1. Construct the precedence diagram (4.9) where, i = element number, j =
time in seconds.
Step.2 In precedence diagram identify the element which do not have
predecessors (does not follow other element) and enclose in a column and number
that column as I. Next identify the elements those immediately follow the element in
column I and enclose them in column number II. Similarly in column III enclose all
elements that follow the elements in column number II. Continue this procedure until
all elements are enclosed in columns. The element in the last column will not have
any more elements to follow. By so constructing the columns, the elements with in a
column can be assigned to works stations in any order, provided all the elements of
the previous column have been assigned. At the same time we should not violate
precedence order.
Step 3. Select a feasible cycle time (CT). By a feasible time mean one for
which T
max
CT Tj.
Step 4. Assign work elements to the station, such that the sum of elemental
times at a station does not exceed the cycle time, CT. This assignment precedes from
column I to II and so on, braking intra column ties using the criterion of minimum
number of predecessors.
Step 5. Delete the assigned elements from the total number of work elements
and repeat the above step until all the elements are assigned.
Step 6. If the station time exceeds the cycle time, due to the inclusion of a
certain work element, this work element should be assigned to the next station.
Repeat steps 4 to 6 until all elements are assigned to work stations.
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In the given problem there are 12 elements. They are arranged to columns as
shown in figure 4.6. The same is given in the table 4.6 given below.
Table 4.6: Showing arrangement of elements in the columns.
Elements 1 2,4 3,5 6 7,9,10 8,11 12
Columns I II III IV V VI VII
Let us take cycle time (CT) = 10 seconds. Let us count the number of
predecessor for each work element and record in table 4.7. Work element is selected
firs because it has no predecessors (or least number of predecessors). So we assign
element to station number I. Either element 2 or 4 each of which has an operation
time of 3 seconds, can be assigned to station I, which results in a station time of 8
seconds, which is less than cycle time (=10 seconds). If we allocate element 2 to
station I, element 4 cannot be allocated to station I, as station time will be greater
than cycle time. Allocating the element 4 to station II and continue on the same
logic, until all elements are allocated, the allocation will be as shown in Table 4.7
and Figure 4.11.
Table 4.7 Number of predecessors for each element
Work element (i) Number of Predecessors Time (T
j
) in seconds
1 0 5
2 1 3
3 2 4
4 1 3
5 2 5
6 5 5
7 7 1
8 7 6
9 6 1
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10 6 4
11 7 4
12 11 7
Table 4.8 Assignment of Work element to stations.
Station
number
Element (i)
Time Ti in
seconds
Station time in
seconds
Idle time in
seconds (cycle
time =10 sec.)
I 1,2 5+3 8 2
II 4,5 3+6 9 1
III 3,6 4+5 9 1
IV 7,9,10 2+1+4 7 3
V 8,11 6+4 10 0
VI 12 7 7 3
Line Effie icy =
Balance delay = BD = 10083.3 = 16.7%
Smoothening index =
As the solution obtained above is not an optimal because smoothening index is
4.89. Now let use take cycle time = 9 seconds and balance the line. The allocation
will be as shown in table 4.9.
Table 4.9. Allocations of elements to stations with cycle time = 9 seconds
Station Elements T
i
in seconds
Stations time
in seconds
Idle time when
CT = 9 sec.
I 1,2 5+3 8 1
II 4,5 3+6 9 0
III 3,6 4+5 9 0
IV 7,8 2+6 8 1
V 10,11 4+4 8 1
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VI 9,12 1+7 8 1
Line efficiency =
Smoothening Index
This should cause no concern, for the Kilbridge and Waster method. As the
method is heuristic method, which gives us a good working solution, with little
computational effort.
4.7 HELGESON AND BIRNIE METHOD
This method is also known as ranked positional weight technique. The
procedure of this method is as follows:
STEPS:
(1) Develop a precedence diagram
(2) Determine the positional weight for each work element. A positional weight of
an operation corresponds to the time of the longest path from the beginning of
the operation through the remainder of the network.
(3) Rank the work elements based on the positional weight in step 2. The work
element with the highest positional weight is ranked first.
(4) Proceed to assign work elements to the workstations where elements of the
highest positional weight and rank are assigned first.
(5) If at any workstation additional time remains after assignment of an operation,
assign the next succeeding ranked operation to the workstation, as long as the
operation does not violate the precedence relationship and the station time does
not exceed the cycle time.
(6) Repeat steps 4 and 5 until all elements are assigned to the workstations.
Solution to problem No.4.4 by Helgeson and Birnie Method:
Let us have cycle times 10 seconds. The precedence diagram is shown in
figure 4.8. Let us construct a table of positional weights of elements. This is shown
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in table 4.10.
Table 4.10 Positional weights of elements.
Element 1 2 3 4 5 6 7 8 9 10 11 12
Positional
weight
(PW)
34 27 24 29 26 20 15 13 8 15 11 7
For example, the positional weight of operation number 6 equals to the
maximum of (5 + 2 + 6 + 7), (5 + 1 + 7) and (5 + 4 + 4 + 7) that is 20. Since there are
three paths, namely 6 7 8 12, 6 9 12 and 6 10 11 12, from the
concerned operation to the end of the network.
If we take the element number, 1, there are four paths. They are:
12 8 7 6 3 2 1, 12 11 10 6 5 4 1, 12 9 6 3 2 1
and 12 9 6 5 4 1
The times for these paths are 32, 25, 27 and seconds. Hence 34 is taken as the
positional weight. In this way the positional weights of other elements are calculated
and tabulated. Table 4.11 shows the allocation of elements to workstations.
Table 4.11: Allocation of element to workstations
Station
Number
Element (i)
Time (Ti) (In
seconds)
Station Time
(In seconds)
Idle time in
(Seconds)
I 1,4 5 + 3 8 2
II 2,5 3 + 6 9 1
III 3, 6 4 = 5 9 1
IV 7,10 2 + 4 6 4
V 8, 11 6 + 4 10 0
VI 9, 12 1 = 7 8 2
Line efficiency
Balance delay
Smoothness index
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Because of higher smoothness index the solution is not optimal. Reader can try
to draw LOB with cycle time = 9 seconds. (We will get a better solution)
4.8 SOME PROBLEMS ONE WILL COME ACROSS IN MASS
PRODUCTION AND ASSEMBLY LINES
4.8 1Variable Work Element Times
While dealing with line of balance, it was assumed if the work element times
are constant. In practice these times may be varying randomly due to factors
like human variability, fatigue or carelessness on the operators part. Even in
case of machine operations, the set up time or positioning time of the part or
components could lead to random variations in the individual work element
times. Since the assembly line is balanced for a given fixed set of work
elements times, the effect of these variability are of two fold.
(i) Greater idle time at some workstations, and (ii) Reduction of the average
production rate of the line.
In designing lines for random work element times with given means and
variances, some modification of the deterministic line balancing methods are adopted
utilizing the additional criterion, that the probability of the station time exceeding the
cycle time would be kept as low as possible. Elsayed and Boucher discuss some
methods of probabilistic assembly line balancing.
4.8.2. Breakdown at work stations
The mass production system consists of a number of stages in series at which
some operations are being performed. A failure (or) breakdown of one stage or
workstations will results in failure of the entire production system until repairs are
completed. The result of this is deceased production rate. This can be conveniently
handled by providing:
(a) Efficient maintenance service so that the breakdown units are repaired and put
into service as soon as possible.
(b) Buffer storage of semi finished goods between each pair of stages, so that
entire line does not stop due to failure of one or more units.
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The question of how much buffer storage to allocate between stages is of
great practical importance, because, a higher buffer stock means greater tied up
capital and a lower risk of run out and subsequent line stoppage due to break downs.
A lower buffer stock leads to high probability of line shut downs.
The decision to estimate the size of the buffer can be governed by one or more
of the following criteria, which consider as to what is the buffer size that:
(a) Maximize the production rate of the system
(b) Minimize the total production cost and
(c) Maximizes the availability of the production system
The problem could in general be viewed as a Multistage waiting line system as
shown in the Figure 4.11 For details refer to Elsayed and Boucher.
4.8.3. Multi Product Lines
One of the major disadvantages with assembly lines is their relative
inflexibility. A line is usually designed for one product and changes in design of the
product are often difficult to accommodate on the line, unless suitable adjustments
are made at workstations. But when similar products, in which a large percentage of
the tasks are common, have to be manufactured, the possibility of the same
production facility for the products can be explored. Since tasks are fixed with in
stations, one balanced, it should be apparent that the station times and line
efficiencies will very with he products being produced. A great variety in these
efficiencies might dictate that separate lines be utilized. In case a multi-product line
is to be assigned for which a common precedence diagram must be developed. For
example precedence diagram for two products is shown in figure 4.12. For a cycle
time of 10 units of time (say seconds or minutes) the optimum solution is shown in
figure 4.13. Here the line efficiencies are 73% and 100% for products 1 and 2
respectively. A computer assisted approach for multi-product and Bedworth and
Bailey deals stochastic line balancing. Loss of efficiency over single product line but
gain in equipment efficiencies is the trade off that must be evaluated in the mixed
product line balancing problems.
4.9. LINER PROGRAMMING METHOD FOR LINE BALANCING
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Linear Programming method can be used for balancing the line. This is
explained by means of an example.
Example 4.5: A job has 6 elements and the duration of each element is given
below. Draw the line of balance.
Element 1 2 3 4 5 6
Predecessor 1 1,2 3 4,5
Time in
seconds
4 6 5 3 3 7
Solution: Total time for the job is 28 seconds. Let us take the cycle time as 10
seconds. Then the number of stations required is given by:
Number of stations= say approximately 3 numbers. Maximum number of
workstations = 6, which is equals to number of elements in the problem.
Now we have to workout for exact number of workstations required and the
allocation of elements to the workstations. Let us write the inequalities and the
constraints, namely constraints for the cycle time, task (element) constraints and
precedence constraints.
ASSUMPTIONS:
i = represents ith element, where i is 1,2,3.....N, where N is the maximum
number of elements.(Here N = 6).
J = Represent j the workstation, where j is 1,2,3...WS
max
, being the
maximum number of workstations.
t
i
= time required to finish i th element.
Decision variables X
ij
is equals to 1, if the element i is assigned to station j
and is equals to zero, if the element i is assigned to the workstation other than j.
(i) Cycle time constraint: Cycle time constraint restricts the number of elements
which can be assigned to a work station, such that the total station time should
not exceed cycle time. t
i
X
ij
C, where C = cycle time assumed. And j =
1,2,3...WS
max
for the given example.
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4X
11
+ 6X
21
+ 5X
31
+ 3X
41
+ 7X
61
10
4X
12
+ 6X
22
+ 5X
32
+ 3X
42
+ 3X
52
+ 7X
62
10
4X
13
+ 6X
23
+ 5X
33
+ 3X
43
+ 3X
53
+ 7X
63
10
4X
14
+ 6X
24
+ 5X
34
+ 6X
44
+ 3X
54
+ 7X
64
10
4X
15
+ 6X
25
+ 5X
35
+ 6X
45
+ 3X
55
+ 5X
65
10
4X
16
+ 6X
26
+ 5X
36
+ 6X
46
+ 3X
56
+ 7X
66
1 0
(ii) Element (task) constraint: Element constraint makes certain that an element is
assigned to one station only.
X
ij
= 1 where i; is 1,2,3....N (N = 6) for the given example
X
11
+ X
12
+ X
13
+ X
14
+ X
15
+ X
16
= 1 (for task is assigned to station)
X
21
+ X
22
+ X
23
+ X
24
+ X
25
+ X
26
= 1
X
31
+ X
32
+ X
33
+ X
34
+ X
35
+ X
36
= 1
X
41
+ X
42
+ X
43
+ X
44
+ X
45
+ X
46
= 1
X
51
+ X
52
+ X
53
+ X
54
+ X
55
+ X
56
= 1
X
61
+ X
62
+ X
63
+ X
64
+ X
65
+ X
66
= 1
(iii) Precedence constraint: Referring to the precedence diagram 4.15 the element
number 3 follows the element 1, thus X
31
X
11
. If element 1 is assigned to
work station 1, then the decision variable X
11
=1 and if element 3 is not
assigned to workstation 1, then X
31
= 0, since 0 1, X
31
X
11
is permitted.
Other precedence relationship can be written as:
X
32
X
11
+ X
12
This indicates that element 3 can be allocated to station 2 only after the
predecessor element 1 has been assigned to either station 1 or to station 2.
Similarly,
X
33
X
11
+ X
12
+ X
13
...............................
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...............................
X
56
X
31
+ X
32
+ X
33
+ X
34
+ X
35
+ X
36
.........................................
.......................................
X
66
X
41
+ X
42
+ X
43
+ X
44
+ X
45
+ X
46
Objective Function: The objective is to push the last element into earlier
workstations in order to reduce the number of workstations from 6 to 3 (as
calculated earlier). This can be achieved by specifying the objective function as:
Minimize Z = 1 (X
54
+ X
64
) + 10 (X
55
+ X
65
) + 100 (X
56
+ X
66
)
Where the assignment of final elements i.e., element 5 and 6 to last few stations
has been made much more costly than their assignment to earlier stations. Elements 5
and 6 are pushed into comparatively earlier workstations and last three workstations
(i.e.4,5 and 6) have been considered for the purpose.
Out objective function is
Minimize Z = 1 (X
54
+ X
64
) + 10 (X
55
+ X
65
) + 100 (X
56
+X
66
)
X
54
means, element 5 has been kept at workstation 4
X
55
means, element 5 has been kept at workstation 5
X
56
means, element 5 has been kept at workstation 6
It can be inferred from objective function that the cost of keeping element 5
at workstation 6 is 10 times the cost of keeping the same at workstation 5 and 100
times the cost of keeping the same element 5 at workstation 4, and similar is the case
for element 6. MODULE-4
4.10 MODULAR PRODUCTIN AND GROUP TECHNOLOGY
One criticism of manually operated assembly lines has been that they reduced
the worker to mere cog in a machine. In spite of specialization, he becomes more
mechanical and get bored due to monotony and will get tired as time elapses. It has
been found valuable to enlarge the scope of the work of the worker, so that he
assembles a complete module, which in turn may be used on an assembly line to
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assemble a product or a number of different products sharing that particular module.
This job enrichment results in greater ob satisfaction for the operator by reducing the
monotony of the job and giving the operator a sense of accomplishment for
assembling a complete module. In modular production as we tend to specialize in the
production of a particular parts or activities that can then be included as components
of more than one product or service. The reason for wanting to achieve such
commonality is that one part or operation, if used in several products or services, can
accumulate sufficient demand volume to warrant investment in a flow shop.
Group Technology provides another aspect of the same basic idea. It refers to
specialization in families of similar parts. Hence components requiring primarily
turning operation, such as shafts are collected in one group. Components requiring
surface grinding and drilling operations such as plates are assigned to a different
group. These groups become the basis on which a traditional plant layout can be
arranged into a group technology plant layout in which machines are arranged in
such away that, each machine is assigned to the production of only one group of
parts. Group Technology (GT) typically affects only component manufacture, not the
assembly stage production.
4.11 AUTOMATION AND ROBOTICS
Mass production has been assisted to a large extent by automation and
robotics in recent years. Automation refers generally to the bringing together of three
basic items of production i.e., machine tools, materials handling and controls. Often a
considerable amount of time is spent to load machine and unload work and to convey
it between the single operation machines. This restriction has been partly relived by
development of the multi spindle machines. With these machines, a single motor
driving several spindles through a gear train allows multiple operations to be
performed by one machine. Machining time cycles does not change, but more
machinery operations can be performed with in each cycle. And a single operator can
perform several machining operations on one machine. This considerably reduces the
set up time and materials handling time and results in reduction of production cost.
Another trend with automation has been the use of industrial robots to perform
some of the functions that were earlier done by manual operators.
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An industrial robot is a programmable, multifunction manipulator designed to
move material, parts, tools or specialized devices through variable programmed
motions for the performance of variety of tasks. What separates an industrial robot
from other types of automation is the fact that it can be reprogrammed for different
applications; hence a robot falls under the title of flexible automation, as opposed
to hard or dedicated automation.
Industrial robot composes three basic components. They are:
(a) The manipulator (or arm), which has a series of mechanical linkages and joints
capable of movement in various directions to perform the work task.
(b) The controller, which actually directs the movements and operations performed
by manipulator. The controller may be an integral part of the manipulator or
may be housed in a separate cabinet.
(c) The power source, which provides energy to the actuators on the arm. The
power source may be electrical or a combination.
Major reasons for the use of robot in industry are: (a) Increased productivity,
(b) Adoptability (c) Safety, (d) Ease of Training, (e) Good return on investment
and (f) Greater reliability. Robots are used in industry in following operations:
Welding, Drilling, Assembly, Inspection, Materials handling, Machine loading,
Die-casting and many more.
Dispatching
Definition:
The literal meaning of the term is sending to destination or starting something
on its way. When applied to production control, it means assignment of work to
definite machines or workplaces which involves issue of orders and production forms
in order of their priority as determined by scheduling. In fact dispatching translates
the planning into physical work or reality.
Duties of dispatcher
(i) Movement of material from stores to the first process, and from process to
process.
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(ii) Issue of tool orders instructing the tool department to collect and make ready
tools, jigs and fixtures in advance of the time at which the operation will
commence.
(iii) Issue of job order authorizing operations, in avoidance with date and time
previously planned and entered on loading charts, route sheets and progress
control sheets or boards.
(iv) Issue of time tickets, drawing, instruction cards and other necessary
information to individual personnel performing the work.
(v) Issue of inspection orders after each operation to determine the result in
number of pieces good and bad and the cause of spoilage.
(vi) Issue of more orders and collection of time tickets, drawings and instruction
cards for all completed operations.
(vii) Recording time of beginning and completing jobs and calculating duration
forwarding complete records to production dept. and time card to payroll
department.
(viii) Recording and reporting idle time of machines and operators.
Forms used in dispatching
(a) Work orders- While starting the production, work orders are issued to
commence the desired lot of products.
(b) Time cards Each operator is supplied with this card in which he mentions the
time taken by each operation and other necessary informations. These cards
are helpful for the wage payments.
(c) Inspection Tickets These tickets are sent to the inspection department which
shows the quality of work required and stages at which inspection is to be
carried out. Afterwards these are returned with the inspection report and the
quantity rejected.
(d) More tickets These tickets are used for authorizing over the movement of the
material from store to shops and from operation to operation.
(e) Tool and equipment tickets It authorizes the tool department that tools, jigs
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and fixture and other required equipments be issued to shops.
The production control not only concerned with passive assessment of the
plant performance but is an active function; which operate like an automatic self
regulating mechanism that registers events and reacts to them by adjusting relevant
parameters in the production centers, also the production controller can learn lessons
from the mistake committed while planning and control and rectify himself not to
commit the same in future.
6.2. STAGES AND ACTIVITES OF CONTROL
Control begins as soon as the production operations begin; in fact slightly
earlier, by the actual issues of the production orders to the shop floor. The four of
production control are:
1. Trigging off production operations; observing progress and recording it.
2. Analyzing the data by comparing progress with the plans and with
achievements of competitors.
3. Taking immediate action to modify plans and redirect activities in order to
attain the target.
4. Post-operation evaluation, feeding back information and conclusions to the
planning section in order to improve future planning.
Each of these stages is important, each is a link in the control procedure, but
each is worthless and indeed pointless without the others. There is no need to make
observations and collect data if they are not being used for analysis. Any analysis is
equally pointless if its results are disregarded, and when corrective action is
undertaken but confined to immediate patching up, the control procedure lacks the
vital feedback that is possible only after evaluation, and without which the system is
deprived of the opportunity of learning from mistakes and experience.
The function of program planning is concerned with the planning of what the
factory shall make in terms of products and times. This broad plan is broken down at
the ordering stage into instructions to departments in terms of batches of components
and is concerned with the planning of work operations on individual work centers.
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This activity of disseminating information is known as dispatching.
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Table 6.1: Elements of control procedure
Particulars Process Inventory Inspection Cost
Observation 1. Active Process:
Output vs Time
2. Idele Process:
Machine idle
time; break downs
Records of
stock level
Process
control charts
Collect
cost data
Analysis Compare
progress
with plans
Distribution of
demand, trend,
seasonal
fluctuations
Process
capabilities,
trends
Compute
cost and
compare
with
estimates
Immediate
action
Expedite Issue
production
and
procurement
orders
Initiate 100%
inspection
adjust
processes
Adjust
sales price
if possible
Evaluation Process
Capacity
maintenance
schedules
Replenishment
policies,
inventory
systems
Reassessment
of
specifications,
process
improvement
inspection
procedure
Economic
evaluation
of
processes
preparing
better data
for future
estimates
The function of program planning is concerned with the planning of what the
factory shall make in terms of products and time. This broad plan is broken down at
the ordering stage into instruction to departments in terms of batches of components
and time. Dispatching is t he final process in this analysis of the program and is
concerned with the planning of wok operations at individual work centers.
This activity of disseminating information to the production department to start
production is known as Dispatching. This stage where scheduling or planning ends
and production starts. Once the production activities are started, control starts. In
small departments dispatching is done by foreman or other line manager concerned
normally carries out as a function, which as a part-time job. In large departments,
particularly, if they are equipped with general purpose machinery, if they are laid out
on a process (functional) layout, and if they carry out large number of different
operations there is too much detailed clerical work involved in controlling the orders
for it to be done as a part-time job by the foreman, and a specialist dispatcher is
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usually appointed for this purpose.
6.3. DUTIES OF A DISPATCHER
Dispatching has been defined as a general control of shop orders in production
shops, the different parts of the job can be listed as follows:
(i) The receipt and filling of all of Shop Orders and associated documents.
(ii) The selection of job for issues, in the most favourable sequence.
(iii) The issue of Job Cards or other forms of instruction to the operatives.
(iv) The issue of instructions to the setup workers, concerning what machines are to
be set-up- for which jobs.
(v) The issue of instruction concerning the movement of materials between work
centers.
(vi) The issue of instructions concerning the issue and return to stores of special
tooling.
(vii) Maintenance of records of production.
All these different jobs are normally controlled form a Dispatchers office,
located near that of the foreman and equipped with a desk at a window or hatch, at
which the operatives report to receive instructions concerning which job they are to
do next.
Occasionally the dispatching duties are split between a number of different
people. For example, a time clerk dealing with the actual issue of Job Cards and the
maintenance of time and quantity records, without any responsibility for scheduling
the order of work, or for material and tool movement.
The dispatcher, in this case, is a member of the Foremans staff. In many
organizations the dispatcher in each shop are part of Production control staff and
report directly to the Production controller.
6.4 THE COMPLEXITY OF DISPATCHING
The dispatching jobs listed in the above section are required only in the
complex cases of jobbing and batch production, on general-purpose machinery,
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which are laid out as per process layout. In the line production dispatching is very
simple, because the operator normally do the same jobs all the time, and there are no
special component shop orders, material movement, set ups or tool moves to be
organized. In line production it is only in the assembly shops that dispatching can be
complicated. In case of Group lay outs, where jobbing and batch production is
carried out the dispatching tends to be simple. It is because in-group layout a group
of machines are set in as a group and they are tooled to do specific similar of jobs
(family of products) by using special tooling designed for minimum set up. Using
period batch control or standard batch control and a group of incentive scheme with
this type of layout, dispatching paper work can be reduced to the absolute minimum.
The complexity of dispatching is mainly a function of layout, and of organization.
Figure 6.1 gives the duties and documents of dispatching.
Various documents to be prepared by dispatcher in batch production (on
functional layout) are:
(i) A Shop Order for each component,
(ii) A copy order known as Due-date copy,
(iii) A Material Requisition
(iv) A Follow card
(v) A Progress record card,
(vi) A job card, one for each operation
(vii) A Material Move Order for each operation
(viii) Tool Move Order for each operation
If the product is made of several parts, the production order is broken down
accordingly, and for each operation there is a material and tool issue, a job card that
details the task and the methods to be used, an inspection order and information
about the next destination of the component. Finally the dispatching function is
responsible for keeping records of actual operation times, idle man and machine
times, length and causes of breakdowns, and any other relevant information about
reality keeping within schedule or deviating from it. These records can be used for:
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(i) Calculating wages, if the wage scheme in the plant is depended on output
(ii) Examining the cost of the job and the product and comparing with the planned
budget and the initial cost estimates,
(iii) Comparing operation times with the estimated times and verifying whether the
discrepancies are consistent with past experience, so that future estimates can
be made more accurate,
(iv) Locating weak points in the production line, so that work-study can be
undertaken to explore ways of alleviating the difficulties,
(v) Studying how much idle time was caused because of schedule interference i.e.
overlap in operation times due to uncontrollable delays or too tight a
production schedule,
(vi) Studying how much delay was caused by machine breakdown and whether the
maintenance and emergency repair facilities were compatible with the
requirements of the situation, (to find optimal number of repair men required to
install preventive maintenance scheme),
(vii) Analyzing the delays caused by tool breakdown, regrinding and resetting, to
ensure that the specified speeds are compatible with reasonable amount of tool
wear,
(viii) Analyzing to what extent both queues and delays are cause by inadequate
materials handling systems.
One thing we have to remember is that the exercising the dispatching
function depends very much on the type of production and on the size of the plant.
The dispatching effort, after releasing the orders, would then be mainly devoted to
maintaining the records, and this can be done effectively by dispatching stations
located along the production line, each being responsible for recording progress at
production centers.
6.5. AIMS OF DISPATCHING
Earlier it is mentioned that the dispatcher should select a most favorable
sequence of jobs while issuing for production. That is the sequence, which takes less
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through put time. For this the dispatcher has to follow three principles, they are:
1. Principle of completion: by due date: This aim states that all jobs are to be
completed by due-date. Here the dispatcher has to consider factors like
available load on hand and available capacity and release orders for production
such that all orders are completed by due date.
2. Principle of Minimum throughput time: Taking into consideration the setup
time, production time and breakdown times, power offs etc, the dispatcher
should see that the total time required to process an order is put at minimum.
3. Minimum Setting-up time: When work centers are used in proper sequence to
do the jobs, say for example that with a single set-up, different jobs requiring
the same tool can be done at a time so as to avoid different set up time for each
job when they are done at different point of time.
All the above three concentrates on optimal utilization of the plant, which is the
ultimate goal of Production Planning and Control.
6.6 DISPATCHING SYSTEMS
Mainly there are two types of dispatching. They are:
6.6.1 Due date Sequence filing
In due date sequence filing each order form is filed in a work center file, In
the section allocated to the work center on which the next outstanding operation is to
be carried out. If there are number of order forms in the same work center section of
the file they filed therein in due date order. Broadly speaking, the jobs for each work
center are selected from the file for loading, in their due date sequence, those with
the earliest due date being issued first. Where the different machines used in
processing are normally loaded in the same sequence, and there is little risk of both
starting and finishing operations being loaded on the same machines, then final due
date can be used for filing. If, however, there is any risk that, say, the last operation
on a short job will be planned on a machine before the fist operation on a long job-
because it has a slightly earlier final due date-then the dispatcher will have to set an
arbitrary due date for each operation on every order received, and use these operation
due dated for filing. It is easy to operate this system, but the disadvantage is if fails to
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take into consideration savings possible in setting up time if like jobs are scheduled
to follow each other and it makes close planning i.e. the starting of one operation
before the previous one is finished, which is difficult to arrange. As soon as the
operation/job is over the operator after punching the finishing time on the job card,
hand over the card to the Dispatcher and who in turn give the card for another
operation.
As each operation is over, the Dispatcher does the following work:
(i) Moves the order in the work center file to the section reserved for the work
center for the following operation.
(ii) Issue a move ticket for the movement of the materials to the next machine.
(iii) Enters particulars on the progress copy and on the daily plan of the quantity
completed.
6.6.2 Dispatching With Operation Scheduling
On receipt of the order and associated documents the first work done by the
dispatcher is to load the different operations on the chart against the appropriate work
center. The advantage of this method is it gives a good visual indication of the load
ahead and of progress achieved and that it enables close scheduling to be practiced,
thus giving higher throughput rates than are possible by due date sequence filing.
6.7 DOCUMENTS MAINTAINED BY DISPATCHING DEPARTMENT
Let us discuss here regarding the various documents that are maintained by
Dispatching department. The documents mentioned below are important among
many more, we find in real world situations. Some times we find that few of the
documents discussed below may be used in production shops. Some times more
details are involved in the proforma given in this section depending on the need of
the company, which uses the document. Some times some of the information given
in the documents given here might have been eliminated. The proforms discussed in
this section has academic orientation rather than practical approach.
OPERATION / RPITE SHEET
Part No................. No.
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Name:................... Drawing No......
Material with specification:............ Part Drawing:
Quantity:...............
.
Issue date:...........
Routing
Dept.
Machine
Operation Description Material
handling
Tools Jigs &
fixtures Time
Set
up
Operation
Prepared by: Checked by: Date: Head of P.P.C.
dept.
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TECHNOLOGICAL ROUTE CARD
Department/Shop ..................... Order No...... No.../.....
Job No. Assembly/Machine No...
Material:........ Quantity:.......Weight per piece:......Kg. Drawing No:............................
Date of issue:.......................Standard time:..................Hrs.................................... Mins.
Time
Operation
total No.
Description
of
operation
Machine
&
& its No
Special
Instruments
&
Feed
cut/mm
Speed
m/min
Depth
of cut
mm
Finish
size
mm
Tools
&
Jigs
Set
up
Opern.
time
Technologist Checked by: Date:................................
JOB CARD (SIDE : A) No:.../....
Company:........... Job Card No........ Part No:.......
Shop:.............. Drawing No:......
Name of the Job: .......... Quantity/sets:..... Total Sets:........
Material type:........ (Cast/Forged/Rolled/Machined)
Gross Weight/piece: kg.
Net Weight/piece ....... Total
Quantity:........
Scheduled time Actual time
Start Finish Start finish
Operation
number
Descri
-ption
of
operati
on
Set
up
time
in
sec
Operation
time in
sec
Date Time Data Time Date Time Date Time
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Machine No... Incentive Group No:.... Total time allowed for quantity....Hours
Card location:.... Previous operation.... Next operation.......
Rate setter:... Date ......... Checked by......... Planner.......
(Job Card: Side 1)
JOB CARD : SIDE - B
Delay greater than 30 mins Inspection
From
To Lost
hours
Code
Delays Code
Quantity
passed
Quantity
Rejected
Signature
of
Inspector
1. No. Drawing D
2. No.Material M
3. Breakdown B
4. No. Crane C
5. No. Tool T
6. No.gage G
7. Operator Idele I
8.
9.
10.
Rejection due to
Man Material Drawing
Inspection Report:
Remarks:...........................................................................
.............................................................................................................................................................
(Job Card: Side 2)
MOVE CARD No:.../....
Move Card No:.... ..Part No:......Order No:.........Quantity:........... Date:.......................
Moving facility: Loco/Truck/Fork lifter/Trolley/Crane/Man
Origin Department:.........................Machine No........................Bay No:............
Destination Department:............. Machine No:......... Bay No.:......................
Moving facility Number:................ Moved By:........................
Foreman:.................................. Date:................ Time:...................
MOVE CARD
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INSPECTION CARD No:..../......
Inspection Branch:....................... Order No:................. Part No:......
Type of Inspection:.............. Changed to:.................. Date:........
Quantity Material Number passed Number rejected Number scrapped
Causes of rejection:
............................................................................................................................................................
............................................................................................................................................................
Description:..........................................................................................................................................
..............................................................................................................................................................
Inspector:........................... Date: ............................
INPOECTION CARD
6.7.1. Route Card
This document has many names, such as Technological Route Sheet, Route
card etc., These cards are prepared by process engineers, who have a knowledge of
process and facility available and physical changes required in the material to get the
final shape. This card indicates the details of operations that are to be carried out in
the production shop in order to prepare the product. This will help the operator to
decide the sequence of operations that have to be carried out, tools he has to use,
cutting speeds, feed and depth of cut (for the parts to be machined), next machines to
be used and also materials being used and how they are handled. Technological card
differ with shops and are prepared in the way they feel it convenient and useful,
some times, some sketches are also made for explaining the operator about the job.
For routine jobs, printed route cards are prepared and will be supplied to the
production shop, when a fresh batch is started. In case due to the demand in the
market, any small changes is made on the product, this is indicated on the printed
route sheet by different color ink to draw the attention of the worker. When the
component is one, which is purchased and supplied for assembly, then an entry is
made in the route sheet, that the component is purchased component, which indicates
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that it is to be indented form stores. Present day mass production shops and batch
production shops uses computerized route sheets.
6.7.2. Job Card
Job card is prepared by dispatching section with an idea to book the labour
involved in each operation. The idea is to fill in the time spent by an operator on each
operation. Number of job cards is equal to the number of operations to be performed
in a shop. The information includes part details, operator number, and quantity to
produce, time allowed, inspection report and destination of the component after the
last operation.
Some of the features of a job card may be given in other cards, if used, for
example: Time ticket, work ticket, Inspection card and move card etc. In such a case,
only the required information is filled in. Before release of work card or job card, it
is date stamped. If it is used as an authority to withdraw tools, jigs etc., When order
is finished, it is again date stamped and other passing through the planning
department, to signal the completion of operation, it is available for costs and pay
roll work.
6.7.3. Inspection Card
In this card the details of inspection are noted. Out of total produced quantity,
how many are rejected, how many are passed, reasons for rejecting, precautions to be
taken in future to reduce/avoid defective components are noted in this card. This will
give information to the quality control department. If a separate inspection card is
used, it is sent to planning department to signal the completion of the job and time or
work card is sent directly to the pay roll department. Inspection card helps planning
department to help the department of take decisions regarding replacement or repair
of faulty components.
6.7.4. Move Card
Move cards are often used, where he transport problem/handling problem
justifies their use. For example, Steel Plants, Power Plants and Automobile Units
uses move card for handling the components. In case, a check on material handling
persons time is desired to calculate his pay, provision is made on the move card to
not the time taken to move the materials. In small units, this card is combined with
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inspection cared or job card.
Generally five sets are prepared each set containing a job card, a route card, a
move card and an inspection card. The first set is retained by the dispatching
department, second copy is tied to the first material entering the production shop (or
to the container/trolley/or a material handling equipment carrying the material), third
copy is given to the follow-up engineer, fourth copy individually given to concerned
departments, and the final copy is given to costing department.
PART: 8 - EXPEDITING OR FOLLOW UP OR PROGRESSING
Follow-up is that part of the production control function which go round the
production shop and compares the actual performance with the production plan and
prepares a report, which will be submitted to the line managers, who in turn will see
that the variations mentioned in the report are corrected and will not repeat in future.
The main purpose of this progressing is to see that a feed back is sent to the
production shop and to the production planning department to give warning
regarding deviations from the production plans. The activities of expediting are:
(i) The recording of the actual production,
(ii) The comparison of actual production with planned production.
(iii) Measurement of the deviation and identify the causes of deviation
(iv) Make arrangements of correcting the small deviations by taking the help of
shop floor manager
(v) Reporting of all excessive deviations to the authorities responsible for
executing the plans, as planned.
6.8. TYPES OF FOLLOW-UP
There are five types of important follow-up procedures, they are:
1. Program control: Here the actual production output is compared with the
production program, in case of sales, compare actual sales with the sales
program and report the deviations to the line managers to take necessary steps
in order to avoid such deviations in future.
2. Order Progressing: Here the due dates of production orders and purchase
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orders are compared with their actual completion dates or material received
date. In case any over due is noticed, it is immediately reported to the line
managers to see that thee corrective action is taken.
3. Shortage Chasing: Here actual available materials at workstations are
compared with the required quantity of martial. In case any shortages are
found, to report and make immediate arrangements to supply the required
material in order to avoid stoppage of production. While sending feedback, a
detailed report is made regarding this shortage of material to the line managers
so as to enable them to take corrective action~.
4. Daily plan progressing. This is the control used at the third level of production
control, to see that the daily plans made during dispatching are achieved or not.
In case the plans are not achieved to the required extent, the reasons are noted
and sent in feedback to the management.
5. Departmental progress control: Here the departmental performance is measured
with the targeted production plans with actual achievement by the department
and a report is prepared regarding the efficiency of the department, in order to
help line managers to take corrective action.
Program control
There are many different ways in which production output can be recorded
and compared with production plan. Three different types of methods are discussed
below:
I. Cantt! charts: Gantt chart used in scheduling and loading also in expediting
the progress of production. the American engineer, Henry L. Gantt, originates this
chart, and consists of a simple rectangular grid, divided by a series of parallel
horizontal and vertical lines, as shown in the figure number 6.1.
Plant Monday Tuesday Wednesday Thursday Friday Saturday
No. Description
1. Turning on
lathe (No.L
201)
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2. Rough
drilling
(No.D 108)
3. Reaming
(No.R 105)
4. Tap
Figure 6.1: Gantt Chart
The vertical lines always divide the horizontal lines into units of time. The
scale units can be years, months, weeks, days, hours or minutes according to the need
for which the chart is used. The horizontal line divides the chart into sections, which
can be used to represent either work tasks (in work schedules) or work centers (in
load charts). When chart shows only work tasks i.e. products, orders, or operations to
be completed, it is known as Work Schedule. When it shows these tasks opposite to
work centers at which they are to be produced say for example factories,
departments, workshops, machine tools or man, then the chart is known as Load
Chart.
The units scheduled or loaded on these charts are always the same; they are
work tasks, which generally have a known standard time, so that the time from start
to finish of each is known. These tasks may be products or parts, to be made, or work
operations to be carried out in the course of manufacture.
6.8.2. Symbols Used in Gantt Chart
Either numbers or special symbols can represent the work task on the chart.
When numbers are used in the production and sales program, the number shown in
the space represents the number of units to be produced in that particular time
intervals. But, most of the times, in scheduling and loading charts special symbols
used to indicate the job to be completed in t1}e planned time interval. The symbols
used to represent ,work task on the chart vary from company to company. Here the
symbols discussed are academic in nature and most commonly used. One of the
important features of Gantt chart is that it can be used to schedule the tasks and also
can be used to record the progress of the work. Progress is recorded by drawing a
thick line on the legs in the table. Provisions are made to show set up time, time
saved and time lost. One draw back of the chart is that, in case the job is not
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M\CS TIME
M\CA
M\CB
M\eC
Figure 6.2 :
completed in the prescribed time due to some trouble, to reschedule it else where
when the facility is idle is very difficult. For this, whole chart is to be redrawn. To
overcome this defect, control boards have been devised. These control boards are
provided with slots than the lines on the chart. In these slots, a card cut to size of the
time interval and with job details drawn on it is inserted. When we look at the board,
we see number -of cards inserted on the chart. As and when one particular job is
over, that card is removed and another job in sequence is allocated to the facility. To
know the progress, a thread is fixed on the frames of the board and this thread is
pulled to the required time and the progress of each job is noted along the thread and
recorded. When the job is half the way and due to some difficulty it could not be
continued, then the card is removed and inserted again when the facility becomes
idle. Control boards are very useful and convenient for scheduling and loading. It is
very common that one can see a control board in a modern production shops.
Advantages gained in control boards are: Sliding of the cards is very easy and quick
when compared to redrawing a chart. When there is a change in the plan it is a
relatively simple job to reposition the cards in the sliding holder. If there in any gain
or loss of time in plan for any particular work center can be resynchronized, by
sliding the holder itself to the right or left, without !TI0ving the cards themselves in
the holder.
Another type of control board is also available, where the cards are fitted into
overlapping card pockets, with transparent lips. Each card is cut to the length
representing the standard time of the job concerned. When all the job pockets are
hanging down the board has the appearance of a Gantt chart. If details are required
about any scheduled item, turning back the top cardholder and reading the
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information from the card in the pocket concerned can find them.
3. 'z' Chart
nother method of program control is by the use of Z Charts. These charts
show actual output at a required period of time (at the end of a week or at the end of
a month. Etc.,) along with cumulative output from the beginning of the year or period
and moving totals at the same time interval. (Figure 6.4). Z charts can be used to
show both the plan and the performance, and deviation from the plan by blocking in
the gap between two curves
6.8.4. Tabulated Records
The plan, performance and deviation can be neatly tabulated instead of chart
symbols, so that everyone can understand clearly. To conclude, follow up or
expediting procedure requires recognition of delays, evaluation of its consequents
and action to remove its causes or at least minimize their effects. Expediting function
consists in keeping a watch on the flow of material and whenever any trouble occurs
expediter locate the source of trouble and take action to remove it. A more advanced
form of expediting attempts to prevent trouble by setting up check points along the
way to start expediting if the job does not get through the check point operation on
the scheduled date. A common practice is to employ persons to trace work through
the plant and to report on its progress.
Suppose an expeditor observes or learns from the progress charts that a batch
of components have failed to arrive at a certain production center on the date
scheduled, he proceeds to investigate the cause, and to decide the way he can put
things right. If the difficulties arise through ambiguities or misunderstanding of the
instructions in the production order, the expeditor should clarify the points. If he IS
unable to solve the problem on his own, he turns to planning department for
assistance. Expeditors are concerned only with keeping up of schedules and with
flow of materials; they are also given responsibility of moving the semi-finished
components to the next workstation. They are not asked to do lengthy studies of
intricate cause and effect systems. They are neither trained nor they have enough
patience and requisite qualification required for such analysis. They can contribute to
such analysis by providing up to date facts, they should also be told of any
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conclusions, after the study is completed.
The basic problem of follow up is that of how much follow up on goods in
process is necessary. Theoretically, if routing, scheduling and dispatching have been
properly done, no follow up is necessary. The reporting of progressing may be done
periodically (daily, weekly or monthly). Some times, in routing work, when the
assistance is needed from the control department and, if necessary, reporting may be
done of progress to the higher ups, This type of reporting may be done by
interdepartmental telephones or in person or in writing etc.
It is difficult to know where dispatching ends and where expediting starts.
But each (me is told about their respective duties by planning section. In general
dispatching records events, expediting tries to adjust them wherever necessary.
For a teacher, who teachers Production Operations Management, t~
management students, it will be difficult to make the students to understand the
subject matter with technical examples. This is because; the management class will
have heterogeneous mix of students from various disciplines, which does not have
any technical background. It is easy to talk about operations like turning, milling and
drilling etc., and routing, scheduling, assembly line balancing and so on to technical
students. But in a management class, when examples given from production field,
students feel it very difficult to follow. Hence many a time the teacher has to go
down to some examples, which are domestic in nature, or examples, with which the
students familiar, so as to enable them to follow what they are learning. Hence, I am
discussing an example, with which students are very much familiar to make them to
understand what are routing, scheduling loading and other terms.
Take the example of education system. The University will announce about
the courses, which are offered and announces the date of entrance examination, date
of results of entrance examinations, date of comme:1cement of courses and date of
end examinations and the date of commencement of next semester. This
announcement will give the overall picture of activities of university in the academic
year and is known as master plan or master schedule.
Master Schedule of a university for tile year 2000-2001
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S.
No.
Course Date of
entrance
exam
Date of
EE
results
Date of
admission
s
Date of
comme-
ncement
Date of
1
semeste
r exam
Date of
results of
1 Sem
results
Date of
comme II
Sem.
1. B.A. 10, May 2, June 10, June 1, July 4, Dec. 26,Dec. 1 Jan.2001
2. B.Com 08, May 26 May 06, June 1, July. 4, Dec. 26, Dec. 1, Jan.
2001
3. B.Sc. 06, May 24,
May
06, June 1, July 4, Dec. 26, Dec. 1, Jan.
2001
etc.
Once the above master schedule is released, the examination department,
affiliated colleges will start planning their work. The examination department will
prepare detailed schedule showing when the question papers of the entrance
examinations to be prepared, when the applications are to be received and when the
examination schedule to be informed to the candidates, when the evaluation of
papers are to be started and completed and see that the results are announced on the
specified date.
Similarly affiliated colleges will prepare the timetables and allocate loads to
the staff members. Here the subject is a job and the contents of the syllabus of the
subject are the load (hours required to complete the syllabus). Teacher is the facility.
Depending one the available hours of a staff member he is loaded with one or two
subjects, by taking into consideration the available number of working days (here
loss of working days due to public holidays, and other reasons are taken into
consideration). Here a time table is a schedule when it is prepared to show which
subject will be taught in which period of the day. When the same is prepared with
respect to teacher it will be known a load sheet. The head of the institution or a
department will see that the class are going on smoothly and the syllabus of the
subjects are being completed uniformly is con i .::red as the control. The head of
institution may go round the classes to see that no class is left id e and this is follow
up. Considering the subjects prescribed for first semester and second semester and so
on, care is taken to see that the student who completes the first semester, will be in a
position to follow the second semester subjects and those who pass the second
semester will follow third semester subjects. This can be considered a routing.
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QUESTIONS
1. Discuss in brief the elements of control.
2. Explain the duties of a dispatcher.
3. Give the names of various documents maintained by dispatching department and
give the specimen of the document, which shows how, the material move during
manufacture,
4. Write a short notes on Gantt chart.
5. Explain the symbols used in Gantt chart.
6. What are control boards, discuss how they are used.
7. What is expediting? Why is it necessary in production control?
SEQUENCING - The selection of an appropriate order for a series of jobs to
be done on a finite number of facilities is called sequencing.
Assumptions:
1) No machine can process more than one operation at a time
2) Each operation once started must be performed till completion
3) There is only one of each type of machine
4) A job is processed as soon as possible subject to ordering requirements.
5) Time required to transfer jobs between machines is negligible.
6) Time intervals for processing are independent of the order in which operation
are performed.
7) All jobs are known and are ready to start processing before the period under
consideration begins.
I. Processing n jobs through two machines
Consider a problem consisting of two machines A and B and each job is
processed in the order AB. Let the expected processing time be A
1
,A
2
,A
3
,....An,B
1
,
B
2
, B
3
....Bn are known. Solution procedure adopted by Johnson (1954) is as follows:-
Step 1: Select the least processing time occurring in the list of time A
1
,A
2
.....An and
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B
1
, B
2
...Bn and if there is a tie, either of the smallest processing time should be
selected.
Step 2: If the least time is An, select n
th
job first. If it is Bm, select m
th
job last . (as
the given order AB)
Step 3: There are now n-1 jobs left. Repeat step 1 and 2 to the remaining jobs.
Continue till all jobs have been ordered. The resulting order will minimise the
elapsed time T.
Step 4: Find the total processing time as per the sequence and also determine the idle
time.
II Processing n jobs through 3 machines
Consider a problem consisting of 3 machines M
1
, M
2
and M
3
. Each job has to
go through three machines in the order M
1
, M
2
and M
3
. The conditions to be satisfied
in order to solve the problem by Johnsons method:-
1. The smallest processing time on machine M
1
largest processing time on
machine M
2
.
2. The smallest processing time on machine M
3
largest processing time on
mahcine M
2
.
Step 1: Convert the three machine problem into two machine problem by introducing
two fictitious machines G and H.
Gi = M
1
i + M
2
i
Hi = M
2
i + M
3
i, i = 1,2,3....n
Step 2 : Once the problem is converted to n job 2 machine, the sequence is
determined using Johnsons algorithm for n jobs and 2 machines.
Step 3: For the optional sequence determined find out the minimum total clapsed
time and idle times associated with machines.
III Processing n jobs through m machines
Let us assume that we have a problem in which there are n jobs to be
processed through m machines M
1
, M
2
.....Mm in the order M
1
, M
2
....Mm. Let Tij
denote the time taken by the j
th
job on the i
th
machine.
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Step 1: Find (i) Mm Tij (Minimum time for the first machine)
(ii) Min Tmj (Minimum time on the last machine)
(iii) Maximum time on intermediate machines
ie, Max (T
2
j, T
3
j,....T(
m1
)j)
Step 2:Check for the following conditions
(i) Min Tij Max Tij (ii) Min Tmj Max Tij
ie, minimum processing time on the machines M
1
and Mm should be
Max time on any of the 2 to (m1) machines.
Step 3: If the conditions in step II are not satisfied, the problem cannot be solved by
solved by this method, and otherwise go to next step.
Step 4: Convert n job n machine problem into n job 2 machine problem considering
two fictitious machines G and H.
T Gj = Tij + T
2
j + ..... + T
(m1)
J
T Hj = T
2
j + T
3
j + ..... + Tmj
Step 5: Now obtain the sequence for n jobs using Johnsons Algorithm.
Step 6: Determine the minimum total elapsed time and idle time associated with
machies.
Problems:
Case 1: n Jobs: 2 Machine
(1) Five jobs are to be processed on two machines M
1
and M
2
is the order M
1
M
2
processing time is given below:
Job Processing time (hrs)
Machine M1 Machine M2
1 5 2
2 1 6
3 9 7
4 3 8
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5 10 4
Determine (1) Sequence that minimises the total elapsed time (24352)
(2) Total elapsed time and idle time on M
2
if any (30 hrs, 2 hrs)
(2) There are seven jobs which are to be pressed first on Machine I and then on
Machine II. Processing time in hours are given below:
Job A B C D E F G
Machine I 6 24 30 12 20 22 18
Machine II 16 20 20 13 24 02 06
Find the optimal sequence and total elapsed time. Compute idle time on M/c II (ADE
C BGF, 134 hrs, 33hrs)
Case 2: n Jobs: 3 machines
3) Case 2: Seven jobs are to be processed through 3 machines M
1
, M
2
and M
3
. The
processing times are given in hrs. Find the optimal sequence of jobs. Find the
minimum total elapsed time and Idle time on M
2
and M
3
.
Jobs M
1
M
2
M
3
A 3 4 6
B 8 3 7
C 7 2 5
D 4 5 11
E 9 1 5
F 8 4 6
G 7 3 12
(ADGFBCE, 59hrs, 25hrs, 7hrs)
4. We have five jobs, each of which must go through m/cs A, B and C in the order
ABC processing time (in hrs) is as follows: Find the optimal sequence, total
clasped time and idle time.
M/c A
M/c B
Job
1 2 3 4 5
8 10 6 7 11
5 6 2 3 4
4 9 8 6 5
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M/c C
(32514, 51 hrs, A-9, B-31hrs, C-19)
Case 3: n Jobs: m Machines
5. Jobs each of which must be processed on the machine M
1
, M
2
...M
6
. The
processing time in his are given
(i) Find the optimal sequence (ii) Minimum total clasped time
(iii) Idle time associated with machines (if any)
Job
A
B
C
D
Processing time
M
1
M
2
M
3
M
4
M
5
M
6
18 8 7 2 10 25
17 6 9 6 8 19
11 5 8 5 7 15
20 4 3 4 8 12
(CABD, 112 hrs)
More Exercises
1. Find the sequence that minimises the total clasped time required to complete
the following on two machines. Also find the total clasped time and idle time if
any on machine I and II.
Job A B C D E F G H I
Machine I 2 5 4 9 6 8 7 5 4
Machine II 6 8 7 4 3 9 3 8 11

PALMERS HEVRISTIC
Palmer proposed a heuristic to minimise the make span measure. He mainly
proposed a slope index Sj is shown below.
Sj = (m 1) tjm + (m3) t
jm1
+ (m2 + ...... (m3) tj
2
(m1) tj
1
where n is the
number of machines.
Procedure:
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Step 1: Computer slope for each job
Step 2: Arrange the jobs as per the decreasing order of slopes.
Problem: Consider the following flow shop scheduling problem:
Job Processing time
M/c 1 M/c 2 M/c 3
1 3 4 10
2 11 1 5
3 7 9 13
4 10 12 2
Checking the conditions for Johnson;s method
Smallest processing time on M/c 1 largest processing time on M/c 2
smallest processing time on M/c 3 largest processing time on M/c 2
ie, condt 1: 3 12 (not satisfied)
condt 2: 2 12 (not satisfied)
Application of Palmers Hensistic. In this problem, number of M/c = 3
S
1
= (31) t
13
+ (33) t
12
+ (35) t
11
= 210 + 0 4 + (2) 3 = 14
S
2
= (31) t
23
+ (33) t
22
+ (35) t
21
= 2 5+01+(2) 11= 12
S3 = (31) t
33
+ (33) t
3
2 + (35) t
31
= 213 + 0 9 + (2) 7 = 12
S4 = (31) t
43
+ (33) t
42
+ (35) t
41
= 22+012 + (2)10 = 16
Arranging the slopes in the decreasing order S
1
>S
3
>S
2
>S
4
The final sequence is
1324
Priority Sequencing
Priority sequence rules are applied to all jobs waiting in the queue. Then
when the work centre becomes open for the job, the job with highest priority is
assigned. Priority sequencing is a systematic procedure for assigning priorities to
waiting jobs thereby determining the sequence in which the jobs will be performed.
Priority sequencing rules:
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1. First come first served (FCFS)
2. Earliest due date (EDD)
3. Shortest processing time (SPT)
4. Least slack (LS)
5. Longest processing time (LPT)
6. Referred customer order (PCO)
1. The processing times for five jobs and their due dates are given for a single
machine scheduling below:
Job 1 2 3 4 5
Processing
time (in hrs)
9 7 5 11 6
Due date(in
days)
16 20 25 15 40
a) Determine the sequence b) Total completion time c) Avg. completion time
d) Avg. number of jobs in the system and average job lateness using the following
priority sequencing rule.
(i) SPT (ii) EDD (iii) LPT
e) Compare the above characteristics for the three sequencing rules.
Ans. (i) Shortest Processing Time (SPT) sequence
As per this rule, the job with shortest processing time is scheduled first and
immediately followed by next lowest processing time and so on.
Job Sequence 3 5 2 1 4
Process time 5 6 7 9 11 38 days
Flow time 5 11 18 27 38 99
Due data 25 40 20 16 15
Job lateness 0 0 0 11 23 34
Various characteristics are:-
(i) Total completion time = 38 days
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(ii) Avg. completion time
(iii) Avg. no of jobs in the system
(iv) Avg. job lateness
(ii) Earliest Due Date rule:
As per this rule, priority is given to the job with earliest due date. Arranging
the jobs as per EDD, sequence is 41235
Job sequence
Processing
time
Flow time Due date
Job lateness
(days)
4 11 11 15 0
1 9 20 16 4
2 7 27 20 7
3 5 32 25 7
5 6 38 40 0
Total 38 128 18
Various characteristics are
(i) Total completion days = 38
(ii) Avg. completion time
(iii) Avg. no of jobs in the system
(iv) Avg. job lateness
(iii) Longest processing time Rule:-
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Job sequence
Processing
time
Flow time Due date Job lateness
4 11 11 15 0
1 9 20 16 4
2 7 27 20 7
5 6 33 40 0
3 5 38 25 13
38 129 24
Characteristics
(i) Total completion time = 38
(ii) Avg. completion time
(iii) Avg. no of jobs in the system
(iv) Avg. job lateness =
Comparison of priority rules
Rule
Total
completion
time
Avg.
Completion
time
Avg. No. of
jobs in the
system
Avg. job
lateness
SPT 38 19.8 2.61 38
25.6 38 25.6 3.37 3.6
LPT 38 25.8 3.39 4.8
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Materials Management
The materials which are required for the production purposes are normally procured
and stored in raw materials ware houses and then they are shifted to manufacturing
plants if an organisation has a number of plants. Even otherwise, the raw materials
are to be purchased in advance and stocked in stores mainly to smoothen the
production process. Each functional head of materials department will try to optimize
the operation of his own function. But all of them should aim for a common goal of
providing materials with minimum total cost for better functioning of the
organisation.
The different functions of materials management are materials planning, purchasing,
receiving, stores, inventory control, scrap and surplus disposal. If these systems are
designed to function independently, there wont be close coordination among them.
But we need complete integration of these functions for better operation of the
system. the integrated materials management will result in the following advantages:
Better accountability
Better coordination
Better peformace
Adaptability to computerized systems
Components of Integrated Materials Management
Materials Planning: Sales forecasting and aggregate planning are the basic inputs
for materials planning. The different tasks under planning are:
Estimating the individual requirements of parts
Preparing materials budget
Forecasting the levels of inventories
Scheduling the orders
Monitoring the performance in relation to production and sales.
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Inventory control: This includes
ABC Analysis
Fixing EOQ
Lead time analysis
Setting safety stock & reorder level.
Purchase management: The tasks under purchasing are listed below
Evaluating and rating suppliers
Selection of suppliers
Finalization of terms of purchase
Placement of purchase orders
Follow up
Approval of payments to suppliers
Stores management: The different tasks under stores are listed below
Physical control of materials
Preservation of stores
Minimization of obsolescence and damage through handling
Disposal and efficient handling
Maintenance of stores records
Proper location and stocking of materials
Reconciling the materials with book figures.
Inventory control:
It is essential to provide flexibility in operating a system. the inventory can be
classified into raw materials inventory in process inventory and finished goods
inventory. The raw materials inventory remove dependency between suppliers
and plants. The work in process inventories remove dependency between
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machines of a product line. The finished goods inventory remove dependency
between plant and its customers /market.
Main functions:
Smoothing out irregularities in supply
Minimising the production cost
allowing organisations to cope with perishable materials.
Costs Trade off
If the order quantity is less the cost of order will be more, but the inventory
carrying cost will be less. On the other hand, if the order quantity is more, the
ordering cost will be less, but the carrying cost will be more. The total cost curve
represents the sum of ordering cost and carrying cost for each order size. The
order size at which the total cost is minimum is called EOQ.
Functions of materials management
1. Materials Planning:
This function involves the setting up of consumption standards for working
out the requirements for all materials for any given manufacturing programme;
deciding whether to make or buy, taking into consideration real economics of
manufacturing capacity, availability from outside sources, dependability of
suppleness and various other factors.
2. Scheduling:
Scheduling of the procurement of materials is order to meet the requirements of
manufacturing procurement lead times, manufacturing cycle times, availability or
scarcity of materials, economic lot size etc. This also involves the follow up of actual
deliveries against the schedules and taking special action for expediting incase of any
shortfall.
3. Inventory control:
Minimising the inventories while at the same time ensuring that stock-outs do not
occur and production will not suffer due to non-availability of any material. This
involves the classification of all items through an ABC analysis for selective control,
detailed analysis of lead times rejection rates, consumption rates, costs and other
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relevant factors to determine the safely, minimum, maximum levels and economic
order quantities.
4. Purchasing and subcontracting:
This refers to the locating and development of sources of supply, market research for
purchasing negotiating prices, calling for tenders, selection of suppliers, entering into
rate contract and periodical review of the same, issue of purchase orders with
specifications and delivery schedules etc.
A big establishment project like construction of highway, design, development and
marketing of new product etc can be spitted into small tasks with sequence of their
execution. The time required to complete each task can be estimated and it must be
finished by that time. This is known as work break down structure. The main
objective of doing so are to plan and manage resources resources required to
complete the project, to finish work within specified time, optimize the cost with
time.
MODULE-5
In most of the planning, scheduling and controlling the project, the network analysis
is used. Thus the main objective of network planning are:-
(a) To complete the project within the stipulated period
(b) To optimise resources utilization
(c) To establish better coordination in interdependent activities
P.E.R.T. (Programme Evaluation & Review Techniques) and C.P.M (critical path
method) are two methodologies to analyse the network.
P.E.R.T. PERT was first used in 1957 as a method of planning and controlling
the Polaris Missiles programme by Booz, Allen and Hamilton together with U.S.
Naval department. The aim was to finish the project two years in advance. It is
very important in the field of project management. It is commonly employed for
conducting the initial review of a project. It is a useful device for planning the
time and resources. PERT helps in decision making.
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After its becoming public property in 1959, producers also thought it to use to
its advantage that has disciplined approach to planning, scheduling, controlling
and monitoring the progress of variety of projects.
It is based on the assumption that operation time cannot be estimated
accurately, because the various uncertainties involved in the working, To take
these uncertainties into account, the P.E.R.T. uses the following three time
estimates.
(i) Optimistic time (to) (ii) Pessimistic
time (t
p
)
(iii) Most likely time (t
m
)
Network Analysis
Event:
Is a particular instant in time showing the end or beginning of an activity. It is a point
of accomplishment or decision. An activity is bounded by two events. The normal
symbol used to represent an event on the network is a circle, but for some specific
events other shapes can also be employed.
Events are generally represented by circles with event numbers written inside as
represented above.
For numbering the rules devised by D.R. Flukerson is generally adopted.
(a) An initial event is one which has arrows
coming out of it and none entering it. In any network there will be only one
such event.
(b) Delete all arrows emerging from 1. This
will create at least one more initial event.
(c) Number these new initial events as
2,3........
(d) Delete all emerging arrows from these
numbered events which will create new initial events.
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(e) Follow step (c)
(f) Continue until the last event is obtained
which has no arrows emerging from it.
(i) All events must be numbered
(ii) Same number cannot be used for more
than one event. This is necessary for identifying each activity.
(iii) Event cannot be numbered is any order
but usually forward numbering system is more familiar.
Activity- Represents efforts applied over a period of tine which has definite
beginning and end. They are generally represented by arrows with description and
time estimates written along.
The direction of the arrow indicates nearly the sequence in which the event occurs.
Network Logic- A network is basically a representation of a number of activities
with their inter-relationship while the program is under execution, it is necessary to
review the progress from time to time. The basic rules to be followed are:-
Activity arrows should be drawn from left to right indicating progressive
approach towards the ultimate objective or the final event.
Crossing of arrows should be avoided and they should be drawn as straight times
as far as possible.
Network Rules
(a) The length of the arrow bears no relationship to the time which the
activity takes or the resources which the activity consumer.
(b) The arrow identifies the logical conditions of dependency.
(c) The direction of the arrow indicates the direction of workflow. The
normal convention is from left to right.
(d) No event can be reached in a project before the activity which
immediately precedes it is completed, similarly no activity can be started until
the event which immediately precedes it has been reached.
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(e) Every activity in the network should be completed to reach the
objective or the end event.
(f) No set of activities can form a circular loop.
Activity on the arrow system (AOA)
b) Activity on the mode system (AON)
I.Draw a network for the simple project work of erection of steel works for
a shed.
Description Prerequisites
A Erect site workshop
B Fence the site
C Bend reinforcement A
D Dig foundation B
E Fabricate steel work A,C
F Install concrete plant B
G Place reinforcement C,D
H Concrete foundation G,F
I Paint steel work E
J Erect steel work H,I
K Give finishing touch J
2. In a program consisting of eleven activities the constraint determined
are as under. Draw the network.
A B A C A D
B E C F C G
D H E I F J
G K H K I L
J L K L
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Analysis of Network and computation of time estimates
Analysis of network calculate the following.
(i) Earliest and latest dates for events
(ii) Amount of slack time available on events
(iii) Earliest and latest start and earliest and latest finish dates
(iv) Amount of float time available on activities
(v) Critical path
(a) Earliest start time (EST) or Earliest Occurrence time (EOT)
It is the earliest possible time at which an event or activity can occur or start
after completing all its preceding activities.
(b) Earliest finish time (EFT)
It is the earliest possible time by which an activity is finished EFT = EST +
Activity time
(c) Latest Occurrence time/Latest start time (LST or LOT)
It is the latest time by which an event can start without affecting the total
project completion time.
LST = LFT activity time
(d) Latest Finish time (LFT)
It is the latest time by which on activity is completed without affecting the
total project completion time.
Float
It denotes the flexibility range within which the start time or finis time of an
activity can fluctuate. The time by which delay of its execution is possible is known
as activity float or slack. There are different types of floats as follows:
(a) Total Float (TF)
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It is the difference between LFT and EST of an activity. Generally we
observe that actual time required is less than the maximum time available for
completion of project. This difference or allowance is total float.
(b) Free float
It is the time by which the completion of an activity can be delayed beyond the
earliest finish time (EFT) without affecting the earliest start of a subsequent activity.
(EST)
ij
= EOT
i
(LST)
ij
= (LOT)
j
tij
(EFT)
ij
= EOTi + t
ij
(LFT)
ij
= (LOT)
j
TF = [(LOT)
j
(EOT)
i
]
tij
FF
ij
= [(EOT)
j
(EOT)
i
]tij (EST of fail event EST of head event dum)
IFij = [(EOT)
j
(LOT)
i
]t
ij
(EST of fail event LFT of head event dum)
(c) Independent float
It is the amount of time by which the start of an activity can be delayed
without affecting earliest start time of any immediately following activities assuming
that the preceding activity has finished at its latest finish time.
If the value of I.F. is negative, it is taken as zero for all practical purposes.
(d) Interfering float
It is the difference between total float and free float.
If all the above mentioned four floats of each activity lying on a path are zero that
path is confirmed as critical path, represented by double lines.
Slack of an event = (LFT EST) of that event
If the minimum value of slack is zero, such event is known as critical event. The path
joining the critical events is critical path.
PERT (Programme Evaluation & Review Technique)
In critical path method, we assumed deterministic estimates for time durations of
various activities in a project. But in reality, activity durations may be probabilistic.
Hence, probabilistic considerations are incorporated while obtaining time durations
of the activities in a project. The following time estimates are used:
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to optimistic time; tm-most likely time; tp pessimistic time
The optimistic time is a time estimate of execution goes extremely good. The
pessimistic time is a estimate if execution is normal.
Frequency Distribution of Time of Completion of an activity
Consider an activity which is repeated several times, its time of completion is noted
down every time. A curve drawn between time of completion of activity, taking it on
X-axis, and frequency of its occurrence, taken on Y-axis, is called frequency
distribution of time of completion. This type of distribution is called Beta distribution
curve. Standard deviation of this distribution can be determined by using a property
of normal distribution that is approximately 99.73% of all values lie within 3
limits from the mean of the distribution. A normal distribution becomes a Beta
distribution if it is showed towards left or right. The difference between the two
extreme values of Beta distribution is divided by 6 (3 on either side), its
standard deviation can be known to us. These two extreme values are to and tp.
p o
t t
6
varinance ( )
2
=
2
p o
t t
6
_

,
Expected time of an activity
Beta distribution of frequency of occurrence time of completion of an activity has
identified three time estimates. By combining these three estimates the average time
taken to complete an activity can be determined. This average time is called expected
time of completion of an activity (t
e
).
Probable positions of occurrence of most likely time in a Beta distribution are two at
tm
1
and tm
2
, however the positions of occurrence of t
o
and t
p
are one each. The
expected activity time is calculated as the weighted average of all three time
estimates, Mid point of Beta distribution is given half weight age as compared to the
points corresponding to most likely time.
Mid point of Beta distribution =
o p
t t
2
+
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Expected time =
( )
o p
m m
e
t t
t t
2
t
3
+
+ +

=
p m o
t 4t t
6
+ + _

,

Similarities between C.P.M. & P.E.R.T.
(1) Both methodologies are used for project planning and project
scheduling by developing and analyzing the network diagram of activities
obtained by splitting a project into smaller tasks.
(2) Rules for drawing network diagram for both are same
(3) Critical path is found in both cases
(4) Time and cost estimation is done in both cases.
Difference between C.P.M. & P.E.R.T.
(1) C.P.M. is activity oriented (1)
PER is event oriented
(2) It is deterministic approach (2) It
is probabilistic approach
(3) Crashing of activity is possible
to reduce the project completion time
(4) Find the critical path and project duration of the given project. Also
determine EST, EFT, LST, LFT along with TF, FF, IF, and interfering float in
a tabular form.
Acti
vity
Ti
m
e
(d
ay
s)
E
S
T
E
F
T
L
S
T
L
F
T
T
F
F
F
I
F
I
N
T
F
L 3 0 3 0 3 0 0 0
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M 4 0 4 8
1
2
8 8 8
N 9 3
1
2
3
1
2
0 0 0
O 3 3 6
1
2
1
5
9 0 9
P 3 6 9
1
5
1
8
9 9 0
Q 6
1
2
1
8
1
2
1
8
0 0 0
R 4
1
2
1
6
1
2
1
6
0 0 0
S 2
1
6
1
8
1
6
1
8
0 0 0
T 5
1
6
2
1
1
9
2
4
3 3 0
U 6
1
8
2
4
1
8
2
4
0 0 0
(5) A small maintenance project consists of the following 10 jobs, whose
precedence relationships are identified by their code numbers.
Job Initial code Final code Duration (days)
A 1 2 4
B 2 3 6
C 2 4 10
D 3 5 8
E 3 6 2
F 4 6 12
G 4 7 4
H 5 8 16
I 6 8 14
J 7 8 8
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(3) The activity details and their predecessors are given below along with
their activity times. Construct the network diagram. Find out the critical path.
Activity Predecessors Activity time (weeks)
A 4
B A 3
C A 2
D B 5
E B 3
F C,D 4
G E,F 3
Activity
Activi
ty
time
EST EFT LST LFT
Slack
A 4 0 4 0 4 0
B 3 4 7 4 7 0
C 2 4 6 10 12 6
D 5 7 12 7 12 0
E 3 7 10 13 16 6
F 4 12 16 12 16 0
G 3 16 19 16 19 0
Critical path = A B D F G
(a) Draw an arrow diagram representing the project
(b) Calculate the early and late start and finish times for each job
(c) How much slack job (3,5), job (4,6) and job (7,8) have?
(d) Which jobs are critical
(e) If job (2,3) were to take 12 days instead of six, how would the project
finish date be affected?
(f) Do any jobs have free slack? If so which ones and how much.
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Acti
vity
Dura
tion
EST EFT LST LFT
Slac
k
Free
slac
k
A 4 0 4 0 4 0 0
B 6 4 10 10 16 6 0
C 10 4 14 4 14 0 0
D 8 10 18 16 24 6 0
E 2 10 12 24 26 14 14
F 12 14 26 14 26 0 0
G 4 14 18 28 32 14 0
H 16 18 34 24 40 6 6
I 14 26 40 26 40 0 0
J 8 18 26 32 40 14 14
Since the job (2,3) activity B has a slack of 6 days, the project will not be effected by
the change in duration of B.
(6) A small project is composed of 10 activities whose time estimate are
listed below (a) Draw the project network and identify all path (b) Find the
expected duration and variance for each activity.
Activity
Optimistic time
(t
o
)
Most likely
time (t
m
)
Pessimistic
time (t
p
)
12 5 12 17
13 9 11 12
15 8 10 13
24 9 11 13
25 5 8 9
36 14 18 22
48 14 17 21
57 21 25 30
67 8 13 17
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78 6 9 12
Activity Expected duration Variance
12 11.67 4.00
13 10.83 0.25
15 10.17 0.69
24 11.00 0.44
25 7.67 0.44
36 18.00 1.78
48 17.17 1.36
57 25.17 2.25
67 12.83 2.25
78 9.00 1.00
(7) If the critical path of a project is 40 months long with a standard
deviation of 8 months, What is the probability that the project will be
completed within (a) 40 months (b) 36 months (c) 48 months
This is calculated as follows
S E
T T
P

When T
S
= Schedule time
T
E
= Expected time

= Standard deviation
(a) T
S
= 40, T
E
= 40
40 40
P 0
8

from table probability is 50%

(b) T
E
= 40, T
S
= 36 ie,
36 40
P 0.5
8

from table probability is

30.8%
(c) T
E
= 40, T
S
= 48 ie,
48 40
P 1
8

from table probability is 841%

8. One subcontractor is responsible for activity A and another contractor
for activity B. From their reputations. You estimate that activity A has 90%
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likelyhood of being completed on time and that 4 out of 5 times the contractor
B will complete his work on schedule.
(a) If activity C cannot begin until both A and B has been completed.
What is the probability of starting C.
(b) If activity C can start when either A or B has been completed, what is
the probability of starting C on the schedule date?
(a) P(C) = P(A) P(B)
(0.9) (0.8) = 0.72
(b) P(C) = P(A+P(B)P(A) P(B)
= 0.9 + 0.8 (0.9) (0.8) = 0.98
The probability of starting activity C on time is 0.98
(9) The interdependence of a job consisting of seven activities A to G is
given below
Activit
y
A B C D E F G
Precedi
ng
Activit
y
A B A B
C&
D
Succee
ding
Activit
y
C&
E
D&
F
G G
The time estimates in days for each activity are as follows:
Activity Time estimates
Normal
distribut
ion data
(Z) +
Probability
%
t
o
t
m
t
p
A 6 9 18
B 5 8 17 0.8 78.81
C 4 7 22 0.9 81.59
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D 4 7 16 1.0 84.13
E 4 7 10 1.1 86.43
F 2 5 8 1.2 88.49
G 4 10 22
Find out the probability of completing the project in 35 days.
10. Draw a critical path for the following net work. Calculate the
probability of meeting the schedule if the schedule time is 26 days.
Solution
Activ
ity
to tm tp
o m p
e
t 4t t
t
6
+ +

12 2 4 7 4.167 0.83
0.688
9
23 1 1 2 1.167 0.17
0.028
9
35 1 2 3 2.00 0.33
0.108
9
57 3 5 6 4.83 0.50 0.250
79 4 6 10 8.33 1.00 1.00
910 5 7 10 7.167 0.83
0.688
9
24 2 4 5 3.833 0.50 0.250
46 1 2 3 2.00 0.33
0.108
9
68 7 10 13 10.00 1.00 1.00
810 4 7 9 6.83 0.83
0.688
9
10
11
1 1 2 1.167 0.17
0.028
9
critical path is 1235791011 Duration = 28.828
Variance of the project = 0.6889 + 0.0289 + 0.1089 + 0.250 + 1.00 + 0.6889 +
0.0289
= 2.7945
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S.D. (

) = 2.7945 = 1.6717
Normal deviate
s e
t t
(Z)

=
26 29
1.6717

= 1.79
Probability of meeting the schedule is 3.5% (from probability table)
11. A project consists the following activities and different time
estimates
Activity Least time
Great time
(days)
Most likely
time (days)
12 3 15 6
13 2 14 5
14 6 30 12
25 2 8 5
26 5 17 11
36 3 15 6
47 3 27 9
57 1 7 4
67 2 8 5
(a) Draw the network
(b) Determine the expected task time
(c) Find the critical path
(d) What is the probability that the project will be completed by 27 days?
(c) Critical path is 147
Duration is 25 days.
(d)
Activity

( )
2

12 2 4
13 2 4
14 4 16
25 1 1
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26 2 4
36 2 4
47 4 16
57 1 1
67 1 1
Variance of project = 16 + 16 = 32

of project = 32 = 5.66
Z =
g e
t t

=
27 25
5.66

= + 0.353
probability % = 63.761 %
Introduction to PERT Cost
Cost is always associated with duration of an activity, and therefore a
project cost is a function of duration. In order to be able to take decision whether a
particular project is to be completed in 6 months or 8 months, the decision making
authority needs to know, in addition to other intangible things, two important things :
a) Direct Cost - The cost which can be charged to individual activities and
consist of direct Labour, material and equipment.
b) Indirect Cost - The cost which are related to control and direction of the
project and consist of financial overheads (interest, consultants and specialists
charges, cost of PERT during the project, supervision indirect material, labour)
These cost generally increase with duration.
It is assumed that for each activity, there is an activity duration for which
the direct cost is minimum. If activity results in more than this time, more resources
and hence more funds are required. For instance a point will be reached beyond
which no further reduction in time will be possible irrespective of the resources
spent. The time for the activity at minimum cost is called normal time and the
minimum time for the activity is called crash time. The costs associated with these
times is called normal and crash costs.
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Cost slope =
Crashcos t Normal cos t
Normal time Crash time

Procedure for crashing

The process of reducing the project duration is called crashing. The crashing
is at the cost of extra resources.
1. Construct the network diagram and find the critical path.
2. Calculate the cost slope for different activities.
3. Crashing the network - crashing the activities in critical paths as per
the ranking ie, the activity having lower cost slope would be crashed
first to the maximum possible extent.
4. Determine the total cost of the project.
P1. From the activity details given below. Determine the optimum project duration
and cost.
Normal Crash Cost slope
Activity Time Cost Time Cost
1-2
1-3
2-4
2-5
3-4
4-5
8
4
2
10
5
3
100
150
50
100
100
80
6
2
1
5
1
1
200
350
90
400
200
100
50
100
40
60
25
10
Indirect cost = Rs. 70/day
Activity Duration EST EFT LST LFT Slack Remarks
1-2 8 0 8 0 8 0 Critical
1-3 4 0 4 6 10 6
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2-4 2 8 10 13 15 5
2-5 10 8 18 8 18 0 Critical
3-4 5 4 9 10 15 6
4-5 3 10 13 15 18 5
Critical path : 1-2-5
Duration = 8 + 10 = 18 days
Direct cost of the project = 580/-
Indirect cost of the project = 18 70 = 1260/-
Total cost of the project = 1840/-
Instead of crashing all activities, only those, whose cost slope is less than
the indirect cost.
Step 1: Here both critical activities 1-2, 2-5 have cost slope less than
indirect cost.
The minimum cost slope is with 1-2, ie, Rs. 50/- and can be crashed by two
days.

Project duration = 16 days, while critical path remains unchanged

Direct cost = 580 + 2 50 = 680/-
Indirect cost = 16 70 = 1120/-
Total cost = 1800/-
Step 2: Now crash activity 2 - 5 by 5 days. Critical path changed to 1-3-4-5
Direct cost = 680 + 5 60 = 980/-
Indirect cost = 12 70 = 840/-
Total cost = 1820/-
Step 3: Activities on new critical path having cost slope less than indirect
cost are (3 - 4) and (4 - 5)
Crashing (4 - 5) by 2 days, critical path again changes to 1-2-5.
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Direct cost = 980 + 2 10 = 1000/-
Indirect cost = 11 70 = 770/-
Total cost = 1770/-
Step 4: The project cannot be crashed any further as the activities on the
critical path are already crashed. The activity (4 - 5) need not be crashed by 2 days,
instead it can be crashed by only one day without affecting the project duration. But
cost changes. There will be a saving of crashing cost of activity (4 - 5) for one day.

Total cost = Rs. 1760/- Total duration = 11 days

12. A small project consist of 7 activities. The activities are identified by their
starting and ending nodes. Normal time, cost and crash time and cost figures for all
the activities are given below:
(a) Draw the net work diagram?
(b) What is the normal project duration?
(c) Which activities fall on critical path?
(d) What is normal cost of the project?
(e) If all the activities are crashed immediately. What is crash cost?
(f) What will be the minimum project duration if activities are crashed?
(g) Develop the most economic project schedule, if indirect cost per week is Rs.90.
Activities Normal Crash
Weeks Cost Week Cost
1-2 A
1-4 B
1-3 C
2-4 D
3-4 E
2-5 F
5
7
3
6
3
9
60
150
30
150
100
115
4
5
2
4
3
7
90
250
60
250
100
175
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4-5 G 5 100 3 240
(b) Normal project duration is 16 weeks as the duration of longest path is 16 weeks
(c) Critical activities are 1-2-4-5
(d) Normal cost of the project = Rs. 705
Indirect cost of the project = Rs. 90 16 = 1440/-
Total cost of the project = Rs. 2145/-
(e) If all activities are crashed the total crash cost is Rs. 1165/-
(f) Cost slope is calculated as follows.
Activity Cost slope
1-2
1-4
1-3
2-4
3-4
2-5
4-5
30
50
30
50
0
30
70
All activities has a cost slope less than indirect cost. The activity on the
critical path having minimum cost slope is (1 - 2) Activity A can be crashed by 1
week.
Project duration is 15 weeks.
Direct cost = 705 + 30 1 = 735/-
Indirect cost = 90 15 = 1350/-
Total cost = 2085/-
Then activity 2-4 can be crashed by 2 weeks.
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New project duration = 15-2 = 13 weeks
Direct cost = 735 + 50 2 = 835/-
Indirect cost = Rs. 90 13 = 1170/-

Total cost = Rs. 2005/-

After crashing we have two critical paths 1-2-5 and 1-2-4-5 of 13 weeks
duration. In crashing the project further, the only alternative is to crash activity 2-5
and 4-5 simultaneously by 2 weeks.
Duration = 13-2 = 11 weeks
Direct cost = 835 + (30 + 70) 2 = 1035/-
Indirect cost = 90 11 = 990/-
Total coat = 2025/-
Comparing the total cost b/w various durations like 15, 13, 11 we conclude
that 13 weeks schedule is the most economic.
LINE BALANCING (OR LINE OF BALANCE)
The term Assembly line balancing is associated with the schedule of
production line jobs that balances the workload of each work station so that each of
the worker on the production line has to carryout more or less equal amount of work.
The first step is to divide the whole work into elements and lists them
sequentially along with the time required to complete the element and group the
elements, which have to be performed into balanced work assignments. The
objective is to group the tasks so that the output rate of each work station meets, as
closely as possible without exceeding, the time available for working on each unit,
this procedure minimises the workers and equipment needed to operate the line at the
desired rate. This process of grouping the tasks/ elements is known as line balancing.
Methods used for balancing the line:
1. HEURISTIC METHOD: Heuristic means searching to find out. That is to find
out things for one self. Heuristic are often simple, thumb rule that are used to solve
complex problems. Heuristic models utilize commonsense, logic and more than all
experience and commonsense to tackle new problems.
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Steps:
(a) Identify the work
(b) Break down the work into elemental tasks or steps
(c) List the various elements along with their precedence relationship or logical
relationships and the time required.
(d) Sketch the precedence diagram
(e) Consider the highest time element in the table. This time will become cycle
time.
(f) Add up all elemental times and find out the total time
(g) Divide the total time by cycle time to get the no. of work stations.
(h) Assign tasks to stations or group the elements, so that each group is considered
as a station. Here we must take care to see that the precedence relationship is
not violated. Also total time of all the elements in a group does not exceed
cycle time.
P1. There are nine elements in completing a job. The precedence relationship and
the time required in minutes to complete each element is given below.
Elemental
tasks
1 2 3 4 5 6 7 8 9 -
Immediate
predecessor
- - 1 2 3 5 4 6 8.7 -
Duration 3 4 2 5 4 8 2 4 6 38
min
Total station time = 38 minutes
Highest time in the table = 8 minutes, Hence Cycle time = 8 minutes (Note:
you can consider any highest number than highest time element as cycle time. But
cycle time cannot be less than the greatest time element.
No. of work stations =
Total time
Cycle time
=
38
8
= 4.75 5 stations
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Assignment of work elements to work stations
Station Element Duration in
(sec)
Cumulative
time (sec)
Idle time (sec)
S
1
1
4
3
4
3
7
1
S
2
3
4
2
5
2
7
1
S
3
5
7
4
2
4
6
2
S
4
6 8 8 0
S
5
8 4 4 4
S
6
9 6 6 2
Since the idle time is uneven, the line is not perfectly balanced. The uneven
idle time may lead to number of labour problems.
We shall now try with CT = 10 minutes. No of stations =
38
10
= 3.8

4 no.
Station Element Duration Cumulative
time
Idle time
S
1
1
2
3
3
4
2
3
7
9
1
S
2
4
5
5
4
5
9
1
S
3
6 8 8 0
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7 2 10
S
4
8
9
4
6
4
10
0
Line Efficiency = Ratio of total station time to the product of cycle time and the
number of work stations
=
38
100 95%
10 4

Balance Delay - is the measure of time efficiency and is the total idle time of all
stations as a percentage of total available working time of all stations = 100 - LE =
100 - 95 = 5%
Smoothness Index = is an index to indicate the relative smoothness of a given
assembly line balance. A smoothness index of zero indicates perfect balance.
SI =
( )
2
max i
ST ST

where ST
max
= Max. station line
STi = Station time of station i
i.e., SI =
( ) ( ) ( ) ( )
2 2 2 2
10 9 10 9 10 10 10 10 + + + =
2
= 1.4
Designing an assembly line, remember :
1 K N and
max i
T CT T
2. A company is setting an assembly line to produce 192 units per eight hour shift.
The information regarding work elements in terms of time and immediate
predecessors are given.
Work element Time (sec) Immediate predecessor
A
B
C
D
40
80
30
25
-
A
D, E, F
B
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E
F
G
H
I
J
20
15
120
145
130
115
B
B
A
G
H
C, I
1) What is the desired cycle time?
2) What is the theoretical number of stations?
3) Use largest work element time rule to workout a solution on a precedence
diagram.
4) What are the line efficiency and balance delay of the solution obtained?
Ans: 1) 150 seconds
2) 5 stations
4) 96% and 4%
3. The company is engaged in the assembly of a wagon on a conveyor. 500
Wagons are required per day. Production time available per day is 420 minutes. The
other information is given below regarding assembly steps and precedence
relationships. Find the minimum number of work stations, balance delay and line
efficiency.
Task Time (sec) Task that must precede
A
B
C
D
E
45
11
09
50
15
-
A
B
-
D
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F
G
H
I
J
K
12
12
12
12
08
09
C
C
E
E
F, G, H, I
-
Total 195 -
4. For the given precedence diagram, carry out the line balancing and improve the
solutionusing henristic method.
RANK POSITION WEIGHTAGE (RPW) METHOD (HELGESON AND
BIRNIE METHOD)
1. Develop a precedence diagram
2. Determine positional weight for each work element. A positional weight of an
operation corresponds to the time of the longest path from the beginning of the
operation through the remainder of the net work.
3. Rank the work elements based on the positional weight in step 2 in the
decreasing order.
4. Proceed to assign work elements to the work station where the elements of the
highest positional weight and rank are assigned first.
5. If at any work station additional time remains after assignment of an operation,
assign the next succeeding ranked operation to the workstation, as long as the
operation does not violate the precedence relationship and the station time does
not exceed cycle time
6. Repeat steps 4 and 5 until all elements are assigned to the work stations
5. Consider the following assembly network relation ships of a product. The
number of shifts per day is two and no. of working hours is 8. The company aims to
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produce 80 units of the product per day.
(a) Group the activities into workstations using Rank positional Weight
Method and
(b) Compute Balancing efficiency
Operation Number Immediate preceding tasks Duration (min)
1
2
3
4
5
6
7
8
9
10
-
1
1
1
2, 3
3, 4
5
5, 6
4, 6
7, 8, 9
7
2
2
5
8
3
4
7
9
8
Cycle time =
2 8 60
80

= 12 min
No. of work station =
55
12
= 4.58

5 stations
Opem. RPW Opem. RPW
1
2
3
4
5
32
25
23
25
23
6
7
8
9
10
20
12
15
17
8
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177