OPERATIONS MANAGEMENT Planning

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OPERATIONS MANAGEMENTPlanning
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PRODUCT
PROCESSES
HR
OPERATION MANAGEMENT
FACILITIES
MATERIALS
LAYOUT
SCHEDULING
PLANNING
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Operations ManagementProduct Definition Process

• Product
• The end result of the manufacturing process to
  be offered to the market place to satisfy a need
  or a want.

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Operations ManagementProduct Design and
Development

• Marketing and Product Design and Development
  are the two most critical contributors for the
  success of any New Product in the market
• - Product definition is conceptualised
  through market lead
• - The concept is translated into the
  tangible product by the design and development
  team.
• Will be suicidal, if the
  conceptualization of the Product definition on
  the basis of customer need/want is
  insufficient/incorrect and/or
• the Product designed on the basis of
  market lead fails to meet the customer need/want
  and/or inefficient vis-à-vis competition and/or
  is not cost effective (capital costs and
  operating costs) or any other reason that may
  hinder sales of the Product.

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Operations ManagementProduct Design

• Critical Factors
• - Must meet the required need/want of
  customers, critical for the success of the
  organisation
• - Must be manufacturable, with minimum
  additional capital investments
• - Must have an edge over competition
• - Must have versatility yet cost
  effective
• - Must be cost effective
• - Must be an out come of a team work
  Marketing,
• Manufacturing, Industrial Engineering
  and
• Design/Development teams

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Operations ManagementProduct Design

• Importance
• - Basis for investments and long term
  commitments
• - Organisation profitability depends on
  success of the
• Product/Service acceptance by market
• - Decides the Product/Service Cost
• - Failures discourage management in
  considering launch of
• the new products

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Capacity planning

• Capacity is the maximum output rate of a facility
• Capacity planning is the process of establishing
  the output rate that can be achieved at a
  facility
• Capacity is usually purchased in chunks
• Strategic issues how much and when to spend
  capital for additional facility equipment
• Tactical issues workforce inventory levels,
  day-to-day use of equipment

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PRODUCTION MANAGEMENTTo achieve the
objectives, key areas of interest are-
Manufacturing Systems- Materials Management-
Methods- Plant layout- Human Resource
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DISTINCT STAGES OF PRODUCTION SYSTEM

• Planning
• To analyze given data and devise scheme for the
  best utilization of resources
• Operations
• To perform action as per the plan
• Control
• To supervise operations with appropriate
  control mechanism that feeds back information
  about the progress of the work. The mechanism is
  also responsible for subsequent adjusting,
  modifying and redefining plans and targets to
  attain the goal.

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Aggregate Planning

• Concerned with the overall operations over a
  specified time horizon.
• Determines the efficient way of responding
  (allocating resources) to market conditions
• Effective allocate system capacity (plant,
  equipment and manpower) over designated period.
• A good production plan should
• gt be consistent with organisation
  policy
• gt meet demand requirements
• gt be within capacity constraints
• gt minimizes costs

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Aggregate Planning

• Game plan to consider an integrated view of
  Marketing, Finance and Operations
• Managerial objective is to develop an integrated
  game plan whose manufacturing portion is the
  production plan
• States the mission manufacturing must accomplish
  as a part of the Corporate objectives
• Production plan will link strategic goals to
  production and is coordinated with sales
  objectives, resource availabilities and financial
  budgets

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Aggregate Planning

• Planning Level
  Orientation
• Policy,
  Product, Process
• Long Range Plant
  decisions Strategic
• Intermediate Range Aggregate Planning
  Linking Activity
• Short Range Operations
  Decisions Operations
• Relationship
  between aggregate planning and other planning
  stages

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Aggregate Planning

• Long Range
• - Products
• - Processes
• - Plant
  Location
• - Plant
  Layout
• Intermediate Range (Aggregate)
• - Output
  rates
• - Employment
  level
• - Inventory
• -
  Subcontracting
• Short Range
• - Job
  assignments
• - Machine
  loading
• - Job
  Sequencing
• - Lot sizes

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Aggregate Planning

• Key Linkages of Production Planning
• Marketing Planning
• The Game Plan
• The Financial Plan
• Resource planning
• Production planning
• Demand Management
• Master Production Scheduling

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Aggregate Planning

• Top Down Planning
• 
  Strategic
• 
  Planning
• Aggregate
  Planning
• Master Production
  Planning
• Material Requirement
  Planning
• Detailed Scheduling (Shop
  Floor Level)

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Aggregate Planning

• Planning Stages
• Aggregate Plan
  Product Groups
• Master Production Schedule
  Products
• Material Requirement Planning
  Components
• The production plan needs to be expressed in
  meaningful units, but it also needs to be
  expressed in manageable number of units.

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Aggregate Planning

• - Production plan is not a Forecast of a Demand
• It is the planned production, stated on an
  aggregate basis, for which manufacturing
  management is responsible.
• Organisations attempt to satisfy variations in
  demand by manipulating the variables in its
  control
• Pure and Mixed Strategies can be used to indicate
  the variables in its control.
• PURE STRATEGY
• Output is changed by varying only one of the
  variables under control
• MIXED STRATEGY
• - Output is changed by varying two or more
  variables at a time

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Aggregate Planning

• Potential responses to demand fluctuations
• - Vary workforce size
• - Carry Product Inventory
• - Use Overtime
• - Extra Shifts
• - Vary load via Product mix
• - Subcontract
• - Vary customer services
• - Add contracyclical products
• - Vary marketing (price, advertising)

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Aggregate Planning Strategies

• Supply
• - Workforce
• Hire/Fire
• Overtime/Slack
• Temporaries
• Extra shifts
• - Demand
• Pricing
• Promotion
• Customer Service
• Backorders

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Aggregate Planning Functions

• 
  Current Status
• Production rates, work
  force size, inventory levels
• Demand Forecasts AGGREGATE PLANNING
  Aggregate Plan
• Customer Orders MODEL
  Production rates,
• 
  
  workforce size
• 
  
  Inventory levels
• 
  Capacity Constraints
• 
  equipment, materials
• 
  personnel, overtime,
• 
  extra shifts, subcontracting

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Structured approach to Aggregate Planning

• Set policies on controllable variables
• Establish forecast interval and horizon
• Develop demand forecasting system
• Select unit of aggregate capacity
• Determine relevant cost structure
• Apply aggregate planning techniques

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PRODUCTION MANAGEMENT The management of
those resources activities that are required to
produce goods for consumers or to the
organizations. The Production Management is
generally concerned with Manufacturing Industries.
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PRODUCTION MANAGEMENTTo be effective,
requires the focus and attention to details
related to- Utilization of materials-
Utilization of plant machinery- Utilization of
menwith the Product design and plant design
being optimum for the requirements.
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PRODUCTION MANAGEMENTTo achieve the
objectives, key areas of interest are-
Manufacturing Systems- Materials Management-
Methods- Plant layout- Human Resource
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Production Management

• Preplanning
• Covers an analysis of data and outline of basic
  sales reports, market research, product
  development and design.
• Problems of equipment policy and replacement
• New processes and materials, layout and workflow
• Collection of data on 4 Ms materials, methods,
  machines and manpower (and money) with respect to
  availability, scope and capacity

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Production Management

• Planning
• Once task specified, thorough analysis of 4Ms to
  select appropriate materials, methods and
  facilities
• Followed by routing, estimating and scheduling
• Detailed, realistic and precise planning leads to
  achieving schedules with greater efficiencies
• Short term and long term planning , for immediate
  and more distant future
• Functions include , standardization and
  simplification of products, materials and methods

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Production Management

• Controls
• Through dispatching, inspection and expediting
• Control of inventories, scrap, analysis of WIP,
  transportation

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FUNCTION OF PPC

• Materials
• Methods
• Machines Equipment
• Routing
• Estimating
• Loading Scheduling
• Expediting
• Inspection
• Evaluating

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Production Management

• Materials
• Raw materials
• Semi Finished Products
• Standard Finished Parts
• gt Specifications (dimensions and quality)
• gt Quantities and availability
• gt Delivery Dates
• gt Standardisation and variety reduction
• gt Procurement and Inspection
• - including semi finished from
  subcontractors

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Production Management

• Methods
• - Analyze possible methods of manufacture
• Define best method, for given facilities/circumsta
  nces
• Selection of processes for components and
  assemblies
• Sequence of Operations
• Division of Products into assemblies/subassemblies
  , within limitations of the layout

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Production Management

• Machines and Equipment
• - Relate methods to machines/facilities
• Maintenance Policy
• Tool Management
• Design and economy of jigs and fixtures
• Replacement policy for plant and machinery

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Production Management

• Routing
• Once methods and sequence of operations have been
  laid down
• gt Define each operation in detail
• gt Plan for production orders
• - Routing prescribes the flow of work in the
  plant and related to considerations of layout, of
  temporary storages, location of raw materials and
  components and of material handling system.
• - A fundamental production function on which all
  subsequent planning is based.

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Production Management

• Estimating
• - Based on Production Orders and detailed
  operation sheets, operation times are worked out
• Application of Methods and Routing, work
  measurement, with performance standards
• Human factor in Time and Motion study and hence
  time schedule

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Production Management

• Loading and Scheduling
• Machine loading to their capability and capacity
  for the task
• In conjunction with routing to ensure smooth work
  flow
• Together with estimating to ensure prescribed
  methods, feeds, speeds
• Toughest job as determines the utilisation of the
  resources and hence efficiency of the plant
• Scheduling must dovetail the operations, to avoid
  delays on subsequent operations, and minimise WIP
• Requires careful analysis of process capacities,
  coordination and knowledge of allowances,
  maintenance breakdowns etc.

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Production Management

• Dispatching
• - Execution of planning function
• Routine of setting productive activities in
  motion, through,
• gt Release of orders and instructions
• gt As per the sequence-route sheets,
  loading schedules
• - Authorizes start of production operations by
  releasing materials, components, tools, fixtures
  and instructions sheets to the operator
• - Ensures material movement according to the
  planned routing sheets and to schedules

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Production Management

• Expediting
• To keep close watch on the progress of the work
• Expediting- Follow up- Progress is a logical step
  after dispatching
• Dispatching initiates the execution production
  plan, expediting maintains and sees them through
  to their successful completion.
• Keeps close liasion with scheduling to have
  prompt feedback and corrections.

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Production Management

• Inspection
• Generally not a part of the PPC but critical in
  execution of the execution of the current plan.
• The limitations forms the basis for improvements
  and also planning.

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Production Management

• Evaluating
• Most essential function as link between control
  and future planning
• Dispatching and Expediting are concerned with
  immediate issues, but valuable information
  gathered in the process with proper feedback
  mechanism is very useful for evaluation and hence
  for improvement in utilsation of methods and
  facilities
• Must get its due attention as future profits
  depend on utilising best feedback for corrections

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Production Management

• Layout
• Affects allocation of machines to perform given
  tasks
• Important at design stage inselection of
  production processes
• Rigid layout may hamper integration of additional
  equipment, lack of space or limited mobility of
  equipment
• May have long transportation lines, increase
  production costs, WIP and cycle time
• Restrictions imposed affect PPC.

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Production Management

• Simplification and Standardisation
• Different types of materials and methods for
  production of different components, models or
  products
• Leads to variety of materials at different stages
  bought outs, manufactured, sub
  assemblies/assemblies etc.
• Also in processes tools, machines, jigs and
  fixtures etc.
• Simplification and Standardisation aims at
  defining a limited variety of different types
  which can satisfy the basic requirements with
  higher plant efficiency
• Joint responsibility of Design, Materials
  management, RD,PPC and others

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Production Management

• Time and Motion Study
• Relates to efficient utilisation of manpoer and
  to scheduling problems.
• Consists of Operation analysis and Work
  Measurement
• Operation analysis/Method study
  Evaluation,selection and development of an
  efficient method for a given task
• Work Measurement relates to establishing
  standard times for the various operations in the
  process of estimating function in production
  planning. Scheduling cannot be performed without
  such data.

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Inventory Control

• Importance of materials availability at various
  stages of production.
• Inventory Control Stores Management
• Complex Function
• No over stocking
• Finance
• Obsolescence
• Space etc

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Inventory Control

• No stock Outs
• Loss of production,
• Loss of business
• Imbalances adding costs

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Inventory Management

• What is meant by Inventory?
• Why inventory is necessary?
• What are the various forms of the inventory?
• What are the costs involved in inventories?
• What are the risks associated with the
  inventories?

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Materials Management

• Importance
• - Materials form major part of the
  Product cost 60 or so
• - With contribution at say 15, every
  saved in materials is
• equal to approx 4 increase in
  Sales.
• - Has direct bearing on the
  profitability
• - Timely and right quality of
  materials availability decides the
• overall productivity of any
  organisation.
• - Cannot afford too much or too
  little both dangerous for
• survival and growth.

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Materials Management

• Functions
• - Material Planning and controlling
• - Purchasing/Vendor development
• - Stores and inventory control

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Inventory Management

• Forms bulk of current assets.
• Stock outs
• - Loss of profit from the missed
  sales
• - Loss of customer and good will
• - Loss of production
• - Reduced machine/men
  utilization
• Excessive Inventory
• - Inventory carrying costs
• - Cost of storage
• - Deterioration/obsolescence/pi
  lferage

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• 
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