Production Planning & Control

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 productsforecasting 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 – ERPRole 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- problemsScheduling through PERT / CPM problems. Despatching- duties- procedure- rules. Follow up and reporting- types-report preparation and presentation.

References 1. 2. 3. 4. 5. 6. 7.

Modern Production Management Principles of Production Management Production management principles Production Planning and Control Manufacturing Planning &Control Production and operations management Modeling the supply chain -

E.S.Buffa J.Apple Mcycss K.C.jani& L.N.Aggarwal Volfman, Berry, Whybark systems R.Paneerselvam 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 consequently 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 Company’s 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 semifinished 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 specifications 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 feedback 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 impse~ 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 (1) is an estimate of future based on subjective considerations other than just historical data the past data. (2) good subjective estimation is based (2) requires statistical and management on

managers

skill

experience

and science techniques.

judgment (3) Influence of one’s own perception (3) achieved by systematically combining and bias. So it is less accurate & low and casting foreward in a pre determined reliability

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 plant’s 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 competitor’s 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

short term

long term

b) Scatter diagrams 2. Mathematica methods

1. Method of inspection 2. Method of average

a) Pearsonian method 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 a) Arithmetic straight line trend

squares method 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:

Limitations:

P2.

(1)

The method is simple

(2)

No possibility of personal prejudice and bias

(1)

It assumes a straight line relationship b/w the plotted points.

(2)

It is associated with the defects of arithmetic averages.

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) (2)

The method is simpler compared with the method of least squares. 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)

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.

3 yearly moving total

3 yearly moving avg

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

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 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

Total of 4 years

Sales (in lakhs)

1994

200

1995

240

1996

184

(3)

848

1720

215.00

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. Σ y = Na + bΣ x Σ xy = aΣ x + bΣ x2 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 = Σ y/N; b = Σ xy/Σ x2 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) Exports in

Deviation from

Rs. crores

middle year

y

x

xy

x2

1993-94

1.49

–2

–2.98

4

1.106

1994–95

1.24

–1

–1.24

1

1.476

1995–96

1.69

0

0

0

1.846

1996–97

1.70

+1

1.70

1

2.216

1997–98

3.11

+2

6.22

4

2.586

N=5

Σ y = 9.23

Σ x=0

Σ xy=3.7

Σ x2=10

Year

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 93–94 = 1.846 + 0.370 × (–2) = 1.106 Y 94–95 = 1.846 + 0.370 × (–1) = 1.476 Y 95– 96= 1.846 + 0.370 × (0) = 1.846 Y 96–97 = 1.846 + 0.370 (1) = 2.216 Y 97–98 = 1.846 + 0.370 (2) = 2.586 Y 2002–03=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 Σ 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 Σ 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

30

33

37

39

42

46

48

50

55

58

(x103) (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 = abx, 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: Σ log y = N log a + Σ x log b – (1) Σ × log y = Σ x log a + Σ x2 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

x2

log y

x log y

Year

Sales (Rs.lakhs)

Deviation from middle year x

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

Σ x= 0

N=5 Σ

Σ

Σ x2=10

log y = 10.3429

Σ

xlogy = 0.1884

log y = N log a + Σ x log b ⇒10.3429 = 51ga + 0

Σ xlog y = Σ log a + Σ x2 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 + cx2 The normal equations of this second degree parabola are:Σ Y = Na + bΣ x + c Σ x2

(1)

xy = a Σ x+bΣ x2 + cΣ x3

(2)

Σ x2y = aΣ x2 + bΣ x3 + cΣ x4 8.

(3)

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

6

10

15

39

25

20

15

Sales (Rs.lakhs)

Year

Sales (Rs.)

Deviation

Long term trend of

(y)

(x)

xy

x2

x3

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

Σ x=0

Σ xy= 57

Σ x2 = 28

Σ x =0

Σ x4=19 6

Σ x2 y=34 9

Σ y= 130 Normal equations :

3

130 = 7a + b.o + 28c

(1)

57 = a.0 + 28b + c.o

(2)

349= 28a + b.o + 196 c

(3)

x4

x2y

sales

Solving, b = 2.0357 a = 26.714 and c = –2.0357 Equating the parabola, y = 26.714 + 2.0357x – 2.0357x2 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 +

α

(Later obsrv.-old for cast) where α

=

smoothing constant and is a fraction between 0 and 1. It has been found appropriate to have α 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 (ii) Mathematical methods deviation method

(b) Scatter diagrams or scatter grams

(a) Pearsonian method

(c) Ranking method

(b) Concurrent or concomitant

(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 (γ ) which varies within ± 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 pearson’s coefficient of correlation is given by the formula:

(d)

Regression Analysis After having established the fact of correlation between two variables, it will be

one’s 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. Σ y = Na + bΣ x

(1)

Σ XY = Na Σ x + b Σ x2

Month

Nail driver 4

(2)

Constructive 8

x2

y2

xy

sales (10 )

volume 10

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

Σ y=207

Σ x=54.50

Σ y2=2169.5 0

Σ x2=152.75

Σ xy=598.7 5

To find the most likely sales estimate when construction volume is Rs.300000000, we can have two normal equations. Σ y = Na + bΣ x Σ xy = aΣ x + bΣ x2 Substituting the values, 207 × 104 = 20a + 54.5 × 108 b 598.75 ×1012 = 54.5×108a + 152.75×108 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 + 152.75×108 × 20 × b Solving a = 109.86 × 103 b = –23.35 × 10–6 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 σ x, σ 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 firm’s 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 104

Construc tion volume 108

y2

x2

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 (x–65) 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 yesterday’s plan and tomorrow’s 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)

1.

Short-term forecasting

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 don’t 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 customer’s 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 competitor’s 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 consumer’s 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 coordination of the firm's material and physical facilities towards the attainment of prespecified 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 abovenamely: 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 controlcost 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 semidiversified manufacture. Function

Phase

Formal Technology

(1) Estimate of future work (1) Prior planning (forecasting)estimation of material, time and money

(1) Fore-casting

(2) Preparation of work authorisation

(2) Order writing

(3) Preparation of specification (Blue prints drawings, list specification Bill of material)

(3) Product design of

(4) Preparation of detailed work plan

(2) Action planning

(4) Process planning (Routing) sequence operation

of

(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

65

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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

(10) Collecting data

(4) Follow up phase (10) Data collection

(11) Interpreting the data

(a) Progress (11) Data Interpretation reporting

(12) Correcting the work plan

(b) action

(13) If the planning is to be redesigned

(9) Dispatching (work assignment to various shops)

Corrective (12) Expediting (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. Time

Jigs Department

Machine

Operation

Description

Tool /fixtures

Smithy

Power hammer

1 2

pH/15

Forge leaving for machining over

–

–

Setup

Operation

time

time

4 hrs

30 min

1 hr

25 min

all

Punching

the hole in the forging Heat treatment

Furnace

3

Normalising

–

–

4 hrs.

4 hrs.

4

Face two ends,

Lathe

Chuck

15

1 hr.

Turnouter teeth

tool

F/H/4

Machine

Centre

shop

Lathe C/L/5

68

min

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Milling

5

Cut teeth

Side

Dividing

40

machine

and

head

min

M/MC/15

face

5 hrs

cuatter Slotter

6

Make key way

SL/7

Slotting

10

tool

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 day’s 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 Part No. For Assembly S – 210 R S-220 F S-230 F

1 2 4

5 500 1000 2000

12 500 1000 2000

75

Month : April Quantity Required on Dates indicated 19 26 500 500 1000 1000 2000 2000

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S-240 F S-250 T S-260 T

2 1

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 40 ORDER NO.

Week Ending : May 5th Hrs.

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 manufacture 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

1 Examples

2 Prototype models machine tool manufacturing special projects, large turbogenerator, boilers, ship building materials, handling system, special electronic equipments etc.

End Product (2) Quantity and product design

(3) Equipment used (4) Type of plant layout

Batch production or similar process 3 Shoe making, cloth manufacturing, forging, casting processes, and chemical plants etc.

Continuous production 4 Automobile industry, electrical appliances, household appliances, sugar mills, toy manufacturing, company, Glass manufacturing

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.

General purpose

General purpose

Special purpose

Process layout (functional)

Process layout or combination Skilled since there is frequent changes in product design and machine set up for each lot.

Product layout Semi-skilled or unskilled. Since the manufacturing activities become a routine function

(5) Skill of worker

Highly skilled to handle special jobs

(6) Supervising difficulties

Much

Less

Mobile

Less mobile, conveyors can also be used

High

Relatively low

High

Less

Quite less

Complex

Easy

Very easy

Complex Long Easier, Flexibility if one machine is under repair another machine can be used Complex and in details as the job changes every time

Easy Relatively short

Very easy Very short Very difficult because of perfect balancing of the production line Only at the out set of new job. Once the instructions are given it

(7) Material handling equipment (8) In process inventories (9) Unit cost of item (10) Prior planning (11) Control (12) Cycle time (13) Balance of load (14) Job instructions

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Relatively difficult Few job instructions when the product of another lot begins

Quite less Built in types, wide scope for mechanised material handling system e.g. conveyors, over head rails etc. Low, since production is continuous

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(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

(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

becomes a routine. High investment in machines since there may be duplication of machine for each production line 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) (ii)

Every transfer of material to be shown, 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, worker’s 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 planner’s 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, decisionmaking 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

Minutes

1→ 2

Time in Min

3

Idle time in

5

36

33

34

30

36

34

32

→3

→

4 →5 →6 →7 →8 →9 Output

4

2

5

4

8

2

4

6

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 = (8×60)/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 STj = 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 = 100–LE as a percentage, Here it is 100–95 = 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, Tj = Time of work element ’i’, N = Total number of work elements, Tmax = 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 Tmax ≤ CT ≤ Σ 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 (Tj) 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.

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

Station number

Line Effie icy = Balance delay = BD = 100–83.3 = 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

Ti 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) (2)

Develop a precedence diagram 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 operator’s 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 ‘i’th 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...WSmax, being the maximum number of workstations. ti = time required to finish ‘i’ th element. Decision variables Xij 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. Σ tiXij ≤ C, where C = cycle time assumed. And j = 1,2,3...WS max for the given example.

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4X11 + 6X21 + 5X31 + 3X41 + 7X61 ≤ 10 4X12 + 6X22 + 5X32 + 3X42 + 3X52 + 7X62 ≤ 10 4X13 + 6X23 + 5X33 + 3X43 + 3X53 + 7X63 ≤ 10 4X14 + 6X24 + 5X34 + 6X44 + 3X54 + 7X 64 ≤ 10 4X15 + 6X25 + 5X35 + 6X45 + 3X55 + 5X65 ≤ 10 4X16 + 6X26 + 5X36 + 6X46 + 3X56 + 7X66 ≤ 1 0 (ii)

Element (task) constraint: Element constraint makes certain that an element is assigned to one station only. Σ Xij = 1 where ‘i; is 1,2,3....N (N = 6) for the given example X11 + X12 + X13 + X14 + X15 + X16 = 1 (for task is assigned to station) X21 + X22 + X23 + X24 + X25 + X26 = 1 X31 + X32 + X33 + X34 + X35 + X36 = 1 X41 + X42 + X43 + X44 + X45 + X46 = 1 X51 + X52 + X53 + X54 + X55 + X56 = 1 X61 + X62 + X63 + X64 + X65 + X66= 1

(iii) Precedence constraint: Referring to the precedence diagram 4.15 the element number 3 follows the element 1, thus X31≤ X11. If element 1 is assigned to work station 1, then the decision variable X11=1 and if element 3 is not assigned to workstation 1, then X31 = 0, since 0 ≤ 1, X31 ≤ X11 is permitted. Other precedence relationship can be written as: X32 X11 + X12 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, X33 ≤

X11 + X12 + X13

...............................

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............................... X56 ≤

X31 + X32 + X33 + X34 + X35 + X36

......................................... ....................................... X66≤ X41 + X42 + X43 + X44 + X45 + X46 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 (X54 + X64) + 10 (X55 + X65) + 100 (X56 + X66) 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 (X54 + X64) + 10 (X55 + X65) + 100 (X56+X66) X54 means, element 5 has been kept at workstation 4 X55 means, element 5 has been kept at workstation 5 X56 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 information’s. 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 Observation

Process 1. Active Process: Output vs Time 2. Idele Process: Machine idle time; break downs Compare progress with plans

Inventory Inspection Records of Process stock level control charts

Immediate action

Expedite

Evaluation

Process Capacity maintenance schedules

Issue production and procurement orders Replenishment policies, inventory systems

Analysis

Cost Collect cost data

Distribution of Process demand, trend, capabilities, seasonal trends fluctuations

Compute cost and compare with estimates Initiate 100% Adjust inspection sales price adjust if possible processes 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 Dispatcher’s 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 Foreman’s 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 jobbecause 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:................... Material with specification:............

Drawing No...... Part Drawing: Quantity:...............

. Issue date:........... Routing Operation Description Material Tools Dept. handling Machine

Jigs & fixtures

Time Set up

Prepared by: dept.

Checked by:

Operation

Date: Head of P.P.C.

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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

Description

Machine

Special

Feed

Speed

Depth

Finish

Tools

Set

Opern.

total No.

of

&

Instruments

cut/mm

m/min

of cut

size

&

up

time

mm

mm

Jigs

operation Technologist

& its No

&

Checked by:

Date:................................

JOB CARD (SIDE : A) Company:........... Shop:..............

No:.../....

Job Card No........

Part No:....... Drawing No:......

Name of the Job: .......... Quantity/sets:..... Material type:........ (Cast/Forged/Rolled/Machined) Gross Weight/piece: Net Weight/piece ....... Quantity:........

Total Sets:........ kg. Total

Scheduled time Start Operation number

Descri -ption of operati on

Set up Operation time time in in sec sec

Date

127

Time

Actual time

Finish

Data

Start

Time Date

Time

finish

Date

Time

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Machine No... Card location:.... Rate setter:...

Incentive Group No:.... Previous operation.... Date .........

Total time allowed for quantity....Hours Next operation....... Checked by......... Planner.......

(Job Card: Side 1) JOB CARD : SIDE - B Delay greater than 30 mins

From

To

Lost hours

Inspection

Code Delays

Code

Quantity passed

1. No. Drawing D 2. No.Material M 3. Breakdown B 4. No. Crane C 5. No. Tool T Rejection due to 6. No.gage G Man 7. Operator Idele I 8. 9. 10.

Quantity Rejected

Signature of Inspector

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:................ MOVE CARD

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INSPECTION CARD Inspection Branch:....................... Order No:................. Type of Inspection:.............. Changed to:..................

Part No:...... Date:........

Quantity

Number scrapped

Material

Number passed

Number rejected

No:..../......

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 person’s 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 No.

Description

1.

Turning on lathe (No.L 201)

Monday

Tuesday

Wednesday Thursday

132

Friday

Saturday

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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 M\CA

TIME

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 Date of Date of Date of Date of entrance EE admission comme- 1 exam results s ncement semeste r exam

Date of Date of results of comme II 1 Sem Sem. results

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 A1,A2,A3,....An,B1, B2, B3....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 A1,A2.....An and

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B1, B2...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 nth job first. If it is Bm, select mth 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 M1, M2 and M3. Each job has to go through three machines in the order M1, M2 and M3. The conditions to be satisfied in order to solve the problem by Johnson’s method:1.

The smallest processing time on machine M1 ≥ largest processing time on machine M2.

2.

The smallest processing time on machine M3 ≥ largest processing time on mahcine M2.

Step 1: Convert the three machine problem into two machine problem by introducing two fictitious machines G and H. Gi = M1i + M2 i Hi = M2i + M3i, i = 1,2,3....n Step 2 : Once the problem is converted to n job 2 machine, the sequence is determined using Johnson’s 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 M1, M2.....Mm in the order M1, M2....Mm. Let Tij denote the time taken by the jth job on the ith 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 (T2j, T3j,....T(m–1)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 M1 and Mm should be ≥

Max time on any of the 2 to (m–1) 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 + T2j + ..... + T(m–1)J T Hj = T2j + T3j + ..... + Tmj Step 5: Now obtain the sequence for n jobs using Johnson’s 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 M1 and M2 is the order M1 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

140

M2

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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 M2 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 M1, M2 and M3. The processing times are given in hrs. Find the optimal sequence of jobs. Find the minimum total elapsed time and Idle time on M2 and M3. Jobs A B C D E F G

M1 3 8 7 4 9 8 7

M2 4 3 2 5 1 4 3

M3 6 7 5 11 5 6 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. Job

M/c A M/c B

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, M2...M6. 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) Processing time Job A B C D

M1

M2

M3

M4

M5

M6

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

PALMER’S 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 + (m–3) tjm–1 + (m–2 + ...... (m–3) tj2 – (m–1) tj1 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 ≥ smallest processing time on M/c 3 ≥

largest processing time on M/c 2

largest processing time on M/c 2

ie, condt 1: 3 12 (not satisfied) condt 2: 2 12 (not satisfied) Application of Palmer’s Hensistic. In this problem, number of M/c = 3 S1 = (3–1) t13 + (3–3) t12 + (3–5) t11 = 2×10 + 0× 4 + (–2) × 3 = 14 S2 = (3–1) t23 + (3–3) t22 + (3–5) t21 = 2 × 5+0×1+(–2) ×11= –12 S3 = (3–1) t33 + (3–3) t32 + (3–5) t31 = 2×13 + 0 ×9 + (–2) ×7 = 12 S4 = (3–1) t43 + (3–3) t42 + (3–5) t41 = 2×2+0×12 + (–2)×10 = –16 Arranging the slopes in the decreasing order S1>S3>S2>S4 The final sequence is 1–3–2–4

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

e)

(ii) EDD

(iii) LPT

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

Various characteristics are:(i)

Total completion time = 38 days

144

34

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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 4–1–2–3–5 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

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:-

145

18

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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 won’t 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 (tp) (iii)

Most likely time (tm)

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)i–j = EOTi

(LST)i–j = (LOT)j –ti–j

(EFT)i–j = EOTi + t i–j (LFT)i–j = (LOT)j TF = [(LOT)j–(EOT)i]–ti–j FF i–j = [(EOT)j–(EOT)i]–ti–j (EST of fail event – EST of head event – dum) IFi–j = [(EOT)j–(LOT)i]–t i–j (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 ±3σ 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 σ

on either side), its

standard deviation can be known to us. These two extreme values are ‘to’ and ‘tp’. σ=

tp – to 6

 tp − to  varinance (σ ) =    6 

2

2

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 (te). Probable positions of occurrence of most likely time in a Beta distribution are two at tm1 and tm2, however the positions of occurrence of to and tp 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 =

to + tp 2

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to + tp Expected time =

( te ) =

2

+ tm + tm 3

 tp + 4 tm + to  =  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

L

3

0

3

0

3

0

0

0

157

I N T F

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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

Activi ty time

EST

EFT

LST

LFT

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

Activity

Slack

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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LFT

Slac k

Free slac k

0

4

0

0

10

10

16

6

0

4

14

4

14

0

0

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

Acti vity

Dura tion

EST

EFT

LST

A

4

0

4

B

6

4

C

10

D

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 (to)

Most likely time (tm)

Pessimistic time (tp)

1–2

5

12

17

1–3

9

11

12

1–5

8

10

13

2–4

9

11

13

2–5

5

8

9

3–6

14

18

22

4–8

14

17

21

5–7

21

25

30

6–7

8

13

17

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7–8

6

9

12

Activity

Expected duration

Variance

1–2

11.67

4.00

1–3

10.83

0.25

1–5

10.17

0.69

2–4

11.00

0.44

2–5

7.67

0.44

3–6

18.00

1.78

4–8

17.17

1.36

5–7

25.17

2.25

6–7

12.83

2.25

7–8

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 P=

TS − TE σ

When TS = Schedule time TE = Expected time σ = Standard deviation 40 − 40 = 0 from table probability is 50% 8

(a)

TS = 40, TE = 40 ∴ P =

(b)

TE = 40, TS = 36 ie, P =

36 − 40 = − 0.5 from table probability is 8

30.8% 48 − 40 = − 1 from table probability is 841% 8

(c)

TE = 40, TS = 48 ie, P =

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 %

to

tm

tp

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

1–2

2

4

7

2–3

1

1

3–5

1

5–7

t o + 4t m + t p

σ

σ2

4.167

0.83

0.688 9

2

1.167

0.17

0.028 9

2

3

2.00

0.33

0.108 9

3

5

6

4.83

0.50

0.250

7–9

4

6

10

8.33

1.00

1.00

9–10

5

7

10

7.167

0.83

0.688 9

2–4

2

4

5

3.833

0.50

0.250

4–6

1

2

3

2.00

0.33

0.108 9

6–8

7

10

13

10.00

1.00

1.00

8–10

4

7

9

6.83

0.83

0.688 9

10– 11

1

1

2

1.167

0.17

0.028 9

te =

6

critical path is 1–2–3–5–7–9–10–11 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. ( σ ) =

2.7945 = 1.6717

Normal deviate (Z) =

ts − te σ

=

26 − 29 = –1.79 1.6717

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)

1–2

3

15

6

1–3

2

14

5

1–4

6

30

12

2–5

2

8

5

2–6

5

17

11

3–6

3

15

6

4–7

3

27

9

5–7

1

7

4

6–7

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 1–4–7 Duration is 25 days.

(d) Activity

σ

( σ) 2

1–2

2

4

1–3

2

4

1–4

4

16

2–5

1

1

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2–6

2

4

3–6

2

4

4–7

4

16

5–7

1

1

6–7

1

1

Variance of project = 16 + 16 = 32 σ of project = Z=

tg − te σ

=

32 = 5.66

27 − 25 = + 0.353 5.66

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 =

Crash cos t − Normalcos 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

8

100

6

200

50

1-3

4

150

2

350

100

2-4

2

50

1

90

40

2-5

10

100

5

400

60

3-4

5

100

1

200

25

4-5

3

80

1

100

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

3-4

5

4

9

10

15

6

4-5

3

10

13

15

18

5

Critical

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. 1760/12.

Total duration = 11 days

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

5

60

4

90

1-4 B

7

150

5

250

1-3 C

3

30

2

60

2-4 D

6

150

4

250

3-4 E

3

100

3

100

2-5 F

9

115

7

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

30

1-4

50

1-3

30

2-4

50

3-4

0

2-5

30

4-5

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/-   Total cost = Rs. 2005/Indirect cost = Rs. 90 × 13 = 1170/-  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 week’s 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

1

2

3

4

5

6

7

8

9

-

-

-

1

2

3

5

4

6

8.7

-

3

4

2

5

4

8

2

4

6

38

tasks Immediate predecessor Duration

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 38 = = 4.75 × 5 stations Cycle time 8

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Assignment of work elements to work stations Station

Duration in

Cumulative

(sec)

time (sec)

1

3

3

4

4

7

3

2

2

4

5

7

5

4

4

7

2

6

S4

6

8

8

0

S5

8

4

4

4

S6

9

6

6

2

S1

S2

S3

Element

Idle time (sec)

1

1

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 = Station

Element

Duration

Cumulative

38 = 3.8 ≈ 4 no. 10 Idle time

time S1

S2

S3

1

3

3

2

4

7

3

2

9

4

5

5

5

4

9

6

8

8

172

1

1

0

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S4

7

2

10

8

4

4

9

6

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 =

∑ ( STmax − STi )

2

where STmax = Max. station line STi = Station time of station ‘i’

i.e., SI =

( 10 − 9 ) 2 + ( 10 − 9 ) 2 + ( 10 − 10 ) 2 + ( 10 − 10 ) 2

=

2 = 1.4

Designing an assembly line, remember : 1 ≤ K ≤ N and Tmax ≤ CT ≤ ΣTi 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

40

-

B

80

A

C

30

D, E, F

D

25

B

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E

20

B

F

15

B

G

120

A

H

145

G

I

130

H

J

115

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

45

-

B

11

A

C

09

B

D

50

-

E

15

D

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4.

F

12

C

G

12

C

H

12

E

I

12

E

J

08

F, G, H, I

K

09

-

Total

195

-

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

-

7

2

1

2

3

1

2

4

1

5

5

2, 3

8

6

3, 4

3

7

5

4

8

5, 6

7

9

4, 6

9

10

7, 8, 9

8

Cycle time =

2 × 8 × 60 = 12 min 80

No. of work station =

55 = 4.58 ≈ 5 stations 12

Opem.

RPW

Opem.

RPW

1

32

6

20

2

25

7

12

3

23

8

15

4

25

9

17

5

23

10

8

176

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177