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OPERATIONS MANAGEMENT Planning

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PRODUCTION MANAGEMENT To achieve the objectives, key areas of interest are; - Manufacturing Systems - Materials Management - Methods - Plant layout ... – PowerPoint PPT presentation

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Title: OPERATIONS MANAGEMENT Planning


1
OPERATIONS MANAGEMENTPlanning
2
PRODUCT
PROCESSES
HR
OPERATION MANAGEMENT
FACILITIES
MATERIALS
LAYOUT
SCHEDULING
PLANNING
3
Operations ManagementProduct Definition Process
  • Product
  • The end result of the manufacturing process to
    be offered to the market place to satisfy a need
    or a want.

4
Operations ManagementProduct Design and
Development
  • Marketing and Product Design and Development
    are the two most critical contributors for the
    success of any New Product in the market
  • - Product definition is conceptualised
    through market lead
  • - The concept is translated into the
    tangible product by the design and development
    team.
  • Will be suicidal, if the
    conceptualization of the Product definition on
    the basis of customer need/want is
    insufficient/incorrect and/or
  • the Product designed on the basis of
    market lead fails to meet the customer need/want
    and/or inefficient vis-à-vis competition and/or
    is not cost effective (capital costs and
    operating costs) or any other reason that may
    hinder sales of the Product.

5
Operations ManagementProduct Design
  • Critical Factors
  • - Must meet the required need/want of
    customers, critical for the success of the
    organisation
  • - Must be manufacturable, with minimum
    additional capital investments
  • - Must have an edge over competition
  • - Must have versatility yet cost
    effective
  • - Must be cost effective
  • - Must be an out come of a team work
    Marketing,
  • Manufacturing, Industrial Engineering
    and
  • Design/Development teams

6
Operations ManagementProduct Design
  • Importance
  • - Basis for investments and long term
    commitments
  • - Organisation profitability depends on
    success of the
  • Product/Service acceptance by market
  • - Decides the Product/Service Cost
  • - Failures discourage management in
    considering launch of
  • the new products

7
Capacity planning
  • Capacity is the maximum output rate of a facility
  • Capacity planning is the process of establishing
    the output rate that can be achieved at a
    facility
  • Capacity is usually purchased in chunks
  • Strategic issues how much and when to spend
    capital for additional facility equipment
  • Tactical issues workforce inventory levels,
    day-to-day use of equipment

8
PRODUCTION MANAGEMENTTo achieve the
objectives, key areas of interest are-
Manufacturing Systems- Materials Management-
Methods- Plant layout- Human Resource
9
DISTINCT STAGES OF PRODUCTION SYSTEM
  • Planning
  • To analyze given data and devise scheme for the
    best utilization of resources
  • Operations
  • To perform action as per the plan
  • Control
  • To supervise operations with appropriate
    control mechanism that feeds back information
    about the progress of the work. The mechanism is
    also responsible for subsequent adjusting,
    modifying and redefining plans and targets to
    attain the goal.

10
Aggregate Planning
  • Concerned with the overall operations over a
    specified time horizon.
  • Determines the efficient way of responding
    (allocating resources) to market conditions
  • Effective allocate system capacity (plant,
    equipment and manpower) over designated period.
  • A good production plan should
  • gt be consistent with organisation
    policy
  • gt meet demand requirements
  • gt be within capacity constraints
  • gt minimizes costs

11
Aggregate Planning
  • Game plan to consider an integrated view of
    Marketing, Finance and Operations
  • Managerial objective is to develop an integrated
    game plan whose manufacturing portion is the
    production plan
  • States the mission manufacturing must accomplish
    as a part of the Corporate objectives
  • Production plan will link strategic goals to
    production and is coordinated with sales
    objectives, resource availabilities and financial
    budgets

12
Aggregate Planning
  • Planning Level
    Orientation
  • Policy,
    Product, Process
  • Long Range Plant
    decisions Strategic
  • Intermediate Range Aggregate Planning
    Linking Activity
  • Short Range Operations
    Decisions Operations
  • Relationship
    between aggregate planning and other planning
    stages

13
Aggregate Planning
  • Long Range
  • - Products
  • - Processes
  • - Plant
    Location
  • - Plant
    Layout
  • Intermediate Range (Aggregate)
  • - Output
    rates
  • - Employment
    level
  • - Inventory
  • -
    Subcontracting
  • Short Range
  • - Job
    assignments
  • - Machine
    loading
  • - Job
    Sequencing
  • - Lot sizes

14
Aggregate Planning
  • Key Linkages of Production Planning
  • Marketing Planning
  • The Game Plan
  • The Financial Plan
  • Resource planning
  • Production planning
  • Demand Management
  • Master Production Scheduling

15
Aggregate Planning
  • Top Down Planning

  • Strategic

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

16
Aggregate Planning
  • Planning Stages
  • Aggregate Plan
    Product Groups
  • Master Production Schedule
    Products
  • Material Requirement Planning
    Components
  • The production plan needs to be expressed in
    meaningful units, but it also needs to be
    expressed in manageable number of units.

17
Aggregate Planning
  • - Production plan is not a Forecast of a Demand
  • It is the planned production, stated on an
    aggregate basis, for which manufacturing
    management is responsible.
  • Organisations attempt to satisfy variations in
    demand by manipulating the variables in its
    control
  • Pure and Mixed Strategies can be used to indicate
    the variables in its control.
  • PURE STRATEGY
  • Output is changed by varying only one of the
    variables under control
  • MIXED STRATEGY
  • - Output is changed by varying two or more
    variables at a time

18
Aggregate Planning
  • Potential responses to demand fluctuations
  • - Vary workforce size
  • - Carry Product Inventory
  • - Use Overtime
  • - Extra Shifts
  • - Vary load via Product mix
  • - Subcontract
  • - Vary customer services
  • - Add contracyclical products
  • - Vary marketing (price, advertising)

19
Aggregate Planning Strategies
  • Supply
  • - Workforce
  • Hire/Fire
  • Overtime/Slack
  • Temporaries
  • Extra shifts
  • - Demand
  • Pricing
  • Promotion
  • Customer Service
  • Backorders

20
Aggregate Planning Functions

  • Current Status
  • Production rates, work
    force size, inventory levels
  • Demand Forecasts AGGREGATE PLANNING
    Aggregate Plan
  • Customer Orders MODEL
    Production rates,


  • workforce size


  • Inventory levels

  • Capacity Constraints

  • equipment, materials

  • personnel, overtime,

  • extra shifts, subcontracting

21
Structured approach to Aggregate Planning
  • Set policies on controllable variables
  • Establish forecast interval and horizon
  • Develop demand forecasting system
  • Select unit of aggregate capacity
  • Determine relevant cost structure
  • Apply aggregate planning techniques

22
PRODUCTION MANAGEMENT The management of
those resources activities that are required to
produce goods for consumers or to the
organizations. The Production Management is
generally concerned with Manufacturing Industries.
23
PRODUCTION MANAGEMENTTo be effective,
requires the focus and attention to details
related to- Utilization of materials-
Utilization of plant machinery- Utilization of
menwith the Product design and plant design
being optimum for the requirements.
24
PRODUCTION MANAGEMENTTo achieve the
objectives, key areas of interest are-
Manufacturing Systems- Materials Management-
Methods- Plant layout- Human Resource
25
Production Management
  • Preplanning
  • Covers an analysis of data and outline of basic
    sales reports, market research, product
    development and design.
  • Problems of equipment policy and replacement
  • New processes and materials, layout and workflow
  • Collection of data on 4 Ms materials, methods,
    machines and manpower (and money) with respect to
    availability, scope and capacity

26
Production Management
  • Planning
  • Once task specified, thorough analysis of 4Ms to
    select appropriate materials, methods and
    facilities
  • Followed by routing, estimating and scheduling
  • Detailed, realistic and precise planning leads to
    achieving schedules with greater efficiencies
  • Short term and long term planning , for immediate
    and more distant future
  • Functions include , standardization and
    simplification of products, materials and methods

27
Production Management
  • Controls
  • Through dispatching, inspection and expediting
  • Control of inventories, scrap, analysis of WIP,
    transportation

28
FUNCTION OF PPC
  • Materials
  • Methods
  • Machines Equipment
  • Routing
  • Estimating
  • Loading Scheduling
  • Expediting
  • Inspection
  • Evaluating

29
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30
Production Management
  • Materials
  • Raw materials
  • Semi Finished Products
  • Standard Finished Parts
  • gt Specifications (dimensions and quality)
  • gt Quantities and availability
  • gt Delivery Dates
  • gt Standardisation and variety reduction
  • gt Procurement and Inspection
  • - including semi finished from
    subcontractors

31
Production Management
  • Methods
  • - Analyze possible methods of manufacture
  • Define best method, for given facilities/circumsta
    nces
  • Selection of processes for components and
    assemblies
  • Sequence of Operations
  • Division of Products into assemblies/subassemblies
    , within limitations of the layout

32
Production Management
  • Machines and Equipment
  • - Relate methods to machines/facilities
  • Maintenance Policy
  • Tool Management
  • Design and economy of jigs and fixtures
  • Replacement policy for plant and machinery

33
Production Management
  • Routing
  • Once methods and sequence of operations have been
    laid down
  • gt Define each operation in detail
  • gt Plan for production orders
  • - Routing prescribes the flow of work in the
    plant and related to considerations of layout, of
    temporary storages, location of raw materials and
    components and of material handling system.
  • - A fundamental production function on which all
    subsequent planning is based.

34
Production Management
  • Estimating
  • - Based on Production Orders and detailed
    operation sheets, operation times are worked out
  • Application of Methods and Routing, work
    measurement, with performance standards
  • Human factor in Time and Motion study and hence
    time schedule

35
Production Management
  • Loading and Scheduling
  • Machine loading to their capability and capacity
    for the task
  • In conjunction with routing to ensure smooth work
    flow
  • Together with estimating to ensure prescribed
    methods, feeds, speeds
  • Toughest job as determines the utilisation of the
    resources and hence efficiency of the plant
  • Scheduling must dovetail the operations, to avoid
    delays on subsequent operations, and minimise WIP
  • Requires careful analysis of process capacities,
    coordination and knowledge of allowances,
    maintenance breakdowns etc.

36
Production Management
  • Dispatching
  • - Execution of planning function
  • Routine of setting productive activities in
    motion, through,
  • gt Release of orders and instructions
  • gt As per the sequence-route sheets,
    loading schedules
  • - Authorizes start of production operations by
    releasing materials, components, tools, fixtures
    and instructions sheets to the operator
  • - Ensures material movement according to the
    planned routing sheets and to schedules

37
Production Management
  • Expediting
  • To keep close watch on the progress of the work
  • Expediting- Follow up- Progress is a logical step
    after dispatching
  • Dispatching initiates the execution production
    plan, expediting maintains and sees them through
    to their successful completion.
  • Keeps close liasion with scheduling to have
    prompt feedback and corrections.

38
Production Management
  • Inspection
  • Generally not a part of the PPC but critical in
    execution of the execution of the current plan.
  • The limitations forms the basis for improvements
    and also planning.

39
Production Management
  • Evaluating
  • Most essential function as link between control
    and future planning
  • Dispatching and Expediting are concerned with
    immediate issues, but valuable information
    gathered in the process with proper feedback
    mechanism is very useful for evaluation and hence
    for improvement in utilsation of methods and
    facilities
  • Must get its due attention as future profits
    depend on utilising best feedback for corrections

40
Production Management
  • Layout
  • Affects allocation of machines to perform given
    tasks
  • Important at design stage inselection of
    production processes
  • Rigid layout may hamper integration of additional
    equipment, lack of space or limited mobility of
    equipment
  • May have long transportation lines, increase
    production costs, WIP and cycle time
  • Restrictions imposed affect PPC.

41
Production Management
  • Simplification and Standardisation
  • Different types of materials and methods for
    production of different components, models or
    products
  • Leads to variety of materials at different stages
    bought outs, manufactured, sub
    assemblies/assemblies etc.
  • Also in processes tools, machines, jigs and
    fixtures etc.
  • Simplification and Standardisation aims at
    defining a limited variety of different types
    which can satisfy the basic requirements with
    higher plant efficiency
  • Joint responsibility of Design, Materials
    management, RD,PPC and others

42
Production Management
  • Time and Motion Study
  • Relates to efficient utilisation of manpoer and
    to scheduling problems.
  • Consists of Operation analysis and Work
    Measurement
  • Operation analysis/Method study
    Evaluation,selection and development of an
    efficient method for a given task
  • Work Measurement relates to establishing
    standard times for the various operations in the
    process of estimating function in production
    planning. Scheduling cannot be performed without
    such data.

43
Inventory Control
  • Importance of materials availability at various
    stages of production.
  • Inventory Control Stores Management
  • Complex Function
  • No over stocking
  • Finance
  • Obsolescence
  • Space etc

44
Inventory Control
  • No stock Outs
  • Loss of production,
  • Loss of business
  • Imbalances adding costs

45
Inventory Management
  • What is meant by Inventory?
  • Why inventory is necessary?
  • What are the various forms of the inventory?
  • What are the costs involved in inventories?
  • What are the risks associated with the
    inventories?

46
Materials Management
  • Importance
  • - Materials form major part of the
    Product cost 60 or so
  • - With contribution at say 15, every
    saved in materials is
  • equal to approx 4 increase in
    Sales.
  • - Has direct bearing on the
    profitability
  • - Timely and right quality of
    materials availability decides the
  • overall productivity of any
    organisation.
  • - Cannot afford too much or too
    little both dangerous for
  • survival and growth.

47
Materials Management
  • Functions
  • - Material Planning and controlling
  • - Purchasing/Vendor development
  • - Stores and inventory control

48
Inventory Management
  • Forms bulk of current assets.
  • Stock outs
  • - Loss of profit from the missed
    sales
  • - Loss of customer and good will
  • - Loss of production
  • - Reduced machine/men
    utilization
  • Excessive Inventory
  • - Inventory carrying costs
  • - Cost of storage
  • - Deterioration/obsolescence/pi
    lferage

49

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