Production Planning and Control

Nikhil R. Dhar, Ph. DProfessor, IPE Department

BUET

AEAS 409: PRODUCTION PLANNING AND CONTROL

Department of Industrial & Production Engineering

Course Outlines

Elements of Production Planning and Control Types of Production System Functions of Production, Planning and Control with an overview of different types

of manufacturing systems Factors affiliated with different fields of production including product

characteristics and economic analysisForecasting Methods and their Application Aggregate planning Master Production Scheduling (MPS) Material Requirement Planning (MRP) Coding and standardization Capacity planning Inventory Management-ABC analysis Production Scheduling Techniques-CPM and PERT and Line balancing

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Methods of Sales Forecasting Plant location and layout Work study and method study Plant performance measurement Introduction to product development and design Procedure for evaluation of materials and processes Advantages due to different types of scheduling of jobs on processors and methods

employedTypes of information systems and its benefits at different management levels Computers in production planning and control MRPII and JIT

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Suggested Reading

Operations Management-Strategy and Analysis-Lee, J. Krajewski and Larry, P. RitzmanProduction and Operations Management-A Life Cycle Approach - Richard B. Chose and Nicholas J. AquilanoElement of Production Planning and Control - Eilon SamuelIndustrial Engineering and Production Management–M. TelsangEngineering Management – A. K. GuptaProduction and Operations Management - S.N. Chary.Production Management-K. Aswathappa, Production and Operations Management-R. Panneerselvam,

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Nikhil R. Dhar, Ph.D.Department of IPE

BUET

LECTURE-01: PRODUCTION PLANNING & CONTROL

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Production Management

Production management is defined as management function which plans, organizes, coordinates, 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 program. These activities are being carried out in such a manner that Labor, Plant and Capital available are used to the best advantage of the organization.

The objectives of production management is stated as To produce goods or services of right quality and quantity at the predetermined time and pre-established cost. Thus the objective of production management are reflected in Right Quality Right Quantity Predetermined Time and Pre-established Cost (Manufacturing Cost)

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The objectives of production Management are: To produce goods and services as per the estimated manufacturing cost and

minimum inputs of resources. To produce right quality goods and services as per the established standards and

specifications. To produce goods and services as per the decided time schedule. Minimize the use of resources to the optimum level. These are 4 M‘s like

Machinery, Materials, Manpower and Money. These inputs are to be used to full extent to result minimum cost and time.

Maximize the utilization of manpower. Minimizing the total cost of production with continuous elimination of non-value

added activities and improving labor productivity on the production shop floor.

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5 P`s of Production Management Product: Product is the link between production and marketing. It is not enough

that a customer requires product but the organization must be capable of producing the product.

Plant: The plant accounts for major investment (fixed asset). The plant should match the needs of the product, market, the worker and the organization.

Processes: There are always number of alternatives methods of creating a product. But it is required to select the one of the best method which attains the objectives.

Programs: The program here refers to the time-table of production. Thus the program prepares schedules for purchasing, transforming, maintenance, cash and storage and transport.

People: Production depends upon people. The people vary in their attitudes, skill and expectations from the work. Thus, to make best use of available human resource, it is required to have a good match between people and jobs which may lead to job satisfaction.

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Scope of Production Management: There are two types of scope of Production Management:

Strategic Level: Design and Development of New Product Process Design and Planning Facilities Location and Layout Planning Design of Material Handling Capacity Planning

Operational Level: Production Planning Production Control Inventory Control Product maintenance & replacement Cost Control & Cost Reduction

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Production Planning & Control

Production planning and control (PPC) can be defined as the process of planning or deciding on the resources the firm will require for its future manufacturing operations and of allocating and time scheduling these resources to produce the desired products on time at the least total cost.

Production planning and control is most essential for any organization. Planning process within an organization is dynamic and continuous. PPC involves:

the planning of production a decision on the sequence of operations to achieve what has been planned the setting of starting and finishing time for production proper dispatching of the material and follow up action to check the progress of operations.

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Production Planning and Control

Material Requirement

Planning

Inventory Management

Demand Forecasting

Sales and Order Entry

Customer

Production

Inventory Vendors

Aggregate Planning

Shipping and

Receiving

Shop-floor scheduling and control

Production Control System

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Production ObjectivesHigh

Profitability

LowCosts

Low UnitCosts

High Throughput

Less Variability

High Utilization

LowInventory

QualityProduct

HighSales

Many products

Fast Response

MoreVariability

High Inventory

LowUtilization

ShortCycle Times

High CustomerService

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Need for Production Planning & Control

Production system can be compared to the nervous system with PPC as a brain. Production Planning and Control is needed to achieve:

Effective utilization of firms resources

To achieve the production objectives with respect to quality, quantity, cost and timeliness of delivery

To obtain the uninterrupted production flow in order to meet customers varied demand with respect to quality and committed delivery schedule.

To help the company to supply a good quality products to the customer on the continuous basis at competitive rates.

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Objectives of PPC Systematic planning of production activities to achieve the highest efficiency in

production of goods/services To organize the production facilities like machines, men etc., to achieve stated

production objectives with respect to quantity and quality, time and cost. Optimum Scheduling of resources Coordinate with other departments relating to production to achieve regular

balanced and uninterrupted production flow To conform to delivery commitments To be able to make adjustments due to changes in demand and rush orders.

Functions of PPC Forecasting to predict customer demand on various products over a given horizon. Aggregate Planning to determine overall resources needed. Materials Requirement Planning to determine all required components and timing. Inventory Management to decide production or purchase quantities and timing. Scheduling to determine shop-floor schedule of various components.

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Elements of PPC

Planning: It is the first element of production planning and control. Planning is deciding in advance what is to be done in future. An organizational set up is created to prepare plans and policies. Various charts, manuals and production budgets are also prepared. Planning provides a sound base for control. A separate department is set up for this work.

Routing: Routing is determining the exact path which will be followed in production. It is the selection of the path from where each unit have to pass before reaching the final stage. The stages from which goods are to pass are decided in this process. The following steps are taken for completing a routing procedure: Deciding what part to be made or purchased Determining Materials required Determining Manufacturing Operations and Sequences Determining of Lot Sizes Determining of Scrap Factors Analysis of Cost of the Product Preparation of Production Control Forms

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Scheduling: Scheduling is the determining of time and date when each operation is to be commenced or completed. The time and date of manufacturing each component is fixed in such a way that assembling for final product is not delayed in any way. Different types of scheduling is given below:

Master Scheduling: It is the breakup of production requirements. It is the start of scheduling. It is prepared by keeping in view the order or likely sales order in near future.

Manufacturing Scheduling: It is used where production process is continuous. The order of preference for manufacture is also mentioned in the schedule for a systematic production planning.

Detail Operation Scheduling: It indicates the time required to perform each and every detailed operations of a given process

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Dispatching: Dispatching is the transition from planning phase to action phase. In this phase, the worker is ordered to start manufacturing the product. Dispatching involves the actual granting of permission to proceed according to plans already laid down. In dispatching, orders are issued in terms of their priority. The dispatch section of the PPC is responsible for the following task: Checking the availability of material and then taking appropriate action to have it

transferred from the main stores to the point at which it is needed. Ensuring that all production aid is ready when needed and then having them issued

to manufacturing departments. Obtaining specific drawings from the drawing office. Informing the process section that production is commencing. At the conclusion of the manufacturing, ensure that all the drawings, layout and

tools are withdrawn and returned to their correct location.

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Following two procedures may be used for dispatching: Centralized Dispatching: Under this, orders are directly issued to workmen and

machines. It helps in exercising effective control. Decentralized Dispatching: Under this procedure all work orders are issued to the

foreman or dispatch clerk of the department or section. It suffers from difficulties in achieving co-ordination among different departments.

Follow Up & Expediting: Follow up or expediting is that branch of production control procedure which regulates the progress of materials and part through the production process. Progress may be assessed with the help of routine reports or communication with operating departments. The follow up procedure is used for expediting and checking the progress.

Inspection: Inspection is the process of ensuring whether the products manufactured are of requisite quality or not. Inspection is undertaken both of products and inputs. It is carried on at various levels of production process so that pre-determined standards of quality are achieved. Inspection ensures the maintenance of pre-determined quality of products.

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Areas of Production Planning Preparation of production budget Devising manufacturing methods and sequence of operations Deciding type of machines and equipments Preparation of operation sheets and instruction cards Estimating men, machine and material requirements Undertaking time and motion studies Preparing master schedules

Need or Importance of PPCProduction planning and control is important for the following reasons:

For Increasing Production: Main purpose of production planning is to arrange inputs. Production control programme minimizes idleness of men and machines. It thus helps in raising industrial output.

For coordinating plant activity: In planning production is carried out in a number of processes and thus activities are synchronized for smooth working.

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Limitations of PPC

Following are the limitations faced by production planning and control: Based on Assumptions: Production planning and control is based on certain

assumptions. In case the assumptions prove correct, the planning and control will go smoothly. But if they go wrong, process of planning and control will go weak.

Rigidity: Under production planning and control, there is rigidity in the behavior of employees and it may not help in smoothening flow of work.

Difficult for small firms: This process is time consuming and therefore not affordable for small firms

Costly: It is a costly device as its implementation requires separate persons to perform functions of planning, expediting, dispatching etc.

Dependence on External Factors: External factors like natural calamities, change in technology, government controls etc reduce effectiveness of production planning.

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Benefits of Production Planning and Control Higher quality Better resource utilization and reduced inventory Reduced manufacturing cycle time Faster delivery Better customer services Lower production costs and Lower capital investment Higher customer service Improved sales turnover Improved market share Improved profitability Flexibility Dependability Lower prices

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BUET

LECTURE 02:FORECASTING METHODS


Forecasting

Forecasting plays a crucial role in the development of plans for the future. It is essential for the organizations to know for what level of activities one is planning before investments in input, i.e. men, machines and materials be made. Before making an investment decision, many questions will arise like:

What should be the size or amount of capital required? How large should be the size of the work force? What should be the size of the order and safety stock? What should be the capacity of the plant?

The answers to the above questions depends upon the forecast for the future level of operations.

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Need for Forecasting: Majority of the activity of the industries depend upon the future sales Projected demand for the future assists in decision-making with respect to

investment in plant and machinery, market planning and programs To schedule the production activity to ensure optimum utilization of plant’s capacity To prepare material planning to take up replenishment action to make the materials

available at right quantity and right time To provide an information about the relationship between demand for different

products in order to obtain a balanced production in terms of quantity required of different products as a function of time

Forecasting is going to provide a future trend which is very much essential for product design and development

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Forecasting in Action: Forecasts are made to guide decisions in a variety of fields. Operations planning and Control: Firms use forecasts to decide what to produce,

when to produce and where to produce. Marketing: Pricing decisions, distribution path decisions, and advertising

expenditure decisions all rely heavily on forecasts of responses of sales to different marketing schemes.

Economics: The forecast of the major economic variables, such as unemployment, consumption, investment, the price level, and interest rates are used for governments to guide monetary and fiscal policy. Private firms use them for strategic planning, because economy-wide economic fluctuations typically have industry-level and firm-level effects.

Financial speculation: Speculators in asset markets have an interest in forecasting asset returns (stock returns, interest rates, exchange rates, ...). Such forecasts are made routinely. Are these forecasts successful???

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Financial risk management: Volatility forecasts are crucial for evaluating and insuring risks associated with asset portfolios. Volatility forecasts are also crucial for firms and investors who need to price assets such options and other derivatives.

Capacity planning: Capacity planning decisions rely heavily on a variety of forecasts related both to product demand and supply.

Business and government planning: Business and governments of all sorts must constantly plan and justify their expenditures. A major component of the budgeting process is the revenue forecast.

Demography: Population forecasts are crucial for planning government expenditure on health care, infrastructure, social insurance, antipoverty programs, and so forth.

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Time Horizons for Strategic Decisions Long Term Decisions

Locating and Sizing New FacilitiesFinding New Markets for ProductsMission Statement: meeting quality objectives

Intermediate Term Decisions Forecasting Product DemandDetermining Manpower NeedsSetting Channels of DistributionEquipment Purchases and Maintenance

Short Term DecisionsPurchasingShift SchedulingInventory Control

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Aggregate Planning

Aggregate Planning may be defined as Intermediate Planning, which is normally done for a period of up to one year’s time. The word Aggregate symbolizes that the planning is done at the broadest level.

Aggregate Planning Process Sales forecast for each product: the quantities to be sold in each time period (weeks,

months, or quarters) over the planning horizon (6 -18 months) Total all the individual product or service forecasts into one aggregate demand Transform the aggregate demand for each time period into production resource

requirements (workers, materials, machines, etc.) Develop alternative resource plans to support the cumulative aggregate demand and

compute the cost for each. Select the best alternative which satisfies aggregate demand and best meets the

organization’s objectives

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Goals for Aggregate Planning: There are number of goals to be satisfied – It has to provide the overall levels of output, inventory and backlogs Proper utilization of the plant capacity. The aggregate plan should be consistent with the company’s goals and policies

regarding its employee Make sure enough capacity available to satisfy expected demand

Aggregate Planning Strategies Use inventories to absorb changes in demand Accommodate changes by varying workforce size Use part-timers, overtime, or idle time to absorb changes Use subcontractors and maintain a stable workforce Change prices or other factors to influence demand

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Aggregate Planning Options

Capacity based Options: Changing inventory levels

Increase inventory in low demand periods to meet high demand in the futureIncreases costs associated with storage, insurance, handling, obsolescence, Shortages can mean lost sales due to long lead times and poor customer service

Varying workforce size by hiring or layoffsMatch production rate to demandTraining and separation costs for hiring and laying off workers New workers may have lower productivityLaying off workers may lower morale and productivity

Varying production rate through overtime or idle timeAllows constant workforceMay be difficult to meet large increases in demandOvertime can be costly and may drive down productivityAbsorbing idle time may be difficult

Using part-time workersUseful for filling unskilled or low skilled positions, especially in services

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SubcontractingTemporary measure during periods of peak demandAssuring quality and timely delivery may be difficultExposes your customers to a possible competitor

Demand based Options: Influencing demand

Use advertising or promotion to increase demand in low periodsAttempt to shift demand to slow periodsMay not be sufficient to balance demand and capacity

Back ordering during high- demand periodsRequires customers to wait for an order without loss of goodwill or the orderMost effective when there are few if any substitutes for the product or serviceOften results in lost sales

Counterseasonal product and service mixingDevelop a product mix of counterseasonal itemsMay lead to products or services outside the company’s areas of expertise

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Aggregate Planning Options

Option Advantages DisadvantagesSome

CommentsChanging inventory levels

Changes in human resources are gradual or none; no abrupt production changes

Inventory holding cost may increase. Shortages may result in lost sales.

Applies mainly to production, not service, operations

Varying workforce size by hiring or layoffs

Avoids the costs of other alternatives

Hiring, layoff, and training costs may be significant

Used where size of labor pool is large

Varying production rates through overtime or idle time

Matches seasonal fluctuations without hiring/ training costs

Overtime premiums; tired workers; may not meet demand

Allows flexibility within the aggregate plan

Sub-contracting Permits flexibility and smoothing of the firm’s output

Loss of quality control; reduced profits; loss of future business

Applies mainly in production settings

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Option Advantages Disadvantages Some CommentsUsing part-time workers

Is less costly and more flexible than full-time workers

High turnover/ training costs; quality suffers; scheduling difficult

Good for unskilled jobs in areas with large temporary labor pools

Influencing demand

Tries to use excess capacity. Discounts draw new customers.

Uncertainty in demand. Hard to match demand to supply exactly.

Creates marketing ideas. Overbooking used in some businesses.

Back ordering during high-demand periods

May avoid overtime. Keeps capacity constant.

Customer must be willing to wait, but goodwill is lost.

Allows flexibility within the aggregate plan

Counter-seasonal product and service mixing

Fully utilizes resources; allows stable workforce

May require skills or equipment outside the firm’s areas of expertise

Risky finding products or services with opposite demand patterns

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Aggregate Planning

Master production schedule and MRP

systems

Detailed work schedules

Process planning and

capacity decisions

Aggregateplan for

production

Product decisions

Demand forecasts,

orders

Marketplace and

demand

Researchand

technology

Raw materials available

Externalcapacity

(subcontractors)

Workforce

Inventoryon

hand

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Master Production Schedule (MPS)

Master Production Schedule (MPS)–States the requirements for individual end items by date and quantity. It represents what the company plans to produce expressed in specific configurations, quantities and dates. The MPS is not a sales forecast that represents a statement of demand. The MPS must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity and management policies and goals. The main functions of PMS are:

To translate aggregate plans into specific end items Evaluate alternative schedule Generate material requirement Generate capacity requirements Facilitate information processing Effective utilization of capacity

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Scope of Master Production Schedule

Breaks down, or disaggregates, the production plan into product families: The production plan is broken into product families for the MPS and production is planned based on demand forecasts provided by marketing.

Promotes valid order promises: Order promises can be made against planned production. This job falls to marketing and is referred to as “consuming” the Inventory.

Provides a communication medium between Marketing/Sales and Operations: When more product has been promised than will be produced, marketing and operations must work together to develop a strategy to meet customer requirements. This can take the form of many options including; subcontract, allow overtime, increase capacity through equipment acquisition, expand facilities, increasing staffing, etc…

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Proactively control ability to deliver goods to customers: The MPS allows for better understanding of capacity and gives visibility to capacity shortfalls. This allows action to be taken to meet demand or prioritize customer orders ahead of time.

Resource availability control: Understanding future capacity shortfalls creates the ability to plan the best uses of resources or increase resources if needed.

Proactively control inventory levels: MPS gives a firm the ability to not rely on safety stock or “reactive” Economic Order Quantity (EOQ) models.

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Aggregate Planning and Master Scheduling

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Materials Requirements Planning

Materials Requirements Planning (MRP) is a system that controls inventory levels, plans production, helps supply management with important information and helps with the manufacturing control system with respect to the production of assembled parts.

Materials Requirement Planning (MRP) is a technique for determining the quantity and timing for the acquisition of dependent demand items needed to satisfy master production schedule requirements.

There are certain environments or situations in which it is better and more efficient to use MRP. These environments and situations are as follows.

Job Shop Production

Complex Products

Assemble-to-Order Environments

Discrete and Dependent Demand Items

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MRP Objectives: Inventory reduction: MRP determines how many components are required, when

they are required in order to meet the master schedule. It helps to produce the materials/components as and when needed and thus avoid excessive build up of inventory.

Reduction in the manufacturing and delivery lead times: MRP identifies materials and component quantities, timings when they are needed, availabilities and procurements and actions required to meet delivery deadlines. MRP helps to avoid delays in production and priorities production activities by putting due dates on customer job order.

Realistic delivery commitments: by using MRP, production can give marketing timely information about likely delivery times to prospective customers.

Increased efficiency: MRP provides a close coordination among various work centers and hence helps to achieve uninterrupted flow of materials through the production line. This increases the efficiency of production system.

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Steps of MRP Step-1: Identifying Requirements

Quantity on HandQuantity on Open Purchase OrderQuantity in/or Planned for ManufacturingQuantity Committed to Existing Orders and Quantity ForecastedCompany Sensitive, Location Sensitive and Date Sensitive

Step-2: Running MRP – Creating the SuggestionsCritical Items: Critical items are items of immediate importance that should be taken care of right away. Expedite Items: Expedite items are items that need to be sped up so that it is completed in less than the normal lead time. Delay Items: Delay items are item that are not of vital importance and can be delayed for the benefit of other items.

Step-3: Firming the SuggestionsManufacturing OrdersPurchasing OrdersVarious Reports

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Overview of the MRP SystemProduct Structure

FileMaster Production

Schedule

Material Requirements

Planning

Manufacturing Orders Purchase Orders Various Reports

The Orange boxes indicate the inputs into the MRP system. The MRP system then processes the information and delivers outputs as indicated by the yellow boxes.

Inventory Master File

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MRP Inputs: Product Structure File: The product structure file contains a bill of material (BOM) for

every item produced. In other words, this file contains all the component parts for a larger item. For example if you are producing a car, the component parts for the car would be the screws, steel, rubber, and so on. Not only does the product structure contain all the component parts, it also supplies information for in which order the product is to be assembled. The MRP system accesses the product structure file to determine which component items need to be scheduled.

Master Production Schedule: The master production schedule specifies which end items or finished products the company is to produce, how many are needed, and when they are needed. The numbers that are on the master production schedule represent production, not demand, may be a combination of customer orders and demand forecasts, and gives what needs to be produced.

Inventory Master File: This file includes all the numbers from inventory. The MRP system keeps track of your inventory and when more items need to be ordered. It is important that you inventory numbers are accurate from the beginning in order for the MRP system to work properly. It includes (i) On-Hand Quantities, (ii) On-Order Quantities, (iii) Lot Sizes, (iv) Safety Stock, (v) Lead Time and (vi) Past-Usage Figures

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MRP Process: During the process, the system uses an MRP matrix to record the calculations that

are made. From the inputs discussed earlier in the presentation, the system calculates the gross requirements, scheduled receipts, projected on hand, net requirements, planned order receipts, and planned order releases.

MRP Outputs: Manufacturing Orders Purchasing Orders Various ReportsThe MRP system delivers two main outputs along with various other reports. The two main outputs are manufacturing orders which can be released to shop floors for in-house production and purchasing orders which are sent to outside suppliers. The various reports offer suggested changes in previous plans or existing schedules.

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Just-In-Time (JIT)

If you think about someone's journey to work, they could leave the house just-in-time to cycle to the train station, just-in-time to catch their train, which would get them to their place of work just-in-time, allowing them to be at their desk just-in-time to start work. In engineering, using the just-in-time theory would allow the components that are needed to produce a product to be delivered to the worker, just-in-time.The products can then be made available for the customers just-in-time.This process allows for all types of stock, including materials and finished products, to be eliminated.Implementing a just-in-time structure can mean a company is adopting a lean production system.

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Seven Wastes

Shigeo Shingo, a Japanese JIT authority, identifies seven wastes as being the targets of continuous improvement in production processes.

Waste of overproduction: Eliminate by reducing set-up times, synchronizing quantities and timing between processes, layout problems. Make only what is needed now.

Waste of waiting: Eliminate bottle necks and balance uneven loads by flexible workforce and equipment.

Waste of transportation: Establish layouts and locations to make handling and transport unnecessary if possible. Minimize transportation and handling if not possible to eliminate.

Waste of processing itself: Question regarding the reasons of existing of the product and then why each process is necessary.

Waste of stock: Reducing all other waste reduce stocks. Waste of motion: Study motion for economic and consistency. Economic improves

productivity and consistency improves quality. First improve the motions, then mechanize or automate. Otherwise, there is a danger of automating the waste.

Waste of making defects products: Develop the production process to be prevent defects from being produced, so as to eliminate inspection. At each process, do not accept defects and make no defects. A quality process always yields quality product.

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When is JIT a suitable system to use?

JIT is a suitable production system when: The engineering manufacturer has a standard product that is steadily produced in

practical amounts. The product is of high value. The workforce producing the product is a disciplined one. Flexible working practices are maintained. Machinery does not demand lengthy set up times. Quality can be guaranteed through either a cost penalty for defects or good working

practices.

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A Just-In-Time Illustration

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Characteristics of JIT operations

The JIT concept is most applicable to manufacturing operations that produce a relatively small number of different products.Product demand must be reasonably predictable, and requirements must be generated accurately. A closed loop MRP system can be used to do this, but typically the master production schedule must be smoothed on a daily basis.Statistical process control typically is used in both the buyer's and suppliers' organizations to ensure tight control of material and production quality. This is vital to the functioning of the low-float, small-volume, relatively smooth-flowing operation.Production operation setup requirements must be able to be reduced to relatively short times. Most firms target for tool changes and equipment setups of less than ten minutes. Without this capability, small-batch and smooth-flow production of different models or different products cannot be accomplished efficiently. Purchasing must be able to reduce materials replenishment lead times. This usually is accomplished by reducing the four major elements of lead time-internal paperwork and ordering time, supplier queue and manufacturing time, transportation time requirements, and incoming receiving and inspection requirements.

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Advantages of using a JIT system

The most significant benefit of JIT is to improve the responsiveness of the firm to the changes in the marketplace thus providing an advantages in competition. The advantages are: Products are of a better standard. Less waste and, in turn, less rework. Set up times are reduced. Production flow is improved. Less stock. Overall savings. Efficiency is increased. Relations with suppliers are enhanced.

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BUET

LECTURE 03: PLANT LOCATION & PLANT LAYOUT


Plant Location

Site selection is an important activity as it decides the fate of the business. A good location will reduce the cost of production &distribution to a large extent. The reduction of cost of distribution helps in elevating either the competitive strength or the profit margin of business.

Locating of business involves large & relatively permanent investment. If the site selection is not done properly, all the money spent on factory building, machinery & their installation will go in waste & the owner has to suffer great loss.

Therefore the site for factory should be selected very carefully. While selecting a site it is necessary to consider technical, commercial, &financial aspects & then select a site that may provide maximum profit.

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Steps in Choosing Location:

National DecisionNational Decision

Regional DecisionRegional Decision

Community DecisionCommunity Decision

Site DecisionSite Decision

Political, social, economic stability;Currency exchange rates; . . . . .

Climate; Customer concentrations;Degree of unionization; . . . . .

Transportation system availability;Preference of management; . . . . .

Site size/cost; Environmental impact; Zoning restrictions; . . . . .

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Plant Location Problems:Selection of a General Territory (or Region): This refers to the selection of a particular geographical zone or state taking into consideration such factors as nearness to market and sources of raw materials, basic infrastructure facilities available, climate conditions and taxation and laws.Selection of a Community: This refers to the selection of the specific locality within the selected region. The factors that influence the selection of community are, availability of labor, community attitude, social structure and service facilities. Generally the following alternatives are available: Urban area Rural area and Semi-urban area

Selection of Specific Site: This refers to the selection of specific site within the community. The factors that influence the site selection are the cost of the land, availability and suitability of the land. The type of the manufacturing process may dictate the site selection. The conditions that govern the particular types of community are as follows:

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Condition that demand Urban location: Highly skilled labor requirementsManufacturing depends on urban utilitiesExcellent communication and transportation facilityConcentrated suppliers

Conditions that demand Sub-urban locationSemi-skilled or female workforce requiredLarge space availability for future expansionCommunity close to large population center

Conditions demanding rural locationLarge site required for future expansionRequirement of unskilled laborManufacturing process is dangerous and objectionableLow wage structureLower property tax rates and Lower cost of land.

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Advantages and Disadvantages of Urban, Suburban and Rural Locations:Suburban AreaAdvantages: Land available at cheaper rate compared to urban location Infrastructure facilities are developed by promotional agencies Because of nearness to city availability of the skilled manpower Educational, medical facilities are available because of nearness to city

Disadvantages: Due to concentration the suburban area will become crowdy and will become urban

in turn within short period High mobility of workers and hence higher labor turnover Government incentive and subsides to promote industries.

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Urban AreaAdvantages: Excellent communication network Good transportation facilities for material and people Availability of skilled and trained manpower Factory in the vicinity of the market hence high local demand Excellent sourcing (subcontracting) facilities Good educational, recreational and medical facilities Availability of service of consultants, training institute and trainers

Disadvantages: High cost of land compare to rural area Sufficient land is not available for expansion Labor cost is high due to high cost of living Industrial unrest due to trade union activities Management labor relations are much influenced by union activities Municipal and other authority restrictions on building etc. and high labor turnover

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Rural AreaAdvantages: Cheaper and ample availability of site Cheaper labor rates Less turnover of labors because of limited mobility No municipal restrictions Good industrial relations Scope for expansion and diversification No slums and environmental pollution

Disadvantages: Poor transportation network No good communication facilities Sourcing of components and materials should be from outside Far away from market High absenteeism during harvest season No educational, medical and recreational facilities.

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Factors Affecting Plant Location : Availability of raw material Nearness to the potential market Near to the source of operating requirements like electricity, disposal of waste,

drainage facilities. Supply of labor Transport & communication facilities Integration with other group of companies Suitability of land & climate Availability of housing, other amenities & services Local building & planning regulations Safety requirements Others like low interest on loans, special grants, living standards

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Selection of the Site for the Factory: There are many analytical techniques that can be used in facility location decision. Some of these are:

Methods of Factor Rating: In factor rating method, first we must identify the most important factors in evaluating alternative sites for the new facility. Then we should assign a weight between 0 and 100 to each of these factors. Each alternative location will then be rated based on these factor weights. The most weighted alternative is selected as the best alternative.Cost-Profit-Volume Analysis: When the fixed and variable costs for each site differ, Cost-profit-volume analysis can be used to identify the location with the lowest cost.Center of Gravity Method: The center of gravity method is used to find a location that minimizes the sum of transportation cost in between new facility and old facilities. Transportation cost is assumed to be a linear function of the number of units shipped and the traveling distance.Transportation and Simulation Models: A special form of linear programming, that is Transportation Model, can be used to compare the total transportation cost associated with each alternative site.

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Recent Trends in Plant Location: Priority for sub-urban areas Industrial development in notified backward areas Establishment of Industrial estate Decentralization of industries Increased role of government in the decision of location of industries Competition between Government & Industries

Backward Area and Industrial Policy: In the facilities location problems, the industrial policies of the governments are very important inputs in the overall consideration. In India, the industrial development of backward areas for balanced regional development of the country has always been emphasized. This has been attempted mainly through: Licensing policy and investment subsidy Location of public sector projects Concessional finance and concession on income tax import duty etc and Setting up of industrial estates (property consisting of much land )

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Global Locations: World-wide locations are called global locations. Multinational Company (MNC) are setting up their branches in India & Indian companies are extending their operations in other countries like - USA, EUROPE, CHINA.

Virtual proximity: Social networking at a distance with the advances in telecommunications technology , a firm can be in virtual proximity to its customers.

Virtual Factory: Many firms based in USA and UK - in the service sector and in the manufacturing sector - often outsource part of their business processes to foreign locations such as India. Thus, instead of one's own operations, a firm could use its business associates' operations facilities. In a way, the Indian BPO firm is that foreign-based company's 'virtual service factory'. So, one's business associate's operations facilities is called virtual factory.

Reasons for a Foreign Location: Reaching the Customer

One obvious reason for locating a facility abroad is that of capturing a share of the market expanding worldwide.

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Tangible ReasonsThe host country may have/offer substantial tax advantages compared to the home country.The costs of manufacturing and/or running operations may be substantially less in that foreign country. This may be due to (i) low labor cost, (ii) low raw material cost and (iii) better availability of inputsThe company may overcome the tariff (table of fixed charges) barriers by setting up a manufacturing plant in foreign country rather than exporting the items to that country.

Customer-related reasonsfirm’s customer may feel secure that firm is more accessible.Firm may be able to give a personal touch.Firm may understand customer’s requirements better.It may discover other potential customers in abroad.

Organizational learning related reasonsFirm can learn advanced technologyFirm can learn from its customers abroadIt can also learn from its competitors operating in abroad.It may also learn from its suppliers abroad.

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Plant layout

Plant layout is the physical arrangement of industrial facilities. It involves the allocation of space & the arrangement of equipment in such a manner that overall operating costs are minimized.

D D

D D

G G

G G

G G

M M

M M

M M

A A

A A

L

L L

L L

L L

L

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Objectives of Plant Layout Economies in materials, facilitate manufacturing process & handling of semi-

finished & finished goods. Proper & efficient utilization of available floor space. To avoid congestion & bottlenecks. Provision of better supervision & control of operations. Careful planning to avoid frequent changes in layout which may result in undue

increase in cost of production. To provide adequate safety to the workers from accidents. To meet the quality & capacity requirements in the most economical manner. Provision of medical facilities & cafeteria at suitable & convenient places. To provide efficient material handling system. To suggest the improvements in production process & work methods.

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Principles of Plant Layout Principle of integration (of 5M’s) Principle of minimum distance Principle of cubic space utilization( both horizontal & vertical space). Principle of flow( must be forward no backtracking) Principle of maximum flexibility Principle of safety, security & satisfaction Principle of minimum handling.

Types of plant layout Product layout Process layout Group layout Fixed Product layout

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Product layout: Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow. Here machines are arranged according to the needs of product & in the same sequence as the operations are necessary for manufacture

Drill Grind Drill

Lathe

Drill

Drill

Storage

Warehouse

Assembly

Lathe

Bend

Lathe

Mill

Press

Drill

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Advantages of Product Layout High rate of output Low unit cost Labor specialization Low material handling cost High utilization of labor and equipment Established routing and scheduling Short processing time

Disadvantages of Product Layout Creates dull, repetitive jobs Poorly skilled workers may not maintain equipment or quality of output Fairly inflexible to changes in volume Highly susceptible to shutdowns Needs preventive maintenance Require large capital investment

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Process layout: Layout that can handle varied processing requirements. Here all machines performing similar type of operations are grouped together at one location in the process layout. Thus here facilities are grouped together according to their functions. E.g. all drilling machines are located at one place known as drilling section.

Lathe Drill Weld

Mill

Drill

Grind

Storage

Warehouse

Lathe

Lathe

Mill

Mill

Lathe

Mill

Paint

Grind

Assembly

Assembly

Paint

Weld

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Advantages of Process Layouts Can handle a variety of processing requirements Machines breakdown doesn’t result in shutdown. Equipment used is less costly Wide flexibility in production facilities. Each production unit of system works independently. High utilization of facilities Variety makes the job interesting.

Disadvantages of Process Layouts In-process inventory costs can be high Challenging routing and scheduling Equipment utilization rates are low Material handling is slow and inefficient & is more. More space is required and longer processing time Back tracking may occur.

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Comparison of Product and Process LayoutFactors Product layout Process layout

Nature Sequence of facilities Similar are group together

Machines utilization Not to full capacity Better utilization

Product standardized diversified

Processing time less more

Material handling less more

Inventory High work-in-process inventory Low work-in-process inventory

Breakdown Can’t tolerate Can tolerate

Production centre simple complex

Flexibility low high

Floor space Requires less more

Investment high low

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Group layout: There is a trend now to bring an element of flexibility into manufacturing system as regards to variation in batch sizes and sequence of operations. A group of equipment for performing a sequence of operations on family of similar components or products has become all the important. The application of group technology involves two basic steps, first step is to determine component families or group. The second step in applying group technology is to arrange the plants equipment used to process a particular family of components. This represents small plants within the plants.

Drill Grind Assembly

Drill

Weld

Assembly

Storage

Warehouse

Lathe

Assembly

Grind

Press

Mill

Lathe

Paint

Drill

Drill

Press

Grind

Assembly

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Advantages of Group Layouts By grouping, higher machine utilizations Smoother flow lines and shorter travel distances Team spirit and job enlargement

Disadvantages of Group Layouts Greater labor skills for team Balancing individual cells Unbalanced flow may result in work-in-process

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Fixed Product layout: This is also called the project type of layout. In this type of layout, the material, or major components remain in a fixed location and tools, machinery, men and other materials are brought to this location. This type of layout is suitable when one or few pieces of identical heavy products are to be manufactured and when the assembly consists of large number of heavy parts, the cost of transportation of these part is very high.

Lathe Press Grind

Weld AssemblyPaint

Storage

Warehouse

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Advantages of Fixed Product Layouts Reduced material moves Highly flexible Job enrichment Promotes pride & quality Responsibility

Disadvantages of Fixed Product Layouts Personel-equipment moves Equipment duplicates Greater skill Close control& coordination Increased space & greater work-in-process

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High

Medium

Low

Low Medium High

Product Planning Department

Fixed Materials Location Planning Department

Process Planning Department

Product Family Planning Department

Product Layout

Fixed Layout

Group Layout

Process Layout

Volume

Variety

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Material Flow Pattern

The pattern of material flow is an important consideration in the plant layout decision because good layout aims at minimizing the flow of materials. The flow pattern of materials helps in eliminating bottle-necks, rushing and backtracking and ensures good supervision and control. The material flow systems can be classified on the basis of the availability of floor space as

Horizontal flow system: Usually devised for a single story building when the flat floor area is available

Vertical flow system: This system is used in case of multi-storey buildings and limited area is available.

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Different Flow Pattern

Straight line: Shortest route and must have roads on both sides Plant area has long length and narrow width Unsuitable for longer production lines

U-type:Less difficulty in returning empty containers'Suitable for longer production linesRequires square like floor areaOne side road link will be required

Straight Simplest. Separate receiving/shipping crews

U flow Very popular. Combine receiving /shipping. Simple to administer

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Serpentine (inverted S-shaped): Requires roads on both sides Suitable for longer production lines Difficulty in returning empty containers Requires square like floor area.

Serpentine When line is too long

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Plant Layout Procedure

Analyze the product or products to be produced.Determine the process required to manufacture the product.Prepare layout planning charts. Flow process, including operations, transportation, storage, and inspections. Standard times for each operation. Machine selection and balance. Manpower selection and balance. Material handling requirements.

Determine workstations.Analyze storage area requirements.Establish minimum aisle widths.Establish office requirements.Consider personnel facilities and services.Survey plant services.Provide for future expansion.

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Factors Affecting Plant Layout

Nature of product- e.g. some products need air-conditioned plants.Size of output-

For bulk-product/line layout For small-functional layout

Nature of manufacturing system-For intermittent-functional layout For continuous-product/line layout

Localization of plant- e.g. there will be different transportation arrangement if site is located near railway line.Machines or equipment- e.g. heavy machines need stationary layoutClimatic conditions, need of light, temperature also affect design of layout.

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BUET

LECTURE 04: PROJECT SHEDULING & CONTROL

TECHNIQUES


Project

A project is a temporary endeavor involving a connected sequence of activities and a range of resources, which is designed to achieve a specific and unique outcome and which operates within time, cost and quality constraints and which is often used to introduce change.

Characteristic of a project A unique, one-time operational activity or effort Requires the completion of a large number of interrelated activities Established to achieve specific objective Resources, such as time and/or money, are limited Typically has its own management structure Need leadership

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Scheduling the ProjectPlanning, budgeting and scheduling are all part of the same process

Planning a project, developing a budget for it, and scheduling all the of the many tasks involved are not easily separable

Budget must include both the amounts and timing of the resources received or expanded

One cannot prepare a budget without knowing the specifics of each task and the time periods during which the task must be undertaken.

Similarly, a project action implies a schedule just as a schedule implies a plan. CPM (Critical Path Method), PERT (Program Evaluation and Review Technique)

and Gantt Chart

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Language of Scheduling

Activity task or set of tasks use resources

Event state resulting from completion of one or more activities consume no resources or time predecessor activities must be completed

Network diagram of nodes and arcs used to illustrate technological relationships

Path series of connected activities between two events

Critical Path set of activities on a path that if delayed will delay completion of project

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Building the Network

Building the Network Activity-on-Node (AON) Network

Usually associated with CPM Activity-on-Arrow (AOA) Network

Usually associated with PERT

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Situations in Network Diagram

A B

C

A must finish before either B or C can start

A

BC both A and B must finish before C can start

D

B

C

Aboth A and C must finish before either of B or D can start

A

C

B

D

Dummy A must finish before B can startboth A and C must finish before D can start

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Building the Network: AON

Task Predecessor a -b -c ad be bf c, dg e

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Building the Network: AOA

Task Predecessor a -b -c ad be bf c, dg e

Dummy Activity126/89


Critical Path Method (CPM)

Path: A connected sequence of activities leading from the starting event to the ending eventCritical Path: The longest path (time); determines the project durationCritical Activities: All of the activities that make up the critical path

Forward Pass Earliest Start Time (ES): earliest time an activity can start, ES = maximum EF of

immediate predecessors Earliest finish time (EF): earliest time an activity can finish, EF= ES + t

Backward Pass Latest Start Time (LS): Latest time an activity can start without delaying critical path

time , LS= LF - t Latest finish time (LF): latest time an activity can be completed without delaying

critical path time, LS = minimum LS of immediate predecessors

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Example: Consider the list of four activities for making a simple product:

Activity Description Immediate Predecessor Expected Time (min)

A Buy Plastic Body - 180B Design Component - 30C Make Component B 20D Assemble product A,C 60

1 3 4

2

A

B C

D

Arcs indicate project activities

Nodes correspond to the beginning and ending of

activities

Solution :

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Example: Develop the network for a project with following activities and immediate predecessorsActivity A B C D E F G

Immediate Predecessors - - B A, C C C D, E,F

Solution :1 3 4

2

A

B

C

D

5

E7

6F

G

dummy

Note how the network correctly identifies D, E, and F as the immediate predecessors for activity G. Dummy activities is used to identify precedence relationships correctly and to eliminate possible

confusion of two or more activities having the same starting and ending nodes Dummy activities have no resources (time, labor, machinery, etc)–purpose is to PRESERVE

LOGIC of the network

We need to introduce a dummy activity

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Examples of the use of dummy activity

1

1

2

Activity c not required for e

a

b

c

d

e

a

b

c

d

e

WRONG!!! RIGHT

Dummy

RIGHT

Network concurrent activities

1 2 1

2

3

a

WRONG !!!

a

b b

WRONG !

RIGHT

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Example: Draw the network for the following relationships:Activity C can be performed at the same time as E; but D cannot be started unless both C and A are completed; A and B can be performed simultaneously, B has also constraint on activity C and E both D and E should be completed before the objective is achieved.

Example: In a program consisting of five activities, the constraints determined are as under. Draw the network.

ED EB

DC BC DA BA

Solution :

dummy activity

Solution :

A

B

C

D

E

AB

CD

E

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Example: Develop the network for a project with following activities and immediate predecessors. Construct the network and find the critical path.

Solution:

Activity a b c d e f g h i j

Immediate Predecessors - - - b c a a f g d, e

Completion Time 6 8 5 13 9 15 17 9 6 12

a, 6

f, 15

b, 8

c, 5e, 9

d, 13

g, 17 h, 9

i, 6

j, 12

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ES and EF Times

a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5

e, 9e, 9

d, 13d, 13

g, 17g, 17 h, 9h, 9

i, 6i, 6

j, 12j, 12

0 6

0 8

0 5

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ES and EF Times

a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5

e, 9e, 9

d, 13d, 13

g, 17g, 17 h, 9h, 9

i, 6i, 6

j, 12j, 12

0 6

0 8

0 5

5 14

8 21

6 23

6 21

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ES and EF Times

a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5

e, 9e, 9

d, 13d, 13

g, 17g, 17 h, 9h, 9

i, 6i, 6

j, 12j, 12

0 6

0 8

0 5

5 14

8 21 21 33

6 23 21 30

23 29

6 21

Project’s EF = 33

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LS and LF Times

a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5

e, 9e, 9

d, 13d, 13

g, 17g, 17

h, 9h, 9

i, 6i, 6

j, 12j, 12

0 6

0 8

0 5

5 14

8 21 21 33

6 23

21 30

23 29

6 21

21 33

27 33

24 33

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LS and LF Times

a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5

e, 9e, 9

d, 13d, 13

g, 17g, 17

h, 9h, 9

i, 6i, 6

j, 12j, 12

0 6

0 8

0 5

5 14

8 21 21 33

6 23

21 30

23 29

6 21

3 9

0 8

7 12

12 21

21 33

27 33

8 21

10 27

24 33

9 24

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a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5

e, 9e, 9

d, 13d, 13

g, 17g, 17

h, 9h, 9

i, 6i, 6

j, 12j, 12

0 6

0 8

0 5

5 14

8 21 21 33

6 23

21 30

23 29

6 21

3 9

0 8

7 12

12 21

21 33

27 33

8 21

10 27

24 33

9 24

3 4

3

3

4

0

0

7

7

0

Float

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Critical Path

a, 6a, 6

f, 15f, 15

b, 8b, 8

c, 5c, 5

e, 9e, 9

d, 13d, 13

g, 17g, 17 h, 9h, 9

i, 6i, 6

j, 12j, 12

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Activity A B C D E F G H I J

Immediate Predecessors - A B G D A C,F D A D,I

Duration 90 15 05 20 21 25 14 28 30 45

Solution:B

F

C

A

I

E

DG H

J

B, 15

F, 25

C, 05

A, 90

I, 30

E, 21

D, 20G, 14 H, 28

J, 45

90,10595,110

0, 900, 90

90,11590,115

90,120119,149

105,110110,115

115,129115,129

129,149129,149

149,170173,194

149,177166,194

149,194149,194

90,10595,110

0, 900, 90

90,11590,115

90,120119,149

105,110110,115

115,129115,129

129,149129,149

149,170173,194

149,177166,194

149,194149,194

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Example: Task. A project has been defined to contain the following list of activities along with their required times for completion. Construct the network and find the critical path.

Activity 1 2 3 4 5 6 7 8Immediate Predecessors -- 1 1 2,3 4 4 6 5,7

Duration 5 6 7 2 6 5 3 1

1

2

3

4

5

6

8

7

5

6

7

2

6

5

3

10,50,5

05,1106,12

05,1205,12

12,1412,14

14,2016,22

14,1914,19

19,2219,22

22,2322,23

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Solution:

Activity A B C D E F G H I

Immediate Predecessors - - A A A E D,F B, C G,H

Completion Time 5 6 4 3 1 4 14 12 2

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Activity a b c d e f g h i j

Immediate Predecessors - - a a a b, c d d, e f g, h

Duration 5 4 3 4 6 4 5 6 6 4

Solution:

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Gantt Chart

Gantt charts are used as a tool to monitor and control the project progress.A Gantt Chart is a graphical presentation that displays activities as follows: Time is measured on the horizontal axis. A horizontal bar is drawn proportionately

to an activity’ s expected completion time. Each activity is listed on the vertical axis.

In an earliest time Gantt chart each bar begins and ends at the earliest start/finish the activity can take place which is shown below:

Gantt Chart Format126/107


Example: Draw a Gantt chart for the work of decorating the drawing room of a house. The list of activities involved in this project are as follows:

Activity A B C D E F G H I J

Immediate Predecessors - A B G D A C,F D A D,I

Duration 90 15 05 20 21 25 14 28 30 45

Solution:Activity Immediate

PredecessorEstimated

Completion Time

A None 90B A 15C B 05D G 20E D 21F A 25G C,F 14H D 28I A 30J D,I 45

AB

F

I

C

G

D

H

J

90 105 115 129 149 194

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Example: A Gantt Chart of a Sample Project

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Example: Draw a Gantt chart for the work of decorating the drawing room of a house. The list of activities involved in this project are as follows:

ID Task Name Predecessors Duration 1 Start - 0 days2 A 1 5 days3 B 1 4 days4 C 2 6 days5 D 3 2 days6 E 3 5 days7 F 4,5 8 days8 Finish 6,7 0 days

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BUET

LECTURE 05: WORK STUDY & WORK MEASUREMENT


Work Study

Work Study is the systematic examination of the methods of carrying on activities so as to improve the effective use of resources and to set up standards of performance for the activities being carried out. Work study succeeds because it is systematic both in the investigation of the problem being considered and in the development of its solution. Work study is encompassed by two techniques such as Method Study (MS) is the systematic recording and critical examination of ways of

doing things in order to make improvements. Work Measurement (WM) is the application of techniques designed to establish the

time for a qualified worker to carry out a task at a defined rate of working.

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Components of Work Study

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Steps Involved in Work Study Select : Job or Process to be studied Record : All the details concerning job using various recording techniques Examine : Recorded facts critically by asking questions like who, what,

when, why Develop : Most economic method of taking into account all the

circumstances Measure : The amount of work involved and set standard time to do that

job Define : New method and the related time so that it can always be identified Install : New method as agreed standard practice with the time allowed Maintain : The new standard by proper control procedure

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Importance of Work Study Work study is a means of enhancing the production efficiency of the firm by elimination of

waste and unnecessary operations It is used to identify non-value adding operations by investigation of all the factors affecting

the job It is a accurate and systematic procedure oriented technique to establish time standards. It is going to contribute to the profit as the savings will start immediately and continue

throughout the life of the product. It has got universal application.

Advantages of Work Study It helps to achieve the smooth production flow with minimum interruptions It helps to reduce the cost of the product by eliminating waste and unnecessary operations Better worker-management relations and meets the delivery commitment Reduction in rejections and scrap and higher utilization of resources of the organization. Helps to achieve better working conditions Improves upon the existing process and helps in standardization and simplification Helps to establish the standard time for an operation which has got application in manpower

planning, production planning

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Method Study

Method study is the process of subjecting work to systematic, critical scrutiny to make it more effective and/or more efficient. It is one of the keys to achieving productivity improvement. It was originally designed for the analysis and improvement of repetitive manual work but it can be used for all types of activity at all levels of an organization. The steps in method study is given below:

Select (the work to be studied) Record (all relevant information about that work) Examine (the recorded information) Develop (an improved way of doing things) Install (the new method as standard practice) Maintain (the new standard proactive)

Select: Work selected for method study may be an identified problem area or an identified opportunity. It may be identified through a systematic review of available data, normal monitoring or control processes, high levels of dissatisfaction and complaint or as part of a change in management policy, practice, technology or location, and usually because it meets certain conditions of urgency and/or priority.

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Record: The Record stage of method study involves gathering sufficient data (in terms of both quality and quantity) to act as the basis of evaluation and examination. A wide range of techniques are available for recording; the choice depends on the nature of the investigation; the work being studied; and on the level of detail required. Many of the techniques are simple charts and diagrams, but these may be supplemented by photographic and video recording, and by computer based techniques.

Examine: The recorded data are subjected to examination and analysis; formalized versions of this process are critical examination and systems analysis. The aim is to identify, often through a structured, questioning process, those points of the overall system of work that require improvements or offer opportunity for beneficial change.

Develop: The Examine stage merges into the Develop stage of the investigation as more thorough analysis leads automatically to identified areas of change. The aim here is to identify possible actions for improvement and to subject these to evaluation in order to develop a preferred solution. Sometimes it is necessary to identify short-term and long-term solutions so that improvements can be made (relatively) immediately, while longer-term changes are implemented and come to fruition.

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Install: The success of any method study project is realized when actual change is made on the ground-change that meets the originally specified terms of reference for the project. Thus, the install phase is very important. Making theoretical change is easy; making real change demands careful planning and handling of the people involved in the situation under review. They may need reassuring, retraining and supporting through the acquisition of new skills. Install, in some cases ,will require a parallel running of old and new systems, in others, it may need the build-up of buffer stocks, and other planning to manage the change. Maintain: Some time after the introduction of new working methods, it is necessary to check that the new method is working, that it is being properly followed, and that it has brought about the desired results.

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Work Measurement

Work measurement is the application of techniques designed to establish the time for a qualified worker to carry out specified jobs at a defined level of performance. Work measurement is concerned with investigating, reducing and eliminating ineffective time, whatever may be the cause. Work measurement is also used to set standard times to carry out the work, so that any ineffective time is not included later. Major reason for that has been the initial focus of the work measurement methods, which essentially targeted only the worker controllable ineffective times.

Purpose of Work Measurement To find ineffective time in a process To set standard for output level To evaluate worker's performance To plan work force needs. To determine available capacity To compare work methods To facilitate operations scheduling To establish wage incentive schemes

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Uses of Work Measurement Measure and monitor performance: Work measurement provides a common 'currency' of

'standard hours' or 'standard minutes' which allows:the outputs of different units and departments to be compared the outputs of the same unit or department to be compared over timeactual output to be compared with planned output.

Determine workforce levels: Since work measurement provides a reliable figure for the amount of work, it allows managers to estimate the workforce requirements of a given scheduled output and to plan for overtime working, additional labor requirements and so on.

Compare working methods: If we can measure, or reliably estimate, the time taken to complete an activity using a variety of working methods, we can use this data as one of the key factors in comparing those methods.

Assist in preparing budgets: Time standards can be used to convert planned output levels into working hours and then into labor costs.

Provide a basis for incentive payment schemes: Actual hours taken to complete a fixed amount of work can be compared to the planned hours and this ratio used as the basis of a performance calculation. The calculated performance can be compared to a target performance level and bonus payments made where the actual performance exceeds planned.

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Techniques of Work Measurement: There is a variety of work measurement techniques, each suited to different types of work or to different forms of measurement. The commonest are:

Time study Activity sampling Predetermined motion time systems Synthesis from standard data Estimating Analytical estimating Comparative estimating

However the basic methodology of work measurement remains common to all of these techniques. This is to: Analyze the work being measured into its constituent parts. Measure the time taken to complete each of these elements, using some process that converts

any observed or recorded times to a time at a defined level of performance Synthesize the time for the whole job of work by combining these element times according

to the specific frequency with which they should occur in the work when carried out as properly specified, and making due allowance for such factors as the need for workers to recover from stresses and fatigue brought about by doing this work.

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Time Study: Time Study consists of recording times and rates of work for elements of a specified job carried out under specified conditions to obtain the time necessary to carry out a job at a defined level of performance. In this technique the job to be studied is timed with a stopwatch, rated, and the basic time calculated. Requirements for Effective Time Study: The requirements for effective time study are:

Co-operation and goodwillDefined jobDefined methodCorrect normal equipmentQuality standard and checksExperienced qualified motivated workerMethod of timingMethod of assessing relative performanceElemental breakdownDefinition of break pointsRecording media

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Performance Rating: Time Study is based on a record of observed times for doing a job together with an assessment by the observer of the speed and effectiveness of the worker in relation to the observer's concept of Standard Rating. The numerical value or symbol used to denote a rate of working.

Standard Time: Standard time is the total time in which a job should be completed at standard performance i.e. work content, contingency allowance for delay, unoccupied time and interference allowance, where applicable.

Contingency allowance: A contingency allowance is a small allowance of time which may be included in a standard time to meet legitimate and expected items of work or delays, the precise measurement of which is uneconomical because of their infrequent or irregular occurrence.Relaxation allowance: A relaxation allowance is an addition to the basic time to provide the worker with the opportunity to recover from physiological and psychological effects of carrying out specified work under specified conditions and to allow attention to personal needs. The amount of the allowance will depend on the nature of the job.

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Types of Elements for Time Study: A repetitive element is an element which occurs in every work cycle of the job. An occasional element does not occur in each work cycle of the job, but which may

occur at regular or irregular intervals. e.g. machine setting. For a constant element, the basic time remains constant whenever it is performed.

e.g. switch the machine on. A variable element is an element for which the basic time varies in relation to some

characteristics of the product, equipment or process, e.g. dimensions, weight, quality etc. e.g. push trolley of parts to next shop.

A manual element is an element performed by a worker. A machine element is automatically performed by a power-driven machine A governing element occupies a longer time than any of the other elements which

are being performed concurrently. e.g. boil kettle of water, while setting out teapot and cups.

A foreign element is observed during a study which, after analysis, is not found to be necessary part of the job. e.g. degreasing a part that has still to be machined further. 126/124


Activity Sampling: Activity sampling is a technique in which a large number of instantaneous observations are made over a period of time of a group of machines, processes or workers. Each observation records what is happening at that instant and the percentage of observations recorded for a particular activity or delay is a measure of the percentage of time during which the activity or delay occurs.Predetermined Motion Time Systems: A predetermined motion time system is a work measurement technique whereby times established for basic human motions are used to build up the time for a job at a defined level of performance. The systems are based on the assumption that all manual tasks can be analyzed into basic motions of the body or body members. They were compiled as a result of a very large number of studies of each movement, generally by a frame-by-frame analysis of films of a wide range of subjects, men and women, performing a wide variety of tasks.Synthesis: Synthesis is a work measurement technique for building up the time for a job at a defined level of performance by totaling element times obtained previously from time studies on other jobs containing the elements concerned, or from synthetic data. Synthetic data is the name given to tables and formulae derived from the analysis of accumulated work measurement data, arranged in a form suitable for building up standard times, machine process times, etc by synthesis.

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Estimating: The technique of estimating is the least refined of all those available to the work measurement practitioner. It consists of an estimate of total job duration (or in common practice, the job price or cost). This estimate is made by a craftsman or person familiar with the craft. It normally embraces the total components of the job, including work content, preparation and disposal time, any contingencies etc, all estimated in one gross amount.

Analytical Estimating: This technique introduces work measurement concepts into estimating. In analytical estimating the estimator is trained in elemental breakdown, and in the concept of standard performance. The estimate is prepared by first breaking the work content of the job into elements, and then utilizing the experience of the estimator (normally a craftsman) the time for each element of work is estimated - at standard performance. These estimated basic minutes are totaled to give a total job time, in basic minutes. An allowance for relaxation and any necessary contingency is then made, as in conventional time study, to give the standard time.

Comparative Estimating: This technique has been developed to permit speedy and reliable assessment of the duration of variable and infrequent jobs, by estimating them within chosen time bands. Limits are set within which the job under consideration will fall, rather than in terms of precise capital standard or capital allowed minute values. It is applied by comparing the job to be estimated with jobs of similar work content, and using these similar jobs as "bench marks" to locate the new job in its relevant time band - known as Work Group.

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Production Planning and Control

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Transcript of Production Planning and Control