UNIT 1

Among all functional areas of management, production is considered to be crucial

in any industrial organization. Production is the process by which raw materials and
other inputs are converted into finished products. It is a process of converting
inputs (raw material + plan) into output.

The other word synonymously used with production is manufacturing.

Manufacturing is understood to refer to the process of producing only tangible
goods, whereas production includes creation of both tangible goods as well
intangible services.

Nature of Production

The nature of Production or Operations can be better understood by viewing the

manufacturing functions as:

1. Production/operation as a System
2. Production /operations as an organizational function
3. Production / operation as a conversion or transformation process and
4. Production / operation as a means of creating utility.

Production/operation as a System
 Production /operations as an organizational function

Production / operation as a conversion or transformation process

Production / operation as a means of creating utility

What is production management?

Production management is the process of managing production inputs (raw

materials, capital, and labor) to produce outputs (finished products). For companies
that manufacture products, production management is necessary to ensure the
operations and logistics (supply chain) run smoothly. Production management goes
hand in hand with operations management.

“Production Management is the application of management principles (planning,

organizing, directing and controlling) into production”.

Production management aims to monitor and improve the efficiency of activities,

materials, staff resources, and budgets to produce goods. Production outcomes
vary according to the industry. A production manager ensures that manufacturing
stays on schedule, within budget, and achieves the desired output goals.

E.S. Buffa defines production management as, “Production Management deals with
decision-making related to production processes so that the resulting goods and
services are produced according to specifications, in the amount and by the
scheduled demanded and out of minimum cost.”

Production Management is the process of managing all the activities related to the
development of products or services. It includes planning, executing and directing
operations to convert raw materials into finished goods and services.

Production Management is a process which involves managing and controlling

production activities of the business. It involves the application of management
principles to the production function of the business to increase productivity.
Production management applies planning, directing, organising and controlling
for managing production operations. This process is concerned with the
conversion of raw materials into business finished products efficiently without
any wastage of resources.

Why is production management important?

Production management is important because it lowers costs when done
efficiently, meaning the processes maximize resources to improve a business'
competitiveness in the market. This, in turn, helps companies produce high quality
products that are delivered on time to achieve business objectives, and therefore
improves the company's reputation.

What are the 5 M's?

The 5 M's of production management can be summarized with: men, machines,

methods, money, and materials. Managing "men" (the better word for this is
"people") is a core of production management, who are needed to work the
machines that produce goods. Production managers strategize how to use
machines and certain methods (strategies) to optimize resources, money, and
materials.
Nature of Production Management

1. Results in Value Addition: Production management is a key tool available

with an organization which assists in value addition. It is a process which
enables in producing high-quality products by purchasing raw materials
from the right source, in right form, at right price and in right quantity.
These quality goods provide better satisfaction to customers thereby
improving goodwill of an organization.
2. Inter-Disciplinary Approach: It is an inter-disciplinary approach which is
derived from several disciplines and subjects. Different subjects like
statistics, mathematics, economics, engineering, sociology and human
psychology have contributed toward the development of production
management approach.
3. Part of General Management: Production management is an essential
component of General management. It is a tool which assist managers in
planning, organizing, coordinating and controlling all activities related to
the production of products and services.
4. Transformation Process: It is a process of transformation in which raw
materials are converted into finished products that are ready for
consumption by consumers. Production management focuses on
economical production of products avoiding any wastage of raw materials
used.
5. Operative Function: Production management monitors day to day
operations of business for ensuring long-term continuity. It supervises all
production activities on daily basis for checking out whether all resources
are efficiently utilized.
6. Both Art and Science: It can be treated both as an art as well as science.
Production management is termed as art as it is the one which assign,
coordinates and monitors all work activities of an organization. Whereas, it
is a science as it manages all machines and technical aspects helping in
production activities.
7. Management of Service Sector: Production management not only manages
the activities related to production of tangible products. It is a process
which monitors the service sector also where intangible products are
provided to customers as per their needs.
Scope of Production Management
1. Product selection and design: The product mix marks the production
system either efficient or inefficient. Choosing the right products keeping
the mission and overall objective of the organization in mind is the key to
success.
Production manager has to critically analyze the target market and
potential customers. Activities relating to production system designing
includes the decision related to the production system design is one of the
most important activities of the production management. R & D is done
followed by prototyping.
2. Process selection and Planning: Process planning deals with the selection
of the processes and the determination of conditions of the processes. The
particular operations and conditions have to be realized in order to change
raw material into a specified shape. All the specifications and conditions of
operations are included in the process plan.
3. Facility location: It involves selecting the right location for setting up
production facilities of business that affects its long term growth. This is an
important decision to be taken as it involves long term commitment and
huge investments in land, building and machinery. Location of facility
should be appropriate from where raw materials, labor and other factors of
production are easily accessible by business.
4. Process layout and Material Handling: Plant layout is concerned with
physical arrangement of facilities set up by business. It involves deciding
departments; work Centre’s, machines and necessary equipment’s within
the facility for ensuring better productivity. Material handling refers to
managing the movement of materials from storeroom to machinery and
from machinery to another stage of production like packaging and storing.
5. Capacity Planning: A capacity planning process involves determining how
much production capacity is required to meet changing demand for
products. Design capacity refers to an organization's maximum capacity to
accomplish work over a given time period in capacity planning. Capacity
planning process is used by organizations to determine their production
capacity in order to meet the changing needs of their products. A design
capacity is an organization's maximum ability to complete a specified
amount of work in a given time period, in the context of capacity planning
 6. Product Designing: Product designing means giving shapes to ideas of
products for converting them into a reality. Every organization should come
up with innovative products in market after conceiving new ideas based on
market requirements.
7. Designing of Process: Process design is an overall route followed by
business for transforming raw materials into finished products. It is a crucial
decision to be taken as it determines the efficiency of business. It involves
choosing appropriate technology, deciding sequence of production
processes and facilities layout.
8. Production Planning and Control (PPC): It involves planning and controlling
various aspects of production activities. PPC is a process of deciding
production in advance, setting up the exact route for each item, deciding
the start and finish deadline of each product for directing production orders
to shops and following product progress in accordance with the order.
9. Quality Control: Quality control is a process of checking and maintaining
the required quality standards of production activities within the
organization. It ensures that goods produced are of high quality by setting
up check points and measuring performance from time to time.
[Link] Management: It refers to evaluation of all business activities
for identifying any deviations if there. Maintenance management involves
taking all corrective steps for removing these deviations. It focuses on
keeping all the processes on track in line with decided quality, pre-
determined cost schedule and time range. Taking care of all machinery
repairs, replacement and servicing are included in this.

Functions of Production Management

Selection of Products and Its Design
Production management helps the firm in selection of proper products and
design. Selection of the right product and its proper design is important for the
survival of every business in the market. It performs several research programs to
understand the wants of customers. Proper knowledge of customer requirements
helps the firm in deciding the right product. After choosing a product, its proper
design is selected to ensure that customer needs are fully satisfied at a lower cost.
Production Planning And Control
Planning and monitor production activities are quite important for every business.
Production management keeps an eye on each and every activities and element
associated with production operations. It decides in advance what to produce and
in how much quantity, then decides process for production, sets the starting and
completion dates for production activities. It designs an exact plan route in
advance and implements that in operations to ensure timely delivery of orders.
Production managers monitor all production activities and take all necessary
activities as and when required.

Location Of Facilities
Selection of proper location for setting production facilities is a must for ensuring
smooth functioning. It is a long term capital decision which affects the business
organization in the long run. Production management properly analyze the area
before setting up production plants and other facilities of business. It takes into
account various geographical and other factors to ensure the availability of raw
materials, enough employees and various infrastructural facilities.

Machines Maintenance and Replacement

Production management plays a significant role in the maintenance of machinery
and plant. Proper functioning of machinery is important for uninterrupted
production. Production management process focuses on continuous routine
inspection of machines, performs regular cleaning and oiling, removal and
replacement of any obsolete and damaged equipment’s. All these steps taken by
production management prevent any machinery breakdown and avoid any
production halts.

Enhances Goodwill And Reputation Of Business

Goodwill and image of a business is a key element in attracting and retaining
customers. Production management helps the business in improving its goodwill
by properly satisfying customer needs. Production management ensures that the
right quality products at the right cost are delivered to customers at the right
cost. This increase the overall confidence and satisfaction level of customers.
Helps In Facing Competition
Production management helps the business is facing stiff competition in the
market. It properly analyzes the market requirements and competitors activities
before planning for production activities. All strategies are framed and
implemented in accordance with the situations of the market. It ensures that a
firm produces the right product in the right quantity, at the right time and
provides it to the customer at the right cost. Customers’ needs are given prime
importance by production management. This will helps in facing the competition
easily.

Helps In Expansion And Growth

Expansion and growth are the ultimate aims of every business. Production
management supports the business in its expansion and growth. It aims at
increasing the profitability of the business by decreasing the overall operating
cost. This process ensures optimum utilisation of all resources. Production
monitors operations of every department of business and takes all corrective
measures as and when required. High-profit earnings by business help in
expanding its operations and growing its size.

Production System in Operations Management

Definition: A Production System implies the set-up consisting of assets such as

facilities, machines and equipment that transform resources into valuable output
using processes and technology.

In other words, we can understand it as a system that converts factor inputs into
outputs which is capable of satisfying the market demand.

Majorly, it focuses on the system aspect of the production/operations function. It

is a combination of three significant components given below:

1. Input (Capital, Machines, Equipment & Tools, Labour)

2. Conversion Process
3. Output (Goods and Services)
Production implies the transformation of several Inputs into Outputs, i.e., the
Product.

A system is a mechanism consisting of a set of things working together.

Companies use production systems to cater for the demand of their target
market. However, the requirements of the customers keep varying with time.
Therefore, the requirement of the production also changes accordingly.

The production system depends on the type of products offered by the company.
In addition, it is also affected by the strategies adopted to meet distinct customer
needs.

The companies need to take some crucial decisions in this regard:

 Choice of the technology to be used for production.

 The capacity of the production systems.
 Production volume as per market demand.
The entire system operates in an environment. Some factors from the internal
and external environment affect the production process. Thus, companies
consistently take feedback and make suitable adjustments in the production
system.

The system may even fail if the production processes do not generate the
desired output.

Production System Types

The type of production system depends upon the type and volume of output.
Besides, it differs across industries and target consumer markets.

The major determinants that aid the selection of a production system are:

 Volume: It indicates the average quantity of goods for production.

 Variety: It is the product variants, alternatives and range for production.
 Flow: It indicates the nature and intensity of the production process.

Broadly, the production system is classified into two categories as follows:

1. Intermittent Production

 Job-shop Production
 Batch Production
2. Continuous Production
 Mass Production
 Process/Flow Production
1. Intermittent Production

It is a type of production system where the production flow is intermittent or

irregular. It means the production process begins and stops at irregular
intervals.

Here the production is carried out based on the customer orders, i.e. Make-to-
order. Consequently, the producer can customize their products as per the orders
received.

Each time the jobs and route are changed depending on the order received.
Therefore, the producer needs to install general-purpose production equipment.

Features of Intermittent Production

 Order-based production of goods.

 Production on a smaller scale.
 Flexibility in production.
 Production of a greater variety of products.

a. Job-shop Production

Job-shop production or Unit Production facilitates the manufacturing of

customized products. Here, the production of one or a few products takes place.
Moreover, it is completely based on the user specifications and within a
stipulated period and cost.
Each task has a different set of technical requirements because of personalization.
For this reason, the jobs and demand are both unpredictable.

Example: Hairdresser, Aircraft, Gold Jewellery and Tailor.

Advantages

1. A wide variety of products can be offered to customers.

2. The workers are more skilled in comparison to other systems.
3. Ease in management due to limited resources and workers.
4. Flexibility in process and creative methods to generate unique output.

Disadvantages

1. The higher lead time of the system.

2. Under-utilization of equipment.
3. Requirement of highly skilled labors.
4. The cost of production is high due to small-scale production.
b. Batch production

This production system is more than a unit production but less than mass
production. Here, the production happens in lots and batches at regular
intervals.

The batch contains a limited number of similar products manufactured

simultaneously.

The product is disintegrated in the form of Jobs. Further, the whole batch passes
through these jobs one at a time. The production of the next batch begins post-
completion of the ongoing batch.

Example: Medicines, Shoes and Bags

Advantages

1. Usage general-purpose machines.

2. Risk can be substituted among Batches.
3. Better resource utilization.
4. Per-unit cost is lesser in comparison to unit production.
Disadvantages

1. It requires specific fixtures.

2. High cost in sourcing materials.
3. High work-in-progress inventory.
4. More lead time due to changes in set-up.

2. Continuous Production

Here, the production occurs continuously with a consistent supply of materials. In

other words, the products are constantly in motion.

Unlike intermittent production, there are no frequent halts. The production is

carried out on a large scale. The companies maintain the inventory as per demand
forecasts.

Identical goods are produced due to product standardization and bulk

production.

Features of Continuous Production

 Complete utilization of equipment and raw materials.

 Production at large scale.
 Per-unit cost is less due to bulk production.
 Less lead time as the set-up is required only at the beginning.
 Highly automated and capital-intensive system.

a. Mass Production

Companies use it for carrying out production in very large quantities. It involves
the manufacturing of discrete parts, popularly known as Assemblies. Here, the
companies adopt a Make-to-stock business strategy.
The flow of this production system is constant and continuous. And, the facility
arrangement is in line or per product layout.

Example: Soaps, Pens and Toothpaste

Advantages

1. The cycle time is comparatively less.

2. Automation of material handling.
3. Low work in progress.
4. The cost of production is low.

Disadvantages

1. Default at one place may stop the entire production.

2. Line layout needs changes with the change in product design.
3. High capital investments.
b. Flow Production

As the name suggests, the flow of production is uniform and standardized. All the
processes are arranged sequentially, and all the products pass through them.

This production system is rigid. Companies stock the products and use them to
fulfil the quick demand of the market.

Examples: Chemical Plants, Tv and Engines.

Advantages

1. Less amount of wastage.

2. Semi-skilled can also be employed.
3. Higher profit margins.
4. The process flow is constant.

Disadvantages

1. Less flexible to increase or decrease the number of processes.

2. Restrictions on product differentiation.
3. Incapable of fulfilling individual demand.
Characteristics of Production System

The varied characteristics and importance of production systems are as follows:

 Organized Activity: The production system is an organized activity. As all the

activities or processes within the system are defined and run for a specific
purpose.
 Transformation: This system’s main work is converting Inputs into Outputs.
 Coordination: Here, every part of the system is well coordinated. The
absence of coordination may lead to system failure and losses.
 Control: It is a crucial function of this system. This is because, review and
maintenance of the system are required for its healthy functioning and
productivity.
 Value Addition: Through this process, manufacturers add value to the
inputs. Consequently, the output generated serves the needs of the
consumers.

Example of Production System

Nestle

It is a multinational food and beverages corporation having headquarters in

Switzerland. Some of its bestselling products are – Nescafe, Kitkat and Maggi.

It uses Batch Production as its type of production system.

Ford Motor

It is an America-based multinational automobile manufacturer. Ford’s SUV is one

of its best-selling cars, making it America’s best SUV brand.

It uses Moving Assembly Line as its production system.

Difference between Intermittent and Continuous Production

The table below clearly differentiates between Intermittent and Continuous

production systems:
 INTERMITTENT CONTINUOUS PRODUCTION
BASIS
PRODUCTION SYSTEM SYSTEM

Flexibility More Flexible Less Flexible

Lead Time The lead time is more as it Here, lead time is less; once set,

requires a frequent change in set- it doesn't require changes

up

Wastage More amount of waste is Less amount of waste is

generated generated

Product Variety of products in less quantity Identical product in large

quantity

Cost per unit The price is high due to the Cost is low due to

of Product customization standardization and bulk

production

What does a production manager do?

Production management job descriptions vary by each industry and level of the
role, but in general, someone working in production management has the following
responsibilities:
 Managing manufacturing processes and looking at inputs to achieve outputs
 Creating and maintaining work schedules and budgets
 Monitoring production to find ways to improve efficiency and operations
 Communicating effectively with staff, stakeholders, suppliers, and customers
 Manage safety and quality control
 Manage a production team
 Identify, evaluate, and resolve any problems with manufacturing or staffing

Production Manager: 8 Major Responsibilities of a Production Manager

Some of the major responsibilities of a production manager are: (1) Production

planning (2) Production control (3) Quality control (4) Method analysis (5)
Inventory control (6) Plant layout (7) Work measurement and (8) Other functions:

(1) Production planning:

Production planning is the first function performed by the production manager.

Production planning is concerned with thinking in advance what is to be

produced, how it is to be produced and by what time should it be produced. It is
concerned with deciding about the production targets to be achieved by keeping
in view the sales forecasts.

(2) Production control:

Production planning cannot be properly achieved without an effective system of
production control. It is in fact concerned with successful implementation of
production planning. It aims at completing production well in time and also with
lesser costs. A proper system of production control ensures continuous
production, lesser work-in-progress and minimization of wastages.

(3) Quality control:

The production manager is also concerned with maintaining required quality of
the product. Quality control is concerned with controlling the negative variables
which affect the ultimate quality of a product. It is concerned with use of all the
ways and means where by quality standards could be maintained.
(4) Method analysis:
There are many alternative methods for manufacturing a product. Some methods
are more economical than others. The production manager should study all the
methods in detail by analysing them in detail and select the best alternative out of
them. The process of selecting the best alternative is known as methods of
analysis.

Methods of analysis are considerably helpful in minimising the cost of production

and improving productivity of the concern.

(5) Inventory control:

The next important function to be carried by a production manager is to exercise
proper control over the inventory. He should determine economic order size,
maximum, minimum, average and danger levels of materials so that problems of
overstocking and understocking do not arise. This also helps in minimising
wastages of materials.

(6) Plant layout:

Plant layout is primarily concerned with the internal set up of an enterprise in a
proper manner. It is related to orderly and proper arrangement and use of
available resources viz., men, money, machines, materials and methods of
production inside the factory. In other words it is concerned with maximum and
effective utilisation of available resources at minimum operating costs.

(7) Work measurement:

Work measurement methods are concerned with measuring the level of
performance of work by a worker. Time and motion studies techniques can be
used for work measurement. If a worker works below the level fixed by work-
measurement techniques, his performance must be improved through positive or
negative incentives.

(8) Other functions:

Apart from the above-mentioned functions, the production Department also
carries certain other functions viz., cost control, standardization and storage,
price analysis and provision of wage incentives to workers etc.

Production Planning and Control

For efficient, effective and economical operation in a manufacturing unit of an
organization, it is essential to integrate the production planning and control
system.

Production planning and subsequent production control follow adaption of

product design and finalization of a production process.

Production planning and control address a fundamental problem of low

productivity, inventory management and resource utilization.

Production planning is required for scheduling, dispatch, inspection, quality

management, inventory management, supply management and equipment
management.

Production control ensures that production team can achieve required production
target, optimum utilization of resources, quality management and cost savings.

Planning and control are an essential ingredient for success of an operation

unit. The benefits of production planning and control are as follows:

 It ensures that optimum utilization of production capacity is achieved, by

proper scheduling of the machine items which reduces the idle time as well
as over use.
 It ensures that inventory level are maintained at optimum levels at all time,
i.e. there is no over-stocking or under-stocking.
 It also ensures that production time is kept at optimum level and thereby
increasing the turnover time.
  Since it overlooks all aspects of production, quality of final product is
always maintained.

Production Planning

Production planning is one part of production planning and control dealing with
basic concepts of what to produce, when to produce, how much to produce, etc.
It involves taking a long-term view at overall production planning. Therefore,
objectives of production planning are as follows:

 To ensure right quantity and quality of raw material, equipment, etc. are
available during times of production.
 To ensure capacity utilization is in tune with forecast demand at all the
time.

A well thought production planning ensures that overall production process is

streamlined providing following benefits:

 Organization can deliver a product in a timely and regular manner.

 Supplies are informed will in advance for the requirement of raw materials.
 It reduces investment in inventory.
 It reduces overall production cost by driving in efficiency.

Production planning takes care of two basic strategies’ product planning and
process planning.

Production planning is done at three different time dependent levels i.e. long-
range planning dealing with facility planning, capital investment, location
planning, etc.; medium-range planning deals with demand forecast and capacity
planning and lastly short term planning dealing with day to day operations.

Production Control

Production control looks to utilize different type of control techniques to achieve

optimum performance out of the production system as to achieve overall
production planning targets. Therefore, objectives of production control are as
follows:

 Regulate inventory management

  Organize the production schedules
 Optimum utilization of resources and production process

The advantages of robust production control are as follows:

 Ensure a smooth flow of all production processes

 Ensure production cost savings thereby improving the bottom line
 Control wastage of resources
 It maintains standard of quality through the production life cycle.

Production control cannot be same across all the organization. Production control
is dependent upon the following factors:

 Nature of production( job oriented, service oriented, etc.)

 Nature of operation
 Size of operation

Production planning and control are essential for customer delight and overall
success of an organization.

Hence, Production planning and control is a strategy to plan a chain of operations

that supports manufacturers to be at the right place and time. It helps them
achieve the most efficiency from their resources. It also includes activities of other
departments, such as sales, marketing, and procurement.

What are the steps in production planning and control?

1. Planning

Planning determines what will be produced, by whom, and how. It formulates

the plan for labor, equipment, work centers, and material requirements needed
for production.
Relevant information from various sources helps to develop a production plan.
For instance, data from sales on order quantities and promised delivery dates.
Product specifications from the engineering department may also be needed. The
planning step helps to keep a streamlined approach to the production process.

2. Routing

Routing determines the path raw materials flow within the factory. Using the
sequence, raw materials are transformed into finished goods.
Coordinating every production process and scheduling every step is important to
measure the production process duration. Routing shows the quantity and quality
of materials and resources needed. It also shows the operations used and the
place of production.

Routing manages the “How”, “What”, “How much”, and “Where” of production. It
systematizes the process and optimizes resources for the best results.

3. Scheduling

Scheduling emphasizes “when” the operation will be completed. It aims to

make the most of the time given for the completion of the operation.
As per Kimball and Kimball, the definition of scheduling is –

“The determination of the time that should be required to perform the entire
series as routed, making allowance for all factors concerned.”

Organizations use different types of schedules to manage the time element.

These include Master Schedule, Operation Schedule, Daily Schedule, and more.
4. Loading

Loading looks into the amount of work loaded against machines or workers. The
total time to perform new work is added to the work already scheduled for the
machine or workstation.
If a machine or workstation has capacity available, more orders can make up the
underload. If there is a capacity overload, proactive measures can prevent
bottlenecks. Adding a shift, requesting overtime, bringing in operators from
another shop, or using a sub-contractor are possible options.
 5. Dispatching

Dispatching is the release of orders and their instructions. It follows the routing
and scheduling directions. This step ensures all items are in place for the
employees to do their jobs.
Here are the points that are part of “Dispatching”:

 Issue materials or fixtures that are important for production

 Issue orders or drawings for initiating the work
 Maintain the records from start to finish
 Start the control procedure
 Cascade the work from one process to another

6. Follow-up

Also known as expediting, follow-up locates fault or defects, bottlenecks, and

loopholes in the production process. In this step, the team measures the actual
performance from start until the end and then compares it with the expected
performance.
Areas that have problems, must get addressed. Follow-up gets to the root of the
issue and helps resolve it. For instance, if schedules are not met, is it from an
unusual circumstance? Or is it something that needs to get adjusted? The
production manager may need to revise production targets, loads, or schedules to
correct the issue.

Types of Production Planning

1. Master production schedule

A Master production schedule is a plan that tells when the production will begin
for what products, at what time, and in what quantities. The purpose of a master
production schedule is to create a realistic plan to ensure on-time delivery of
goods while minimizing overstock.
 2. Materials requirement planning

Material requirement planning ensures availability of raw materials, maintains the

lowest possible stock level, promotes inventory control, and helps plan
purchasing activities.

3. Capacity planning

Capacity planning is the process of determining the production capacity needed

by the organization to meet customers’ orders and changing demand for the
product. It aims to strike a balance between expenses and resources as well as
demand and supply.

4. Workflow planning

Workflow planning is planning a sequence of operations performed during the

production process. It allows you to track each item’s work and see who is
responsible for the task and its completion. In other words, workflow planning
helps check the status of the task.

What are the benefits of production planning and control?

Some of the many benefits to production planning and control include:

 Optimized manufacturing capacity – ensures machines and employees work to

capacity. That keeps costs down, increases efficiency, and provides greater
profitability. It helps to identify areas of improvement and to plan for growth.
 Reduced inventory costs – allows manufacturers to only hold the necessary
inventory. The software can predict demand and have a Just-in-Time scheduling
strategy. Without a surplus of inventory, costs are kept low.
 On-time deliveries – helps to ensure production optimization and prompt
deliveries. Getting products to their destination on time improves customer
satisfaction. That increases customer retention and referrals.
 Better procurement of materials – shows when materials should get purchased
for production. Having this information helps to know when to order and what is
needed to meet customer and production demand. Knowing when to order lets
 procurement buy in advance to find the best deal. This also helps to save money
and improves relationships with suppliers.
 Streamlined production processes – ensures that materials and internal
resources for production are ready when needed and shows what capacity is
available, and when. This keeps production running smoothly. It also helps
employee satisfaction as it eliminates frustration from interruptions in production
and workflows.
 Minimal resource waste – eliminates material shortages or surpluses for less
resource waste. This lessens employee time wasted. Capital is not tied up in
inventory that is not used. There is less production waste because delays that
cause discarded materials get eliminated.

What are the objectives of production planning and control?

The overall objectives of production planning and control are to:

 To deliver quality goods in required quantities.

 To ensure maximum utilization.
 To ensure production of quality products.
 To maintain optimum inventory level.
 To maintain flexibility in manufacturing processes.
 Optimize resources and the scheduling of resources to meet production demand
 Ensure an efficient schedule
 Have resources ready when needed
 Increase productivity of internal resources (people, work centers, machines,
tooling, etc.)
 Improve customer satisfaction
 Ensure the right person gets assigned to specific processes
 Coordinate with other departments (sales, customer service, purchasing, etc.)
 To remove bottlenecks in production
 To produce effective results for least total cost.

Production planning and control is the core of any manufacturing unit. It includes
material forecasting, master production scheduling, long-term planning, demand
management, and more. The planning process kicks off with demand forecasting
of a product. Using that forecast data and the internal resources available, the
production plan is created.
Production planning and control is a strategy to plan a chain of operations that
supports manufacturers to be at the right place and time. It helps them achieve
the most efficiency from their resources. It also includes activities of other
departments, such as sales, marketing, and procurement.