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Systems and procedures
Chapter 27
Systems and procedures Chapter takeaways After completion of this chapter the reader would be able to 1. Appreciate the need to adapt systematic procedures and formats for the day-today production planning activities. 2. Appreciate how the industrial engineering studies provide the basic data for the production planning procedures. 3. Understand the different formats that are to be used for the production planning function. 4. Appreciate the significance of the process planning layout sheets and machinewise operational timings to plan effective scheduling. 5. Learn several production planning and control formats like work orders, material warrants, time tickets, move tickets, and inspection tickets.
27.1 Development of systems and procedures For all production planning and control (PP&C) tasks to be effectively executed, it is essential to develop and define the exact system and procedure to be followed for the execution of each and every task, so that any ambiguity or personal preferences are eliminated and everybody knows what exactly to do in the routine course as well as whenever specific situations occur. The development of formats and charts like route card and job order is a major step in this direction. This chapter discusses these formats in the form of a presentation of a case study based on the systems developed by the author at the Surat unit of Rallifan and subsequently at the National Bicycle Company of Tanzania. This case study also includes the basic formats and procedures involved in the development of time standards, which provide the basic input information for planning.
27.2 Uses of systems and procedures 1. 2. 3. 4. 5.
Higher productivity Consistency Better quality of work and customer service Protection from the unexpected and unpleasant Ability to expand and grow quickly
Production Planning and Control. DOI: https://doi.org/10.1016/B978-0-12-818364-9.00027-5 Copyright © 2019 BSP Books Pvt. Ltd. Published by Elsevier Inc. All rights reserved.
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6. Continuity of effective functioning of the systems even if the head is absent 7. Perspective of overview of what is happening to be able to make correct and effective decisions (Fig. 27.1)
27.3 Industrial engineering systems and formats Fig. 27.2 illustrates several procedures and formats that are needed for the optimal functioning of the PP&C department. These are classified into four basic groups as cited next, starting with the operational standard times by the work study section. It may nevertheless be
FIGURE 27.1 Development of product planning and control systems and formats.
Work measurement
A
Operational standard time determination Standard declaration forms Component wise standard times B
Machine wise standard times Machine capacities
Production sequencing and scheduling Production controlling formats and procedures Job order C
Material warrants Time ticket Move order Inspection order
D
A B C D
Progress control Gantt chart et al.
Industrial engineering Production planning Machine loading and production control Progress control
FIGURE 27.2 How work measurement precede the production planning and control procedures and formats.
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noted that formats like machine-wise standard times may overlap into more than one category depending upon which section, whether work study, the production planning, or the production control performs the recordings. These are cited next. 1. The industrial engineering (work study) formats to record the operational timings a. Work measurement b. Operational standard time determination c. Standard declaration forms d. Component-wise standard times 2. Production planning and scheduling formats a. Machine-wise standard times b. Machine capacities c. Production sequencing and scheduling 3. Machine loading and production control formats a. Job order b. Material warrants c. Time ticket d. Move order e. Inspection order 4. Progress control formats a. Gantt chart b. Sched-U graph c. Sched-U chart d. Visual control chart e. Cumulative and weekly chart
27.3.1 How work study precedes the production planning and control procedures and formats The operation flowchart, which indicates the flow of the components from equipment to equipment and the standard times for each operation, forms the basis for the scheduling and control function. Thus setting up the operational standard times and other industrial engineering aspects need to be understood before understanding the production control systems. The systems and formats used for the industrial engineering functions are hence illustrated in this chapter.
27.4 Standard time declaration Note that a majority of the production planning engineers have industrial engineering background, reporting to either the chief industrial engineer or the planning manager. The planning engineer or his industrial engineering
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counterpart would first establish the operation-wise standard times. Each operation will be split up into elements and timed with a stopwatch using the time study sheets as per Fig. 5.7. This would be summarized for each component as component-wise standard times indicating the series of machines used for each operation.
27.5 Operational time standards Operational time standards would be declared in the standard declaration form for each operation per Fig. 5.8, defining the standard and budgeted timings.
27.6 Component-wise operational timings Component-wise operational timings are tabulated and the total standard as well as the budgeted time for each component is computed per Fig. 27.3. A budget allowance of 15% 25% is added to the standard times to get the budgeted time, which would be used for the following computations.
27.7 Machine-wise operational timings 1. Similar summary would be made for all the operations performed for various components worked on a particular machine or work center group, as per Fig. 27.4, and a machine-wise operational timing as per Fig. 27.4 will be prepared.
FIGURE 27.3 Component-wise operational timings.
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FIGURE 27.4 Machine-wise operational timings.
27.8 Machine capacity computation The preceding information would be rematrixed as machine-wise standard times to indicate the total time each machine would be occupied in a certain period, say in a day or in a week. From this, the capacity of the machine in terms of number of units of the component that can be produced by the machine per year is calculated as illustrated in Fig. 27.5. Here the budgeted time would be used instead of the standard time to take care of exigencies like delays other than machine breakdowns. In case of machines working on various components, the capacity would be calculated considering the proportion of the components in the product.
27.9 Process planning layout sheets Process planning layout sheets (Fig. 27.6), sometimes known as process routing sheets, are akin to the standard operation procedures given to the operatives. These consist for each component of the name of the machine together with the details of cutting tools, operation speeds, feeds the jigs, fixtures, inspection tools, etc., that would be required by the operator as well as the standard times, etc., as a guidance to the operator. These normally would be released by the engineering department or the industrial engineering department to the production, planning, and costing departments. Also to be prepared are the cost center wise standard time for each assembly.
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FIGURE 27.5 Machine capacity computations.
PROCESS PLANNING LAYOUT PART NO.
AUTHORIZED
PART NAME ASSEMBLY
DEPT.
DATE
NAME
BY
SHEET No. …..OF ….….
Sl.
OP,
OPERATION MACHINE HOURLY
SPEEDS
NO
NO
OUTPUT
& FEEDS
TOOLS & JIGS & GAGES
QUALITY
REMARKS
FIXTURES STANDARDS
FIGURE 27.6 Process planning layouts.
27.10 Bill of materials A bill of materials (BOM) is a list of the parts or components that are required to build a product and indicates the details and quantities of all the materials like raw materials, consumables, general supplies, and components like screws that are required to be drawn by the operator. For producing for example 1000 U of the final product, the requirement of raw materials would be computed and tabulated as the BOM. This may be prepared either by the design department or the industrial engineering department based on the
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production targets and released to the production, planning, and costing departments. As explained in Chapter 30, Material requirement planning, it is an essential requirement when an organization is using a material requirements planning system and is used to calculate the cost of a product, as well as to order parts from suppliers. Table 30.2 illustrates the BOM for tramp oil remover.
27.11 Revision frequency of the time standard data The time study and standard establishment is a continuous process, whereas standards per Figs. 27.1 27.5 will be reviewed and revised once a year based on which annual budget time standards for each component and assembly will be computed.
27.12 Production planning and control systems and formats The four formats cited in Section 27.3 form the basis for the subsequent PP&C activities like product sequencing, routing, and scheduling. The subsequent sections indicate the systems and formats used by the planning department for the actual PP&C activities.
27.12.1 Annual/aggregate planning Based on the annual sales forecast submitted 3 months before beginning of the year, the planning department will prepare an assembly-wise manufacturing schedule for the coming year, as discussed earlier Chapter 21, Aggregate planning, on aggregate planning and master production schedule.
27.12.2 Monthly production planning On the 25th of every month the production targets for the next month will be prepared based on the sales targets statement and physical stock statement as on 24th and the excepted production and dispatches during the last few days of the month (Fig. 27.7). All the production shops are given the abovedetailed assembly-wise program on the first of every month. Planning for the press shop: Since the press shop has to work on batch production while the other shops in general have continuous flow, the planning of the machine loading for each press is more critical. The batch quantity for each item may be decided depending upon the inventory carrying costs and setup costs. However, initially we will decide subjectively the batch size between 5000 and 6000, which will be confirmed later by experience.
FIGURE 27.7 Monthly production planning chart.
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27.13 Route sheet As explained in Chapter 22, Routing, scheduling and loading, route sheets, also called sequence cards, detail the sequence of events and necessary materials for the production of a component. They are more useful for planning than for tracking. At the aggregate planning level, the route card or the process planning layout per Fig. 27.6 is used, while at the machine loading level the route sheet is used, illustrated by Fig. 27.8.
27.14 Work order A work order is translated from the sales order to show when the work on the manufacture, building, or engineering of the products requested by the customer is to begin. A work order should include elements that help the person or people who will be fulfilling the work order to know exactly what the customer wants. After scheduling the work, the first function of the PP&C department is to release the work orders. A work order is a customer or client order converted into an internal order to the concerned department to commence the production of that item. It is a specific or blanket authorization to perform certain work. It is synonymous to job order but is usually broader in scope than a job order. A work order may be for products or services. In a manufacturing environment, a work order is formalization of a sales order for the
FIGURE 27.8 Route sheet.
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Production Planning and Control
WORK ORDER/JOB ORDER CARD DEPARTMENT
OPERATOR
JOB ORDER NO.
PART NUMBER
PART NAME
DATE
OPERATION NO.
OPERATION
START DATE
FINISH DATE
QTY. TO PRODUCE
ACTUAL PRODUCED ACCEPTED
REJECTED
ACTUAL HOURS
STANDARD HOURS
EFFICIENCY
BONUS
LABOUR RATE
EXPENSES
OTHERS
PRODN. SUPERVISOR
PRODN. MANAGER
PLANNING DEPT.
MACHINE ACTUAL FINISH DATE
FIGURE 27.9 A work order used for production jobs.
commencement of the manufacture, building, or engineering of the products requested by the customer. In a service environment, a work order is a service order in which it records the location, date, and time the service is carried out and the nature of work that is done. Business Dictionary defines work order as written instructions to perform a work according to specified requirements, within a specified time frame and cost estimates. It is an internal authorization to incur costs in the design, development, and production of a specific product. Note that different nomenclature may exist in different companies, for this as the job order, work instruction, etc. Nevertheless, it is hence essential for a consultant to understand the relevance of this terminology and arrive at a conclusion. Fig. 27.9 illustrates a work order used in a medium-scale engineering industry for production jobs, and Fig. 27.10 illustrates a work order used for maintenance jobs. The basic information to be included in a work order is: G G G G G G G G
the name of the product, the name of the part to be produced, subassembly or final assembly, the order number, the quantity to be produced, descriptions and numbers of the operations required and their sequence, the departments involved in each operation, the tools required for particular operation, and machines involved in each operation and starting dates for the operations.
27.15 Material warrants Along with the work orders, material warrants would be released authorizing the operatives to draw the required materials from the stores.
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W.O.# (1)
FACILITIES MAINTENANCE WORK ORDER WICN:
(2)
Priority: (3)
RSD:
(4)
RCD:
Type:
(6)
SI:
Class:
(8)
Facility #: (9)
(7)
Accounting Data:
(11)
POC:
(13)
Title:
(16)
General Description:
(17)
Phone:
(5)
(14)
UDF:
(10)
UDF:
(12)
Equip.#:
(15)
WORK ORDER ESTIMATE WORK BREAKDOWN
ESTIMATE SUMMARY (25)
Line #
Shop
WORK TASKS
HRS
(18)
(19)
(20)
(21)
Special Instructions:
(22)
Continuation:
(23)
Shop
HRS Labor Mtl.
Total
Subtotal: Contingency:
Sketches:
(24)
Approved:
(26)
Overhead, etc.: Total Estimate:
Date:
(27)
Estimate Basis: (28)
c FIGURE 27.10 A work order used for maintenance jobs. NASA Procedures and Guidelines, NPR 8831.2D, now declared obsolete. Cited here as an illustration.
Based on these production targets and the BOM supplied by the engineering department, the requirement of raw materials, purchase components like screws and consumables, would be computed. For each of these, the material warrants as detailed and illustrated in Fig. 27.11 would be issued authorizing the production department to collect the materials from the stores.
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FIGURE 27.11 Material warrants for raw materials.
Though small units use a common form for all types of materials, it is common for the medium- and large-scale industries to devise separate forms for the raw materials, the general supplies, and the components, because the data to be filled in for each type of material is different. These forms are illustrated in Figs. 27.11 and 27.12. Material warrants for raw materials will be cyclostyled shop-wise, and the monthly requirement would be released daily or as required along with the work order. The bottom half of this portion to be used by the production control department for progress checking and reporting by recording the day-to-day flow of material or work in progress as indicated. This flow will be indicated in the material warrant (Fig. 27.11), which will be valid from the first operation to the last operation, even though it flows through different cost centers at the end of the day. Planning department notes the details of the components passed on daily to the next cost center and ultimately to the finished good stores as a followup tool. Material warrants for all components and general supplies will be cyclostyled shop-wise, and the monthly requirement would be released once a month.
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27.16 Time ticket A time ticket is kept on each machine during an operation for displaying basic operation information, and it is mainly used as ready reckoner to the operator and the supervisor and not from drawing the materials from stores, which can be done only by material warrants. Fig. 27.13 illustrates a time ticket issued in a medium-scale engineering industry.
FIGURE 27.12 Material warrants for components and general supplies.
TIME TICKET DEPARTMENT
OPERATOR
JOB ORDER NO.
PART NO.
PART NAME
DATE
OPN. NO.
OPERATION
MACHINE
TIME ON
TIME OFF
ISSUED FOR HOURS
QTY. TO PRODUCE
CLOCK NO.
LABOUR RATE
PRODN. SUPERVISOR
PRODN. MANAGER
FIGURE 27.13 Time ticket used in an engineering industry.
EXTENSION
PLANNING DEPT.
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Production Planning and Control
27.17 Move order The production planning department issues the move order to ensure that the right materials are moved from stores to the work site, from one work station to the subsequent work station, and also from the last operation to the stores. This order may also indicate and list the operator accessories needed for the operation but not issued from the stores. Fig. 27.14 illustrates a move order used in a medium-scale engineering industry.
27.18 Inspection order An inspection order raised by the production planning department authorizes the quality control department and the inspector to check the quality of produce in all the necessary aspects. It lists the basic details of the component and the operation, and the inspector is expected to record the accepted quantity, the reasons for rejection, and his other remarks. Fig. 27.15 illustrates an inspection order used in a medium-scale engineering industry.
27.19 New item indent request The codification program conducted in a large-scale engineering industry during the early 1970s, as illustrated in Chapter 29, Scientific inventory control, revealed an interesting fact that every department indents for a new item, required its own specification. Since the purchasing personnel are not qualified enough to distinguish and equate these with identical items existing in the stores, they get purchased and stocked with a different specification. Even the indenting person finds it difficult to check from among several specifications listed in the code books. For example, a single bearing required for a machine was purchased under eight different brand names either as a proprietary item or as a general supply from different manufacturers like NBC or SKF with their own code number. Thus the same item gets stocked under the specification given by the indenting department, resulting in MOVE ORDER PART NUMBER
PART NAME
OPERATION NO.
OPERATION
INSPECTION ORDER NO. DATE
QUANTITY TO MOVE
OPERATOR
MACHINE
Move from Move to INSPECTOR/SQC
MACHINE
BUILDING
SITE
PRODUCTION SUPERVISOR
PRODUCTION MANAGER
PLANNING DEPT.
FIGURE 27.14 Move order used in an engineering industry.
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INSPECTION ORDER PART NUMBER
PART NAME
MOVE ORDER NO.
OPERATION NO.
OPERATION
QTY TO PRODUCE
DEPARTMENT
OPERATOR
MACHINE
QTY PRODUCED
QTY INSPECTED
ACCEPTED
REJECTED
INSPECTOR’S REMARKS PLANNING DEPT.
PRODN. SUPERVISOR
PRODN. MANAGER
QUALITY CONTROL
FIGURE 27.15 Inspection order used in an engineering industry.
NEW ITEM INDENT REQUEST
Sl. No.
Indenting Department Item/ Qty Unit Specification
Authorized by Date Required
This is to certify that this item does not exist in the stores under any specification. (Authorized by*)
(* to be signed by the R&D Manager for production items and by the Maintenance Manager for maintenance items. ) FIGURE 27.16 New item indent request.
unrealized duplication. To alleviate this, the new item indent request was introduced as per Fig. 27.16, where the maintenance engineer for maintenance items and the design engineer for production items have to certify that this is new and there is no such item in the existing stock.
27.20 Production control statements While the preceding formats form parts of the loading and dispatching activities, the monthly/daily planning sheet illustrated in Fig. 27.7 could be used for the expediting and reporting activities of production control purpose. Under the daily/weekly schedules, the actual production would be filled and
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Production Planning and Control
in the remarks column the reason for the shortfall would be indicated. This would be taken up during the production meetings held at the end of the day or at the end of the week, as the case may be. These statements and charts are prepared and submitted for management as a tool for the continuous appraisal of production. Some of the other reports submitted by the PP&C department to the management periodically are as follows: 1. Daily statement of the stock of the various subassemblies prepared by the stores. 2. Daily statement of the stock of the various components needed for the subbasement and final assembly of the bicycle prepared by the stores. 3. Daily report of the production figure for each component and remaining totals of the items sent to finished goods stores prepared by the planning department. 4. Daily production booking from various shops for the component-wise output prepared by the planning department. This helps in assessing the shop performance as well as the work-in-progress status. 5. Monthly statement by progress chasers gives stage-wise stocks of various components, which are to be compared with the monthly physical stock taking.
27.21 Conclusion Even though computerization has revolutionized the PP&C function, the basic principles and precepts remain the same as practiced during the 20th century and as illustrated in this chapter. The formats described in the earlier sections provide the needed inputs for software engineers to develop specific software suitable for these applications, which have improved the speed and effectiveness of the PP&C activities in industry. The author, as the planning manager of Rallifan, Surat, developed and introduced several PP&C systems and formats as described in this chapter. Subsequently, in a similar position at the National Bicycle Company of Tanzania during its project stage, he had the opportunity to also introduce these formats there.
Further reading 1. Proceedings of the Work shop on Challenges in Production Planning and Control in the New Millennium, IIPE and NIQR, February 2002. 2. Kiran, D.R., 1980. Report on the Introduction of Systems and Procedures for Bicycle Industry. Submitted to NABICO (National Bicycle Company) of Tanzania.
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Criteria questions (The figures in the bracket provide a clue to the answer.) 1. Why do we need to develop systems and formats for effective production management? (27.1, 27.2) 2. Explain how the work study data helps in PP&C. (27.3) 3. Explain how machine-wise operational timings and machine capacities are arrived at from the work study data. (27.7) 4. What information is carried in the process planning layouts? (27.9) 5. What is a BOM? Illustrate. How does it help in preparation of material warrants? (27.10, 27.14) 6. Distinguish between work order and move order. (27.17) 7. What is the need for a new item indent request? Illustrate with a case study different from the one given in the text. (27.19) 8. Illustrate some of the production control statements. (27.20)
Systems and procedures Chapter takeaways After completion of this chapter the reader would be able to 1. Appreciate the need to adapt systematic procedures and formats for the day-today production planning activities. 2. Appreciate how the industrial engineering studies provide the basic data for the production planning procedures. 3. Understand the different formats that are to be used for the production planning function. 4. Appreciate the significance of the process planning layout sheets and machinewise operational timings to plan effective scheduling. 5. Learn several production planning and control formats like work orders, material warrants, time tickets, move tickets, and inspection tickets.
27.1 Development of systems and procedures For all production planning and control (PP&C) tasks to be effectively executed, it is essential to develop and define the exact system and procedure to be followed for the execution of each and every task, so that any ambiguity or personal preferences are eliminated and everybody knows what exactly to do in the routine course as well as whenever specific situations occur. The development of formats and charts like route card and job order is a major step in this direction. This chapter discusses these formats in the form of a presentation of a case study based on the systems developed by the author at the Surat unit of Rallifan and subsequently at the National Bicycle Company of Tanzania. This case study also includes the basic formats and procedures involved in the development of time standards, which provide the basic input information for planning.
27.2 Uses of systems and procedures 1. 2. 3. 4. 5.
Higher productivity Consistency Better quality of work and customer service Protection from the unexpected and unpleasant Ability to expand and grow quickly
Production Planning and Control. DOI: https://doi.org/10.1016/B978-0-12-818364-9.00027-5 Copyright © 2019 BSP Books Pvt. Ltd. Published by Elsevier Inc. All rights reserved.
381
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6. Continuity of effective functioning of the systems even if the head is absent 7. Perspective of overview of what is happening to be able to make correct and effective decisions (Fig. 27.1)
27.3 Industrial engineering systems and formats Fig. 27.2 illustrates several procedures and formats that are needed for the optimal functioning of the PP&C department. These are classified into four basic groups as cited next, starting with the operational standard times by the work study section. It may nevertheless be
FIGURE 27.1 Development of product planning and control systems and formats.
Work measurement
A
Operational standard time determination Standard declaration forms Component wise standard times B
Machine wise standard times Machine capacities
Production sequencing and scheduling Production controlling formats and procedures Job order C
Material warrants Time ticket Move order Inspection order
D
A B C D
Progress control Gantt chart et al.
Industrial engineering Production planning Machine loading and production control Progress control
FIGURE 27.2 How work measurement precede the production planning and control procedures and formats.
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noted that formats like machine-wise standard times may overlap into more than one category depending upon which section, whether work study, the production planning, or the production control performs the recordings. These are cited next. 1. The industrial engineering (work study) formats to record the operational timings a. Work measurement b. Operational standard time determination c. Standard declaration forms d. Component-wise standard times 2. Production planning and scheduling formats a. Machine-wise standard times b. Machine capacities c. Production sequencing and scheduling 3. Machine loading and production control formats a. Job order b. Material warrants c. Time ticket d. Move order e. Inspection order 4. Progress control formats a. Gantt chart b. Sched-U graph c. Sched-U chart d. Visual control chart e. Cumulative and weekly chart
27.3.1 How work study precedes the production planning and control procedures and formats The operation flowchart, which indicates the flow of the components from equipment to equipment and the standard times for each operation, forms the basis for the scheduling and control function. Thus setting up the operational standard times and other industrial engineering aspects need to be understood before understanding the production control systems. The systems and formats used for the industrial engineering functions are hence illustrated in this chapter.
27.4 Standard time declaration Note that a majority of the production planning engineers have industrial engineering background, reporting to either the chief industrial engineer or the planning manager. The planning engineer or his industrial engineering
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Production Planning and Control
counterpart would first establish the operation-wise standard times. Each operation will be split up into elements and timed with a stopwatch using the time study sheets as per Fig. 5.7. This would be summarized for each component as component-wise standard times indicating the series of machines used for each operation.
27.5 Operational time standards Operational time standards would be declared in the standard declaration form for each operation per Fig. 5.8, defining the standard and budgeted timings.
27.6 Component-wise operational timings Component-wise operational timings are tabulated and the total standard as well as the budgeted time for each component is computed per Fig. 27.3. A budget allowance of 15% 25% is added to the standard times to get the budgeted time, which would be used for the following computations.
27.7 Machine-wise operational timings 1. Similar summary would be made for all the operations performed for various components worked on a particular machine or work center group, as per Fig. 27.4, and a machine-wise operational timing as per Fig. 27.4 will be prepared.
FIGURE 27.3 Component-wise operational timings.
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FIGURE 27.4 Machine-wise operational timings.
27.8 Machine capacity computation The preceding information would be rematrixed as machine-wise standard times to indicate the total time each machine would be occupied in a certain period, say in a day or in a week. From this, the capacity of the machine in terms of number of units of the component that can be produced by the machine per year is calculated as illustrated in Fig. 27.5. Here the budgeted time would be used instead of the standard time to take care of exigencies like delays other than machine breakdowns. In case of machines working on various components, the capacity would be calculated considering the proportion of the components in the product.
27.9 Process planning layout sheets Process planning layout sheets (Fig. 27.6), sometimes known as process routing sheets, are akin to the standard operation procedures given to the operatives. These consist for each component of the name of the machine together with the details of cutting tools, operation speeds, feeds the jigs, fixtures, inspection tools, etc., that would be required by the operator as well as the standard times, etc., as a guidance to the operator. These normally would be released by the engineering department or the industrial engineering department to the production, planning, and costing departments. Also to be prepared are the cost center wise standard time for each assembly.
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Production Planning and Control
FIGURE 27.5 Machine capacity computations.
PROCESS PLANNING LAYOUT PART NO.
AUTHORIZED
PART NAME ASSEMBLY
DEPT.
DATE
NAME
BY
SHEET No. …..OF ….….
Sl.
OP,
OPERATION MACHINE HOURLY
SPEEDS
NO
NO
OUTPUT
& FEEDS
TOOLS & JIGS & GAGES
QUALITY
REMARKS
FIXTURES STANDARDS
FIGURE 27.6 Process planning layouts.
27.10 Bill of materials A bill of materials (BOM) is a list of the parts or components that are required to build a product and indicates the details and quantities of all the materials like raw materials, consumables, general supplies, and components like screws that are required to be drawn by the operator. For producing for example 1000 U of the final product, the requirement of raw materials would be computed and tabulated as the BOM. This may be prepared either by the design department or the industrial engineering department based on the
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production targets and released to the production, planning, and costing departments. As explained in Chapter 30, Material requirement planning, it is an essential requirement when an organization is using a material requirements planning system and is used to calculate the cost of a product, as well as to order parts from suppliers. Table 30.2 illustrates the BOM for tramp oil remover.
27.11 Revision frequency of the time standard data The time study and standard establishment is a continuous process, whereas standards per Figs. 27.1 27.5 will be reviewed and revised once a year based on which annual budget time standards for each component and assembly will be computed.
27.12 Production planning and control systems and formats The four formats cited in Section 27.3 form the basis for the subsequent PP&C activities like product sequencing, routing, and scheduling. The subsequent sections indicate the systems and formats used by the planning department for the actual PP&C activities.
27.12.1 Annual/aggregate planning Based on the annual sales forecast submitted 3 months before beginning of the year, the planning department will prepare an assembly-wise manufacturing schedule for the coming year, as discussed earlier Chapter 21, Aggregate planning, on aggregate planning and master production schedule.
27.12.2 Monthly production planning On the 25th of every month the production targets for the next month will be prepared based on the sales targets statement and physical stock statement as on 24th and the excepted production and dispatches during the last few days of the month (Fig. 27.7). All the production shops are given the abovedetailed assembly-wise program on the first of every month. Planning for the press shop: Since the press shop has to work on batch production while the other shops in general have continuous flow, the planning of the machine loading for each press is more critical. The batch quantity for each item may be decided depending upon the inventory carrying costs and setup costs. However, initially we will decide subjectively the batch size between 5000 and 6000, which will be confirmed later by experience.
FIGURE 27.7 Monthly production planning chart.
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27.13 Route sheet As explained in Chapter 22, Routing, scheduling and loading, route sheets, also called sequence cards, detail the sequence of events and necessary materials for the production of a component. They are more useful for planning than for tracking. At the aggregate planning level, the route card or the process planning layout per Fig. 27.6 is used, while at the machine loading level the route sheet is used, illustrated by Fig. 27.8.
27.14 Work order A work order is translated from the sales order to show when the work on the manufacture, building, or engineering of the products requested by the customer is to begin. A work order should include elements that help the person or people who will be fulfilling the work order to know exactly what the customer wants. After scheduling the work, the first function of the PP&C department is to release the work orders. A work order is a customer or client order converted into an internal order to the concerned department to commence the production of that item. It is a specific or blanket authorization to perform certain work. It is synonymous to job order but is usually broader in scope than a job order. A work order may be for products or services. In a manufacturing environment, a work order is formalization of a sales order for the
FIGURE 27.8 Route sheet.
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Production Planning and Control
WORK ORDER/JOB ORDER CARD DEPARTMENT
OPERATOR
JOB ORDER NO.
PART NUMBER
PART NAME
DATE
OPERATION NO.
OPERATION
START DATE
FINISH DATE
QTY. TO PRODUCE
ACTUAL PRODUCED ACCEPTED
REJECTED
ACTUAL HOURS
STANDARD HOURS
EFFICIENCY
BONUS
LABOUR RATE
EXPENSES
OTHERS
PRODN. SUPERVISOR
PRODN. MANAGER
PLANNING DEPT.
MACHINE ACTUAL FINISH DATE
FIGURE 27.9 A work order used for production jobs.
commencement of the manufacture, building, or engineering of the products requested by the customer. In a service environment, a work order is a service order in which it records the location, date, and time the service is carried out and the nature of work that is done. Business Dictionary defines work order as written instructions to perform a work according to specified requirements, within a specified time frame and cost estimates. It is an internal authorization to incur costs in the design, development, and production of a specific product. Note that different nomenclature may exist in different companies, for this as the job order, work instruction, etc. Nevertheless, it is hence essential for a consultant to understand the relevance of this terminology and arrive at a conclusion. Fig. 27.9 illustrates a work order used in a medium-scale engineering industry for production jobs, and Fig. 27.10 illustrates a work order used for maintenance jobs. The basic information to be included in a work order is: G G G G G G G G
the name of the product, the name of the part to be produced, subassembly or final assembly, the order number, the quantity to be produced, descriptions and numbers of the operations required and their sequence, the departments involved in each operation, the tools required for particular operation, and machines involved in each operation and starting dates for the operations.
27.15 Material warrants Along with the work orders, material warrants would be released authorizing the operatives to draw the required materials from the stores.
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W.O.# (1)
FACILITIES MAINTENANCE WORK ORDER WICN:
(2)
Priority: (3)
RSD:
(4)
RCD:
Type:
(6)
SI:
Class:
(8)
Facility #: (9)
(7)
Accounting Data:
(11)
POC:
(13)
Title:
(16)
General Description:
(17)
Phone:
(5)
(14)
UDF:
(10)
UDF:
(12)
Equip.#:
(15)
WORK ORDER ESTIMATE WORK BREAKDOWN
ESTIMATE SUMMARY (25)
Line #
Shop
WORK TASKS
HRS
(18)
(19)
(20)
(21)
Special Instructions:
(22)
Continuation:
(23)
Shop
HRS Labor Mtl.
Total
Subtotal: Contingency:
Sketches:
(24)
Approved:
(26)
Overhead, etc.: Total Estimate:
Date:
(27)
Estimate Basis: (28)
c FIGURE 27.10 A work order used for maintenance jobs. NASA Procedures and Guidelines, NPR 8831.2D, now declared obsolete. Cited here as an illustration.
Based on these production targets and the BOM supplied by the engineering department, the requirement of raw materials, purchase components like screws and consumables, would be computed. For each of these, the material warrants as detailed and illustrated in Fig. 27.11 would be issued authorizing the production department to collect the materials from the stores.
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FIGURE 27.11 Material warrants for raw materials.
Though small units use a common form for all types of materials, it is common for the medium- and large-scale industries to devise separate forms for the raw materials, the general supplies, and the components, because the data to be filled in for each type of material is different. These forms are illustrated in Figs. 27.11 and 27.12. Material warrants for raw materials will be cyclostyled shop-wise, and the monthly requirement would be released daily or as required along with the work order. The bottom half of this portion to be used by the production control department for progress checking and reporting by recording the day-to-day flow of material or work in progress as indicated. This flow will be indicated in the material warrant (Fig. 27.11), which will be valid from the first operation to the last operation, even though it flows through different cost centers at the end of the day. Planning department notes the details of the components passed on daily to the next cost center and ultimately to the finished good stores as a followup tool. Material warrants for all components and general supplies will be cyclostyled shop-wise, and the monthly requirement would be released once a month.
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27.16 Time ticket A time ticket is kept on each machine during an operation for displaying basic operation information, and it is mainly used as ready reckoner to the operator and the supervisor and not from drawing the materials from stores, which can be done only by material warrants. Fig. 27.13 illustrates a time ticket issued in a medium-scale engineering industry.
FIGURE 27.12 Material warrants for components and general supplies.
TIME TICKET DEPARTMENT
OPERATOR
JOB ORDER NO.
PART NO.
PART NAME
DATE
OPN. NO.
OPERATION
MACHINE
TIME ON
TIME OFF
ISSUED FOR HOURS
QTY. TO PRODUCE
CLOCK NO.
LABOUR RATE
PRODN. SUPERVISOR
PRODN. MANAGER
FIGURE 27.13 Time ticket used in an engineering industry.
EXTENSION
PLANNING DEPT.
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Production Planning and Control
27.17 Move order The production planning department issues the move order to ensure that the right materials are moved from stores to the work site, from one work station to the subsequent work station, and also from the last operation to the stores. This order may also indicate and list the operator accessories needed for the operation but not issued from the stores. Fig. 27.14 illustrates a move order used in a medium-scale engineering industry.
27.18 Inspection order An inspection order raised by the production planning department authorizes the quality control department and the inspector to check the quality of produce in all the necessary aspects. It lists the basic details of the component and the operation, and the inspector is expected to record the accepted quantity, the reasons for rejection, and his other remarks. Fig. 27.15 illustrates an inspection order used in a medium-scale engineering industry.
27.19 New item indent request The codification program conducted in a large-scale engineering industry during the early 1970s, as illustrated in Chapter 29, Scientific inventory control, revealed an interesting fact that every department indents for a new item, required its own specification. Since the purchasing personnel are not qualified enough to distinguish and equate these with identical items existing in the stores, they get purchased and stocked with a different specification. Even the indenting person finds it difficult to check from among several specifications listed in the code books. For example, a single bearing required for a machine was purchased under eight different brand names either as a proprietary item or as a general supply from different manufacturers like NBC or SKF with their own code number. Thus the same item gets stocked under the specification given by the indenting department, resulting in MOVE ORDER PART NUMBER
PART NAME
OPERATION NO.
OPERATION
INSPECTION ORDER NO. DATE
QUANTITY TO MOVE
OPERATOR
MACHINE
Move from Move to INSPECTOR/SQC
MACHINE
BUILDING
SITE
PRODUCTION SUPERVISOR
PRODUCTION MANAGER
PLANNING DEPT.
FIGURE 27.14 Move order used in an engineering industry.
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INSPECTION ORDER PART NUMBER
PART NAME
MOVE ORDER NO.
OPERATION NO.
OPERATION
QTY TO PRODUCE
DEPARTMENT
OPERATOR
MACHINE
QTY PRODUCED
QTY INSPECTED
ACCEPTED
REJECTED
INSPECTOR’S REMARKS PLANNING DEPT.
PRODN. SUPERVISOR
PRODN. MANAGER
QUALITY CONTROL
FIGURE 27.15 Inspection order used in an engineering industry.
NEW ITEM INDENT REQUEST
Sl. No.
Indenting Department Item/ Qty Unit Specification
Authorized by Date Required
This is to certify that this item does not exist in the stores under any specification. (Authorized by*)
(* to be signed by the R&D Manager for production items and by the Maintenance Manager for maintenance items. ) FIGURE 27.16 New item indent request.
unrealized duplication. To alleviate this, the new item indent request was introduced as per Fig. 27.16, where the maintenance engineer for maintenance items and the design engineer for production items have to certify that this is new and there is no such item in the existing stock.
27.20 Production control statements While the preceding formats form parts of the loading and dispatching activities, the monthly/daily planning sheet illustrated in Fig. 27.7 could be used for the expediting and reporting activities of production control purpose. Under the daily/weekly schedules, the actual production would be filled and
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in the remarks column the reason for the shortfall would be indicated. This would be taken up during the production meetings held at the end of the day or at the end of the week, as the case may be. These statements and charts are prepared and submitted for management as a tool for the continuous appraisal of production. Some of the other reports submitted by the PP&C department to the management periodically are as follows: 1. Daily statement of the stock of the various subassemblies prepared by the stores. 2. Daily statement of the stock of the various components needed for the subbasement and final assembly of the bicycle prepared by the stores. 3. Daily report of the production figure for each component and remaining totals of the items sent to finished goods stores prepared by the planning department. 4. Daily production booking from various shops for the component-wise output prepared by the planning department. This helps in assessing the shop performance as well as the work-in-progress status. 5. Monthly statement by progress chasers gives stage-wise stocks of various components, which are to be compared with the monthly physical stock taking.
27.21 Conclusion Even though computerization has revolutionized the PP&C function, the basic principles and precepts remain the same as practiced during the 20th century and as illustrated in this chapter. The formats described in the earlier sections provide the needed inputs for software engineers to develop specific software suitable for these applications, which have improved the speed and effectiveness of the PP&C activities in industry. The author, as the planning manager of Rallifan, Surat, developed and introduced several PP&C systems and formats as described in this chapter. Subsequently, in a similar position at the National Bicycle Company of Tanzania during its project stage, he had the opportunity to also introduce these formats there.
Further reading 1. Proceedings of the Work shop on Challenges in Production Planning and Control in the New Millennium, IIPE and NIQR, February 2002. 2. Kiran, D.R., 1980. Report on the Introduction of Systems and Procedures for Bicycle Industry. Submitted to NABICO (National Bicycle Company) of Tanzania.
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Criteria questions (The figures in the bracket provide a clue to the answer.) 1. Why do we need to develop systems and formats for effective production management? (27.1, 27.2) 2. Explain how the work study data helps in PP&C. (27.3) 3. Explain how machine-wise operational timings and machine capacities are arrived at from the work study data. (27.7) 4. What information is carried in the process planning layouts? (27.9) 5. What is a BOM? Illustrate. How does it help in preparation of material warrants? (27.10, 27.14) 6. Distinguish between work order and move order. (27.17) 7. What is the need for a new item indent request? Illustrate with a case study different from the one given in the text. (27.19) 8. Illustrate some of the production control statements. (27.20)