What are the four types of production planning and control?

09 Apr.,2024

 

What you’ll learn to do: explain the components involved in planning and scheduling the production process

Production doesn’t happen by magic. Think about hosting a large party for your parents’ anniversary. The first thing you have to do is find a location that is large enough to accommodate all the people you will be inviting. Once you have identified the location, you then need to visit the site and decide how it will be laid out. Where should the tables and chairs go, where will you set up refreshments, and what about a gift table? Once you’ve decided on the layout, then you need to start making a list of the materials you’ll need for the party. This includes everything from plates, cups, and napkins to hiring a DJ and a caterer. Lastly, based on the number of guests, you’ll need to calculate how much of everything—food, drinks, etc.—to order.

Operations managers engage in similar planning, but they use different terminology to describe the different parts of the plan. In production planning, the components are facility location, facility layout, materials-requirement planning (MRP), and inventory control.

Learning Objectives

  • Explain facility layout
  • Explain just-in-time inventory control (JIT)
  • Differentiate between Gantt charts, PERT, and the critical path method

Facility Location and Layout

Facility Location

Of all the pieces of the planning puzzle, facility location is the most strategic and critical. Once you build a new manufacturing facility, you have made a substantial investment of time, resources, and capital that can’t be changed for a long time. Selecting the wrong location can be disastrous. Some of the key factors that influence facility location are the following:

  • Proximity to customers, suppliers, and skilled labor
  • Environmental regulations
  • Financial incentives offered by state and local development authorities
  • Quality-of-life considerations
  • Potential for future expansion

The next step, after planning the production process, is deciding on plant layout—how equipment, machinery, and people will be arranged to make the production process as efficient as possible.

Facility Layout

The primary aim of facility layout is to design a workflow that maximizes worker and production efficiency. Facility layout is complex because it must take into account the available space, the work processes, the delivery of components and parts, the final product, worker safety, and operational efficiency. A poorly laid-out production facility creates inefficiencies, increases costs, and leads to employee frustration and confusion.

The four most common types of facility layout are process, product, cellular, and fixed position.

Process Layout

A process layout aims to improve efficiency by arranging equipment according to its function. Ideally, the production line should be designed to eliminate waste in material flows, inventory handling, and management. In process layout, the work stations and machinery are not arranged according to the production sequence. Instead, there is an assembly of similar operations or similar machinery in each department (for example, a drill department, a paint department, etc.)

Product Layout

In a product layout, high-volume goods are produced efficiently by people, equipment, or departments arranged in an assembly line—that is, a series of workstations at which already-made parts are assembled.

In the following video, Jansen, a Swiss steel maker, describes how the company’s offices were designed to maximize the productivity and creativity of its engineers:

Cellular Layout

A cellular layout is a lean method of producing similar products using cells, or groups of team members, workstations, or equipment, to facilitate operations by eliminating set-up and unnecessary costs between operations. Cells might be designed for a specific process, part, or a complete product. The goal of cellular manufacturing is to move as quickly as possible and make a wide variety of similar products with as little waste as possible. This type of layout is well suited for single-piece and one-touch production methods. Because of increased speed and minimal handling of materials, cells can result in great cost and time savings and reduced inventory.

Fixed Position

It is easy to move marshmallow candies around the factory while you are making them, but what about airplanes or ships? For the production of large items, manufacturers use fixed-position layout in which the product stays in one place and the workers (and equipment) go to the product. To see an excellent example of fixed-position layout, watch the following video that shows how Boeing builds an airplane.

Materials Planning and Inventory Control

After the facility location has been selected and the best layout has been determined, the next stage in production planning is to determine our material requirements.

Material-Requirements Planning (MRP)

Material-requirements planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, but it is possible to do MRP by hand, as well.

An MRP system is intended to meet the following objectives simultaneously:

  • Ensure that materials are available for production and products are available for delivery to customers
  • Maintain the lowest possible material and product levels in store
  • Plan manufacturing activities, delivery schedules, and purchasing activities

Some manufacturing firms have moved beyond MRP systems and are now using enterprise resource planning (ERP) systems. ERP systems provides an integrated and continuously updated view of core business processes using shared databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments—orders, purchase orders, and payroll. The applications that make up the system share data from and between various departments (e.g., manufacturing, purchasing, sales, accounting, etc.). ERP facilitates information flow between all business functions and manages connections to outside stakeholders.

Even with the implementation of highly integrated planning software, operations managers still need to plan for and control inventory.

Just-in-Time (JIT) Manufacturing

Just-in-time (JIT) manufacturing is strategy that companies employ to increase efficiency and decrease waste by receiving goods only when they are needed in the production process, thereby reducing inventory costs. In theory, a JIT system would have parts and materials arriving on the warehouse dock at the exact moment they are needed in the production process. To make this happen, manufacturers and suppliers must work together closely to prevent just-in-time from becoming just-isn’t-there. Operations managers must accurately forecast the need for materials, since even the slightest deviation can result in a slowdown of production.

Scheduling Tools

Izmailovo Hotel complex, Moscow, Russia

As you might expect, operations managers find that complex processes involve complex planning and scheduling. Consider the Izmailovo Hotel in Moscow shown in the photograph at the right. Built to house athletes during the 1980 Olympics, the complex has 7,500 guest rooms and is the largest hotel in the world. Think about cleaning all those rooms—in four thirty-story-high towers—or checking in the thousands of guests. No small operation! Although the Izmailovo doesn’t produce a tangible good, it relies on many of the same operations management principles used in manufacturing to stay in business. To increase operational efficiency in complex processes like those of running a giant hotel, operations managers use three common planning tools: Gantt charts, PERT, and the critical path method (CPM).

Gantt Charts

A Gantt chart is a timeline. Multiple projects can be added to the timeline with start and finish dates, and milestones and deadlines are also reflected. This chart is used to determine how long a project will take, the resources needed, and the order in which tasks need to be completed.

Let’s look at a Gantt chart for producing a birdhouse. Suppose the following activities are required to build and package each birdhouse:

  1. Determine which birdhouse the customer has ordered
  2. Trace pattern onto wood
  3. Cut the pieces of wood from the birdhouse pattern
  4. Assemble the pieces into a birdhouse
  5. Paint birdhouse
  6. Attach decorations to the birdhouse
  7. Prepare a shipping carton
  8. Pack birdhouse into shipping carton
  9. Prepare customer invoice
  10. Prepare packing slip and shipping label
  11. Deliver carton to shipping department

Below is the corresponding Gantt chart:

Figure \(\PageIndex{1}\). Gantt Chart

As you can see, the tasks on the list are displayed against time. On the left of the chart are all the tasks, and along the top is the time scale. A bar represents each work task; the position and length of the bar indicate the start date, duration, and end date of the task. At a glance, we can determine the following:

  • What the various activities are
  • When each activity begins and ends
  • How long each activity lasts
  • Where activities overlap with other ones, and by how much
  • The start and end date of the whole project

PERT

Gantt charts are useful when the production process is simple and the activities are not interdependent. For more complex schedules, operations managers use PERT, which stands for “program evaluation and review technique.” This is a method of analyzing the tasks involved in completing a given project, especially the time needed to complete each task and to identify the minimum time needed to complete the total project. PERT was developed primarily to simplify the planning and scheduling of large and complex projects. The key to this technique is that it organizes activities in the most efficient sequence. It can also help managers determine the critical path, which is discussed below.

Critical Path Method (CPM)

The critical path method (CPM) is a step-by-step technique for process planning that identifies critical and noncritical tasks in order to prevent time-frame problems and process bottlenecks. The CPM is ideally suited to operations consisting of numerous activities that interact in a complex manner. It’s often used in conjunction with PERT.

The essential technique for using CPM is to construct a model of the project that includes the following:

  1. A list of all activities needed to complete the project
  2. The time that each activity will take to complete,
  3. The dependencies between the activities and,
  4. Logical end points such as milestones or deliverable items.

Using these values, CPM calculates the longest path of planned activities (expressed in time) to logical end points or to the end of the project, and the earliest and latest that each activity can start and finish without making the project longer. This process determines which activities are “critical” (i.e., on the longest path) and which can be delayed without extending the overall project duration. Take a look at Figure 2, below. What was the critical path in our construction of a birdhouse?

Figure \(\PageIndex{2}\). Critical Path

Our critical path was the path that took the longest amount of time! This was sequence of activities that included the customer invoice and packing and shipping label (from the start to G to H), which totaled 180 minutes. The problem is that even if we were able to assemble and decorate the birdhouse faster, the birdhouse would just and wait for the paperwork to be completed. In other words, we can gain efficiency only by improving our performance in one or more of the activities along the critical path.

did you know...?

PERT was developed by the U.S. Navy. The Navy’s Special Projects Office devised this statistical technique for measuring and forecasting progress while they were designing the Polaris-Submarine weapon system and the Fleet Ballistic Missile capability.

CPM was first used for major skyscraper development in 1966 for the construction of the former World Trade Center Twin Towers in New York City.[1]

  1. Kerzner, Harold (2003). Project Management: A Systems Approach to Planning, Scheduling, and Controlling (8th ed.) ↵

 

What's Production Planning?

Production planning is the process of creating a plan for future production within a manufacturing organization. This technique is essential for modern-day manufacturing operations as it establishes the groundwork for how production should be running and identifying areas where productivity is lacking.

Without production planning, manufacturing facilities are unable to schedule their production processes efficiently which limits the entire production output. When mistakes are made during the planning process, the result is an inaccurate schedule leading to late orders, internal chaos, unhappy customers, and lost business.

The creation of a production plan encompasses many different areas that must come together to create a single plan and set the targets of production. One of the main goals of the production plan is to use all available resources and materials efficiently. By looking at your available inventory when creating your plan to purchase materials, you will ensure that you only need to buy what you do not currently have on-hand to supply your jobs.

In addition, the production plan will ensure that you are not overloading your resources by only planning work on resources that have additional capacity. This will also allow you to identify areas where resources or workers are not used as efficiently as they can.

 

Five Types of Planning in Production

The following section defines five types of production and planning methods:

1) Job-Based Planning

Job-Based or Project-Based production focuses on manufacturing a single product and is either handled by a single worker or by a group of people. The type of jobs that fall under this type of production planning can be on a small scale, such as creating a customized piece of jewelry. Larger, more complex production projects, such as building customized houses, also fall into this category.

Production planning for small-scale jobs that require very little specialized equipment is relatively easy to execute. This allows products to be made according to their customer’s requests and can usually be included at any time during the production process without altering its progress.

2) Batch Method

Batch production is used when items are produced in groups, rather than individually or through continuous production. For example, cookies are produced in batches which means that each production step occurs at the same time on the batch of cookies. You will start by measuring the ingredients for the entire batch, then mix them together, and finally bake them together so that the entire production process for the batch of cookies starts and ends at the same time.

The challenge that can occur when using Batch Production planning is accounting for the constraints at each operation step to ensure that you maximize your resource capacity without going over the maximum limit allowed. For example, if your dough mixer can fit a batch of 100 cookies, but you can only bake 300 at a time, you may encounter bottlenecks in production.

3) Flow Method

Flow manufacturing is a demand-driven method that is characterized by the continuous flow of units through the production line. This technique is commonly used in the production of televisions and household appliances where the product is manufactured by a number of collective operations in which materials move from one stage to another without time lags or interruptions.

The benefits of the flow method of production are that manufacturers can minimize the number of work-in-process and finished goods items they hold in inventory, reduce costs, and reduce manufacturing lead times. 

4) Mass Production Method

Mass Production is very similar to Flow Production. This technique is highly beneficial when producing a large number of the same items in a short period of time.

This type of production is usually automated, which reduces the costs of labor required for production. Some manufacturing facilities have assembly lines dedicated to a specific type of item which reduces the changeover time required and increases the overall production output. This allows manufacturers to increase their profits as the cost of production is greatly reduced.

With this method, operations are scheduled based on the available resource capacity and the production time required at each operation.

5) Process Manufacturing Method

Process Production is a type of continuous process similar to Mass Production and Flow Production but is characterized by the continuous flow of materials through the production line. Usually, the finished goods produced in this type of production are not counted as discrete units. For example, the production and processing of liquids, gases, or chemicals where the product is being produced in a uniform and standardized sequence.

The Process Method uses specific and sophisticated machinery to process materials at each operation step. There is little room for error in this type of manufacturing as changing from one item type to another will require a long changeover period. It is also common to have by-products or waste that result from this type of manufacturing.

 

 

Production Planning Technology

Understanding the different types of production is essential before implementing a method of planning that fits your operation. There are many benefits that come with creating a production plan for your manufacturing facility. However, it can be challenging to account for every machine, resource, material, and shift schedule. This is why many manufacturers are turning towards Advanced Planning and Scheduling (APS) systems such as PlanetTogether APS.

With PlanetTogether, we now have a consistent tool for our planning and scheduling that is used by most of the departments, including supervisors, production planners, purchasing, IT staff, and management.

BRUCE HAYS, DIRECTOR OF MANUFACTURING, J&J SYNTHES

PlanetTogether is an extremely beneficial tool for manufacturers as it allows for concurrent planning and scheduling. Too often, manufacturing companies have production plans that get disconnected from the materials and capacity scheduling processes of the work centers. This leads to the creation of an inaccurate and often not feasible production schedule. By planning and scheduling your production at the same time, you will be able to commit quickly to delivery dates and be able to meet those promised dates.

 

Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With PlanetTogether APS you can:

  • Create optimized schedules that balance production efficiency and delivery performance

  • Maximize throughput on bottleneck resources to increase revenue

  • Synchronize supply with demand to reduce inventories

  • Provide company-wide visibility to resource capacity

  • Enable scenario data-driven decision making

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!

What are the four types of production planning and control?

Five Types of Production Planning