26/05/2025

PRODUCTION MANAGEMENT

TYPES OF PRODUCTION
Types of Production
(a) Job Production

This is the ‗special order‘ or ‗one off project‘ type. This type of production is the manufacture of a single
complete unit by an operator or group of operators. It is usually carried out by firms engaged on sub-
contract work such as tool making, machining, sub-assembly for larger firms concentrating on mass
production. Jobs are carried out to the customer‘s special requirements or specifications e.g., ship
building, bridge building, dam construction, etc. Since the labour and equipment must be flexible to
accommodate the continually changing jobs, this type of production often leads to inefficient utilization of
labour and time.
(b) Batch Production

This is where items are required in a fixed quantity or batch to fulfil a special order. The items are
completed in one run and machines re-tooled for other jobs. Also when certain machines and processes
supply a variety of products to certain departments or lines, a batch of say 2 months work of product ‗A‘
is made and the machine is changed over to product ‗B‘.
(c) Process Production

It is where a product goes through a sequence of stages of production through different processing units.
It is more associated with automation where raw materials are fed at one end, automatically goes through
the various processing stages and the end product comes out at the other end. Plants associated with
process production include motor vehicle manufacture, cement, beer, sugar, fruit processing, etc.
(d) Mass Production

This is when production is organized on batch production basis. The batches follow each other
continuously.
(e) Flow Production

When the products are required in a continuous supply, the production can be arranged to flow from one
operation to the next. It involves arranging machines in sequence to the product requirements so that by
the time the product reaches the last machine it is at the finishing stage.

9.4 Production Planning and Control

The planning section of this department is responsible for planning the products through the
manufacturing stages, which include the manufacturing of components, assembly, finishing and packing
by deciding on how and where the production should be carried out. It ensures efficient loading of the
manufacturing department. It does so by ensuring optimum utilization of available plant facilities and
operating the plant at the highest possible efficiency.
Production control ensures that while the product is being manufactured, the programmed output is
constantly maintained. It ensures that there is coordinated flow of work that leads to the right quantity and
quality before delivery date.
The objectives of production planning and control are:
(a) Meeting delivery dates

When a work order is placed for a given job, time is also given at which the job must be completed.
(b) Ensurety of smooth continuous production
This is to ensure work is evened out so that no machines are left idle while others are overloaded. Also
ensures continuous work progression.
(c) Use of manpower and equipments to the best advantage

With jobs in production all the time and operations evened out means that machines, equipment and
manpower are put to the best use. It avoids paying idle workers, holding up capital through idle machines
and possible loss of reputation.
(d) Efficient use of raw materials

Through proper control raw materials are best utilized by preventing spoilage or scrapping. This is
possible by inspecting the work at definite intervals during manufacturing to ensure that the production is
within tolerances.
(e) Prevention of bottlenecks in production

Hold ups or bottlenecks in production such as absence of a tool for drilling when required is prevented
through production planning where all tools required at a specified stage in production are listed.

LOCATION OF THE PLANT

The choice of location of site follows an assessment of demand, size and input requirements and the
effect upon the operation of the unit, and upon the group as a whole if it is part of a geographically
dispersed group. It is both equally important to new or existing businesses. It is worth differentiating
between the problems of location and of site: the location is the general area such as a geographical
region, and the site is the place chosen within the location. The decision on siting thus probably proceeds
in two stages; in the first the general area is chosen, and then a detailed survey of that area is carried out
to find possible sites. The sites are then ranked and one chosen.
Factors that will influence the choice of location:
(a) Availability of raw materials: This ensures regular supply of the materials and reduces production
cost. The technical and legal problems associated with raw materials can be reviewed and discussed
from time to time.
(b) Proximity to potential markets: This allows the management to keep close touch with the changes
in the market environment and formulate its production policies accordingly. The transportation and other
overheads are likely to increase with the distance between plant and the market.
(c) Integration with other group companies: If the new plant is one of a number owned or operated by
a single group of companies it should be so situated that its work can be integrated with the work of
associated units. This ensures that the group be considered as an entity, not as a number of independent
units.
(d) Availability of labour: Labour may be more readily available in some cases than in others. It is very
rare today that a location can be found which has approximately skilled and unskilled labour both readily
available. The choice has to be made between a location where skilled men exist but are not readily
available and one where there is a supply of unskilled labour.
(e) Availability of transport and communication: If the ratio of the product weight to its value is high,
then more emphasis should be given to the transportation cost. Goods intended for export indicate a
location near a seaport or a large airport.
(f) Political situation: The political situation in potential locations should be considered. Even if other
considerations demand a particular location, knowledge of the political situation and local prejudices can
assist in taking decisions.

The following factors will then be important in selecting the site:

Availability of services: There are five main services which need to be considered.
Gas
Electricity
Water
Drainage
Disposal of waste

Certain industries use considerable quantities of water – food preparation, laundries, and metal plating,
etc, others use a great deal of electricity for chemical processing, and so on. An assessment must be
made of the requirements for these for as far ahead as possible. Underestimating the needs of any of the
services can prove to be extremely costly and inconvenient.
(a) Local government building and planning regulations: Proposed buildings should not infringe local
regulations and by-laws e.g., the construction of building heights and also any special regulations
concerning the disposal of effluents.
(b) Availability of social amenities: A location which provides good external amenities such as shops,
theatres, cinemas, restaurants is often much more attractive to staff than one which is more remote. The
other important amenity is personnel transport, buses, and trains; hence some companies find this so vital
that they provide special company buses.
(c) Site characteristics: The geology of the area has to be considered and also whether the sub-soil can
support the loads likely to be placed on it, but also whether the climatic conditions (humidity, temperature,
and atmosphere) will adversely affect manufacture.
(d) Accessibility: The movement of transport to and from a production unit – goods, visitors, and staff
presents a problem not only of easy access but also easy control. There is also need for emergency
access e.g., fire fighting equipment or ambulances, which, if impeded could endanger life and seriously
affect the company.
(e) Environmental impact: Some production units may present potential dangers to the surrounding
neighbourhood, for example nuclear power stations and explosives factories are often considered
dangerous. Location of such plants in
remote areas may be desirable.
(f) Expansion potential: It is most unwise to build to the limit of any site unless the long-range forecast
indicates very definitely that the initial building will never be required to increase in size. Therefore,
adequate room for future expansion should be allowed.
(g) Site cost: As a first check, the site cost is important, although it is necessary not to let immediate
benefit jeopardize long term plans.
(h) Special grants: Governments and local authorities often offer special grants, low-interest loans, low
rentals and other inducements in the hope of attracting industry to particular locations. As these are often
areas with large reservoirs of labour, such offers should be considered.
9.5 Activities of the Planning Function
Generally the following are some of the responsibilities of the planning function of the production
department:
(a) Transforming the requirements of the sales organization into instructions to the producing
departments. On job and batch production works orders and on flow production are usually in the form of
program.
(b) Preparation of programs or schedules of production such as Gantt Charts, in order to provide the
producing departments with target levels of production.
(c) Keep the schedules updated by showing the actual progress against the planned output to highlight
deficiencies and deviations from the program.
(d) To liaise between sales and production departments to keep both sides supplied with up-to-date
information, and to re-schedule when planned output cannot be maintained or when increased output is
required.
(e) Maintenance of stock records. These should be kept by the planning and control department rather
than the storekeeper in order that the former has all the information associated with production, progress
and stocks of materials in one control place.
(f) Placing of orders on the purchasing department and keeping records of these orders and delivery
dates.

9.6 Activities of the Control Function

These entail the following:
(a) Ensures there is co-coordinated flow of work which leads to the right quantity and quality before
delivery date.
(b) The right work is done.
(c) Deciding where the work is done.
(d) Deciding who should do what work.
(e) Deciding how work is done.
(f) Fix time for performance.
(g) Ensuring continuous inspection over quality.
(h) Instituting cost control.

The foregoing are also the functions of the production department or manager, though in addition the
production manager does the following:
(a) Prepares production budget for the cost accountant.
(b) Trains foremen, supervisors and ensures proper training of all other production staff.
(c) Plans for new facilities and recommends the purchase or replacement of capital equipment.
(d) Ensures availability of materials and their proper storage.
(e) Ensures that finished goods are properly packed and stored.
(f) Liaises with other departments concerned.
(g) May be on the Board of Directors.

The following are important elements in production planning and control:

(a) Routing-This is the determination of where each operation is to be performed.
(b) Scheduling-It is the setting of where to carry out the operation, when to start and when to complete. It
makes use of Gantt Charts.
(c) Loading-Assigning work to each section in the course of production so that it is finished in the given
time.
(d) Dispatching-It is the authorizing of an operation on the shop floor.
(e) Progressing-It is ensuring that the work is carried out as planned i.e., the time table set by the
scheduling section is met.
(f) Follow up-Continuous follow up is done to ensure that proper interpretation of the jobs during
production is done. This is done through scheduled inspections.
(g) Corrective action-If any errors are detected during follow ups, corrective action is taken to avert
possible spoilage that could lead to losses. These errors in production could be due to wrong machine
settings, bad tools, etc. This could cause delays and people must be prepared to correct delays promptly.
Re-planning is done occasionally thus changing routes, schedules and loading so as to bring everything
back to the planned rate of output.
(h) Line balancing-Where a product is complex, there are certainly a large number of possible
sequences in which the operations can be carried out. The choice of sequence affects:
The minimizing of synchronizing loss;
The maximizing of resource utilization.

The objective of line balancing is to ensure that all plant is equally loaded and manpower remains busy.
9.7 Documents Used in Production Planning and Control

(a) Work Order (Route Card)

This is the document required to authorize the factory or workshop to commence production on a batch. It
contains information such as code number and description of the product, quantity, job number and
material required and a list of operations and processes through which the product is to be routed
together with the allowed times for each operation.
(b) Demand Note (Material Requisition)

This is the document used to draw materials from stores. It specifies the materials and quantities required
and the storekeeper enters the actual amount issued. A copy of this document is returned to the person
requisitioning the goods while a copy is passed to production planning and control for stock records to be
adjusted.
(c) Control Sheet

Each batch of work goes into production from the first process or stage of operation with a control sheet
so that at each stage a record of scrap and good ones passed over to the next stage of operation are
recorded. At the final process it is used as an internal delivery note on which the finished parts are paid to
the stores.
(d) Internal Delivery Note (IDN)

Sometimes a separate note is used to deliver finished products, components, or even excess material
into the stores. This is the work of the IDN. It is also known as return to stores note. Its function is
opposite to that of the demand note.
(e) Progress or Move Note

This note is raised after the completion of each operation on a batch of work so that when it is forwarded
to the production planning and control department, informs them that the batch has progressed. 13
PLANT LAYOUT
This is the method of allocating machines and equipment, various production processes and other
necessary services involved in the transformation process of a product with respect to the available space
in the factory so as to perform various operations in the most efficient and convenient manner, i.e.,
providing output of high quality at minimum cost. In simple terms plant layout is an effort to arrange
machines and equipment and other services within a pre-designed building-ensuring steady, smooth and
economical flow of materials.
The techniques employed in plant layout are more of a creative one though the normal work-study
techniques must be employed. A good layout results in comfort, convenience, safety, efficiency,
compactness and profits; while a poor layout results in congestion, waste, frustration and inefficiency.
13.1 Objectives of Plant Layout
(a) Proper and efficient utilization of available floor space.
(b) To ensure that work proceeds from one point to another inside the plant without any delay, i.e., to
avoid congestion and bottlenecks.
(c) Provision of better supervision and control of operations.
(d) Careful planning to avoid frequent changes in layout, which may result in undue increase on the cost
of production.
(e) To meet the quality and the capacity requirement in the most economical manner.
(f) To provide minimum and efficient material handling system.
(g) To suggest improvement in production process and work method.
(h) To provide adequate safety and comfort to the workers.
(i) To provide safeguards against fire, moisture, theft and general deterioration.
(j) Provide maximum visibility for men and materials at all times.

It is important to note that attaining these objectives is difficult in practice but good skill and judgment can
result in providing the best possible layout for a system.
13.2 Advantages of Plant Layout
(a) To workers
Lesser process time and material handling.
More labour productivity.
More safety and security to workers.
Better working conditions resulting in improved efficiency.
A feeling of unity among employees due to unnecessary segregation.

(b) Cost of Manufacturing

Maintenance and replacement costs are reduced.
Losses due to waste and spoilage are minimized.
Improved quality of product due to reduction in handling, and safer and better methods of production

(c) Products Control and Supervision

Provides more space of production operations.
Labour supervision and production control is simplified.
Costs and efforts in supervision of production process are minimized.

In general, a good layout leads to efficient and optimum use of machines, labour and capital by
minimizing per unit production time and maintaining a proper balance between various production
departments. Wanyama B. N. 63
13.3 Types of Layout
13.3.1 Line/Product Layout
Here machines are laid out to serve the needs of a product. It is assumed that materials are transformed
into products through a series of integrated operations (whose order cannot be changed) arranged in an
orderly sequence. The position and order in the sequence for a machine performing particular operation if
fixed.
Once a machine is in line, it cannot perform any operation, which is not designed in the sequence of
operation. It is commonly used for continuous type of manufacturing system producing items of the same
type on massive scale e.g., petroleum and cigarette industries.
Manufacturing of a large quantity of standardized products is the primary prerequisite to the line
production upon which the product layout is based.
13.3.1.1 Advantages
(a) Ensures smooth and regular flow of materials.
(b) Provides economy in material and labour by minimizing waste.
(c) Short processing time – since travel, storage and inspection occur less frequently, time and
opportunity for delay in operations are minimized.
(d) Reduces material handling – direct channels of materials flow exist, short distances between
operations leads to lesser back tracking.
(e) Low cost of labour procurement and lesser training requirement.
(f) Lesser inspection.
(g) Floor area in more productively utilized.

13.3.1.2 Disadvantages
(a) Inflexible in nature.
(b) It is vulnerable to production line shut down.
(c) Some supervision is more difficult.
(d) Require heavy capital investment.

13.3.2 Process or Functional Layout

Under this system, all operations of similar nature are grouped together in the same department or part of
the factory. Here, machines performing same type of operations are installed at one place, e.g., all drilling
machines are located at one place, known as drilling section. This type of layout is most appropriate for
intermittent (job or batch) type of manufacturing systems where small quantities of a large range of
products are to be manufactured e.g., machine parts, customer made goods, tools, etc.
13.3.2.1 Advantages
(a) Appropriate in case of situations where output is required in small quantities with changing/varying
specification.
(b) There is scope for more skilled labour as each section has experts.
(c) Each production unit of the system works independently and is not affected by the happenings of
another section of the plant.
(d) Machine breakdown does not disrupt production schedule.
(e) Low capital investment.
(f) The production facilities can be utilized to greater capacities with less duplication.
(g) Highly productive and profitable due to wider flexibility in production facilities. Each machine can
perform a wide range of similar operations.

13.3.2.2 Disadvantages
(a) More material handling- Lack of definite channels through which all work can flow, leads to too much
movement of semi-finished goods, from one place to another.
(b) Longer processing time- The speed of the various operations in the system is likely to be low as more
time is required for material handling, transport and inspection.
Wanyama B. N. 64
(c) Requires substantial production planning and control- The responsibility of production is divided
among many departmental supervisors making accountability for the work progress more difficult.
(d) Requires more floor space
(e) Inspection is more frequent and more costly-Strict departmental responsibility for the quality of the
work done is the main reason for thorough inspection in each department.
(f) Requires highly skilled labour.
(g) Requires buffer stock (Standby stock)

13.3.3 Stationary Layout

It is used in those situations where the semi-finished and finished goods are of such a big size and weight
that their movement from one place to another is not possible. Here, men, equipment and the raw
materials are moved to a place where all the manufacturing activities are carried out e.g., ship building,
manufacturing of locomotives, job welding shops, construction of dams, bridges, etc.
13.3.3.1 Advantages
(a) Simple and capable of frequent adjustments, both with respect to the process and product.
(b) Labourers and workers can be employed and remain busy throughout the process.

13.3.3.2 Disadvantages
(a) Since machines and equipment are transferred to some particular place, heavy and sophisticated
equipment cannot be used in such cases.
(b) Due to low efficiency of men and machines this layout is suitable only for some special type of projects
and for the production of small amount of items.

Choice of Plant Layout

When making a choice on the type of layout the following points should thus be considered:
(a) Nature of the products.
(b) Size of the output.
(c) Nature of the manufacturing system.
(d) The location of the output.
(e) Machines to be used.

WORK STUDY
Work study is concerned with the efficient design and execution of manual work, and with the
establishment of standards of performance. It is of relevance whenever manual work is undertaken, and
in particular where such work is fairly repetitive in nature, i.e. where it is both possible and appropriate to
seek to examine and establish appropriate work standards. Work study is important in manufacturing
industries, building and building services, health services, transport, military, supply systems, in offices,
etc.
In planning the layout of facilities and methods and procedures for the handling of materials, etc, it
becomes necessary to conduct some form of work study investigation. It may be used either in designing
work for high productivity in existing work by improving current work methods and reducing ineffective and
wasted time. In each case the design or improvements are sought within the context of existing resources
and equipment.
The reason some investigation may become necessary on existing jobs is perhaps because there has
been a slight change in the product, new equipment is being used, or wage rates or incentives are to be
altered. Examination of existing work methods could also result from low machine utilization, excessive
labour overtime or idle time, complaints from the workers, inadequate quality, high scrap or wastage rate,
etc.
Objectives of Work Study
(a) To establish the most economical method of doing the work.
(b) To standardize the method, the materials and equipment involved.
(c) Establish the time required by a qualified and adequately trained worker to do the job, while working at
a defined level of performance.
(d) Install this work method as standard practice.

There are two techniques used in work-study

(a) Method study
(b) Work measurement

Method Study
This is the examination of work performance and its subsequent re-arrangement to produce the same
results with less effort. The work performance of any organization depends on a number of interrelated
operations and activities. Any combination of the operations/ activities to achieve the desired goal is
called method. The function of a method analyst is to study the way in which work is being done with a
view to developing a procedure which when adapted would increase the level of performance.
Objectives of method study
(a) Improvement of process and procedure.
(b) Improvement of factory shop and work place layout and of design of plant and equipment.
(c) Economy in human effort and reduction in unnecessary fatigue.
(d) Improvement in the use of material, machines and manpower.
(e) Development of better physical working environment.

Procedure of Method Study

This involves:
(a) Selecting the task (job) to study
(b) Recording the facts
(c) Analyzing the facts
(d) Developing the new method
(e) Defining the new method
(f) Installing the new method
(g) Maintaining the new method
 Selection of the Task to be Studied
This is a managerial responsibility because it involves money and a budget has to be set-aside for it. It is
carried out if there are valid and identifiable reasons for doing the study.
Recording the Facts
Information is collected from the place where the job under study is being executed by direct visual
observation. This can be done by using process and movement charts for:
(a) Recording the movement of equipment and material (motion study).
(b) Recording the critical procedure involved in the job.
(c) Recording the work done by an operator on a broad basis.
(d) Recording the movement of operators with respect to machines and other operations.
(e) Recording the paths of movements to improve work place layout.
(f) Recording material wastage.

Developing the New Method

The device specially designed for improving work method is known as ―the process improvement
formulae‖. The four steps in the procedure are: Eliminate, combine, sequence, and simplify each
separate activity in the job. Complete elimination of unnecessary activities is clearly the most important
step in developing an improved method. If further elimination is not possible the possibilities of combining
one activity with others of the same process should be explored. Next strategy in development stage is to
identify the scope of changes in the sequence of activities. Last and the most expensive step in the
process of method development is simplification of activity to permit the worker to complete the job more
quickly and easily by reducing the number of operations, eliminating delays and minimization of
transportation distances. Wanyama B. N. 89
 Defining the New Method
Having determined the work method to be adopted, experimental work will be necessary in order to locate
and eliminate snags, and the process layout is then written.
Installation
The new method once approved is first ‗sold‘ out to the management, supervisors and then to the
operators. The success or failure of the new method depends on the operators and therefore the goodwill
and acceptance of the operators must be sought through assurance and building of trust. This can be
achieved by confidence building and training to ensure that they understand how the new methods work
and the benefits, which could accrue from their use.
Maintaining the New Method
‗Old habits die hard‘ so habits of work different from those desired may develop unless the new
technique is maintained. This may require continual visits by the engineer concerned but better still by the
operators‘ immediate supervisor. For the supervisor to be effective, the method must be clearly
understood by him. If variations in the method then arise he can either correct them, or, if they appear
desirable, submit them to the work study department for incorporation into the process layout.
The success of method study is based on the assumption that the output of men can be increased by
improved methods in working conditions and motivation.
Uses of Work Methods
Development of training plans.
Design of work places.
Design of equipment.
Satisfying health and safety requirements at the workplace.

Work Measurement
This is the application of techniques designed to establish the time for a qualified worker to carry out a
specified job at a defined level of performance. Put simply, it is a study which attempts to determine the
amount of time required to perform a task by an operator following a prescribed method (as determined
by method study). Time study is work measurement technique for recording the times and rates of
working for the elements of a specified job carried out under specific conditions and analyzing the data so
as to obtain the time necessary for carrying out the job at a defined level of performance.
Objectives of Work Measurement
The main purpose of work measurement is to eliminate ineffective time and set time standards. Time
standards reflect the amount of time it should take an average worker to do a given job working under
typical conditions. The standards include expected activity time plus allowances for probable delays.
Procedure for Work Measurement
(a) Select the work to study (from method study).
(b) Record all the relevant data.
(c) Examine the recorded data critically.
(d) Measure quantity of work involved in terms of time.
(e) Compile standard time for the operation, which includes allowance to cover for relaxation, personal
needs and contingencies.
(f) Define precisely the series of activities and methods of operation for which the time has been compiled
and issue the time as standard for the activities specified.