Unit 2: Layout and production planning
Production & Operations Management notes · PTU syllabus (MBA 205-18)
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Unit summary
Once a facility exists, managers must arrange it, plan production, set work standards and match capacity to demand. This unit covers facility layout objectives and types, production planning and control, work study — method study and work measurement — and capacity planning.
After this unit you can
- Explain the objectives and types of facility layout
- Explain the concept and functions of production planning and control
- Apply method study and work measurement
- Explain capacity planning concepts and decisions
PTU syllabus topics
- Facility layout objectives and types
- production planning and control concepts and functions
- work study — method study and work measurement
- capacity planning concepts and decisions
Method study
Find the best way to do a job: SREDIM
Work measurement
Set standard time
Time study
Stopwatch observations
Work sampling
Random observations
Topic 1
Facility layout: objectives and types
Layout is the arrangement of machines, departments, workstations and storage within a facility. Objectives: smooth material flow, minimum handling, efficient use of space, safety, flexibility and worker comfort.
Process (functional)
Similar machines grouped together
Job and batch production, hospitals
Product (line)
Machines in the sequence of operations
Mass production, assembly lines
Fixed-position
Product stays; workers and machines move
Ships, aircraft, buildings
Cellular (group technology)
Cells of machines for families of parts
Medium-volume, varied parts
- Line balancing: in product layouts, assign tasks to workstations so that each takes about the same time (cycle time = available time ÷ required output).
Topic 2
Production planning and control
PPC plans what to produce, when and how, and controls production to meet the plan.
- 1Routing
Path and sequence of operations
- 2Scheduling
When each job starts and finishes
- 3Loading
Assign work to machines
- 4Dispatching
Release orders to start work
- 5Follow-up (expediting)
Check progress and remove delays
- Planning levels: aggregate planning (medium term), master production schedule, material requirements planning (MRP), shop-floor control.
Topic 3
Work study
Work study is the systematic examination of methods of doing work to improve the use of resources and set performance standards. It has two parts: method study and work measurement.
Method study
Find the best way to do a job
Work measurement
Find the standard time for the job
Topic 4
Method study
- 1
Select the job
- 2
Record present method
Process charts, flow diagrams, string diagrams
- 3
Examine critically
Questioning — what, where, when, who, how
- 4
Develop a better method
- 5
Install the new method
- 6
Maintain it
- Recording symbols (ASME): operation (circle), inspection (square), transport (arrow), delay (D), storage (triangle).
- Principles of motion economy: use both hands, minimise movements, fixed locations for tools, gravity feed, comfortable workplace.
Topic 5
Work measurement
Work measurement determines the time a qualified worker needs to do a job at a defined level of performance.
Normal time
Observed time × rating factor
Standard time
Normal time × (1 + allowances)
Example
Observed time 4 minutes, rating 110%, allowances 15%. Normal time = 4 × 1.10 = 4.4 minutes; standard time = 4.4 × 1.15 = 5.06 minutes.
- Techniques: stopwatch time study, work sampling, predetermined motion time systems (PMTS, MTM), synthetic data.
- Uses: manpower planning, costing, incentive schemes, scheduling.
Topic 6
Capacity planning: concepts and decisions
Capacity is the maximum output a facility can produce in a period. Design capacity is the ideal maximum; effective capacity allows for maintenance and other allowances; actual output is what is achieved.
Utilisation
Actual output / design capacity × 100
Efficiency
Actual output / effective capacity × 100
Factors: forecast demand, product design, technology, labour skills, maintenance and supply chain. Strategies: lead (add capacity ahead of demand), lag (after demand rises) and match (in small steps).
- Capacity decisions: how much, when and where to add capacity; make-or-buy; use of overtime, subcontracting and shifts in the short run.
Key terms
- Line balancing
- Equalising work across workstations in a product layout
- Routing
- Determining the path and sequence of operations
- Method study
- Recording and improving the way work is done
- Standard time
- Normal time plus allowances
- Effective capacity
- Maximum output after allowances
Quick revision
- Layouts: process, product, fixed-position, cellular; line balancing.
- PPC: routing, scheduling, loading, dispatching, follow-up.
- Method study steps; process chart symbols; motion economy.
- Work measurement: normal and standard time; techniques.
- Capacity: design, effective, actual; lead, lag, match.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.State the objectives of a good layout.
- Q2.What is line balancing?
- Q3.List the functions of PPC.
- Q4.Distinguish method study and work measurement.
- Q5.How is standard time calculated?
- Q6.Distinguish design and effective capacity.
Long-answer questions
- Q1.Explain the types of facility layout with suitable examples.
- Q2.Discuss the concept and functions of production planning and control.
- Q3.Explain the procedure of method study and the techniques of work measurement.
- Q4.Explain capacity planning and the strategies for capacity decisions.
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