Search Notes


Project - Study of Production Planning and Control System

Project Title: Production Planning and Control in Eicher Tractors, Mandideep

Abstract: The project has been developed to identify the need and importance of PPC i.e. Production Planning and Control in manufacturing industry. Production planning is done with the objective of coordination of materials with suppliers, efficient utilisation of people and machines, efficient flow of materials, and communication with customers.

Various activities are supported by Production Planning and Control like- Materials Planning, Purchasing, Raw Material, Inventory Control, Capacity Planning, Scheduling Machine and People, WIP Inventory Control, Coordinate Customer Orders, Finished Goods Inventory Control.

Production planning and control facilitates in various ways like- optimum utilisation of capacity, inventory control, ensures quality, and economy in production time.

Production Planning is accompanied with Control Mechanism to ensure desired results. Results are compared with plans, if any deviation is found revision of plan is done. Hence, Production Control is an adjusting process, providing corrective measures for planned development.


1.    Introduction
1.1 Introduction to Eicher Tractors
1.2 Objective of project
1.3 Production Function
1.4 Introduction to PPC
1.5 Steps in PPC
1.6 Sources and methods

2.    Main Text
2.1 Company Profile
2.2 Interpretation of data
2.3 PPC at Eicher Tractors, Mandideep
2.4 Process of PPC
2.5 Findings
2.6 Conclusion

3.    References


1.1 Introduction to Eicher Tractors, Mandideep
 Eicher began its business operations in 1959 with the roll out of India's first tractor. Today the Eicher Group is a significant player in the Indian automobile industry with a gross sales turnover of over Rs. 13,700 million in the year 2002-03
Eicher tractor has been awarded ISO-14001
Today, Eicher Tractors is unbeatable leader in product range of engines in the 22 HP to 32 HP and Gensets in the 15 KVA to 30 KVA categories.
Eicher Tractors, Mandideep is wholly owned subsidiary of Tafe Motors Tractors Ltd.

The Eicher Group started in 1948 when the Goodearth Company was set up to sell and service imported tractors in India. Perceiving an urgent need to mechanize Indian agriculture, the Company set up a tractor manufacturing facility i.e. Eicher Tractors Ltd. in 1959 in collaboration with Gebr. Eicher, Germany in India.

1.2 Objectives of the Study
Objective of the study is to prove that the production planning and control practices has impact on the efficient utilisation of the resources, waste reduction, reduce waiting time and processing, thus contributing to the profitability of the industry. On these premise the study accentuated to address questions in order to achieve the following objectives:

  • To know how the production planning contributes to the efficient use of facilities and equipments.
  • To know the effects of Production Planning and Control on Production function.
  • To know whether production planning and control practices lead to waste reduction and increased profit.
  • To prove that short term production planning and scheduling techniques employed by industries, is necessary in minimizing process and customer waiting time.

1.3 Production Function
After taking decisions about the type of business, its location, layout etc. the entrepreneur steps into the shoe of production manager and attempts to apply managerial principles to the production function in an enterprise. Production is a process whereby raw material is converted into semi finished products and thereby adds to the value of utility of products, which can be measured as the difference between the value of inputs and value of outputs.

Production function encompasses the activities of procurement, allocation and utilisation of resources. The main objective of production function is to produce the goods and services demanded by the customers in the most efficient and economical way. Therefore efficient management of the production function is of utmost importance in order to achieve this objective. Production management involves the managerial decisions regarding design of the product and design of the production system i.e. determination of production processes and production planning and control.
1.4 Production Planning and Control
Once the entrepreneur has taken the decisions regarding the product design and production processes and system, his next task is to take steps for production planning and control, as this function is essentially required for efficient and economical production.

Planned Production is the ability to look ahead, organize and coordinate and having plenty of driving force and capacity to lead and ability to supervise and coordinate work and simulates his associates by means of a programme of human relation and organization of employees.

Production Planning and Control involve generally the organization and planning of manufacturing process. Especially it consists of the planning of routing, scheduling, dispatching inspection, and coordination, control of materials, methods machines, tools and operating times. The ultimate objective is the organization of the supply and movement of materials and labour, machines utilisation and related activities, in order to bring about the desired manufacturing results in terms of quality, quantity, time and place.

Production planning without production control is like a bank without a bank manager, planning initiates action while control is an adjusting process, providing corrective measures for planned development. Production control regulates and stimulates the orderly how of materials in the manufacturing process from the beginning to the end.

1.5 Steps in PPC
Production Planning and Control (PPC) is a process that comprises the performance of some critical; functions on either side, viz., planning as well as control.

Production planning
Production planning may be defined as the technique of foreseeing every step in a long series of separate operations, each step to be taken at the right time and in the right place and each operation to be performed in maximum efficiency. It helps entrepreneur to work out the quantity of material manpower, machine and money requires for producing predetermined level of output in given period of time.

Under this, the operations, their path and sequence are established. To perform these operations the proper class of machines and personnel required are also worked out. The main aim of routing is to determine the best and cheapest sequence of operations and to ensure that this sequence is strictly followed. In small enterprises, this job is usually done by entrepreneur himself in a rather
adhoc manner. Routing procedure involves following different activities.

  • An analysis of the article to determine what to make and what to buy.
  • To determine the quality and type of material
  • Determining the manufacturing operations and their sequence.
  • A determination of lot sizes
  • Determination of scrap factors
  • An analysis of cost of the article
  • Organisation of production control forms.

It means working out of time that should be required to perform each operation and also the time necessary to perform the entire series as routed, making allowances for all factors concerned. It mainly concerns with time element and priorities of a job. The pattern of scheduling differs from one job to another which is explained as below:

Production schedule: The main aim is to schedule that amount of work which can easily be handled by plant and equipment without interference. Its not independent decision as it takes into account following factors.

  • Physical plant facilities of the type required to process the material being scheduled.
  • Personnel who possess the desired skills and experience to operate the equipment and perform the type of work involved.
  • Necessary materials and purchased parts.

Master Schedule: Scheduling usually starts with preparation of master schedule which is weekly or monthly break-down of the production requirement for each product for a definite time period, by having this as a running record of total production requirements the entrepreneur is in better position to shift the production from one product to another as per the changed production requirements. This forms a base for all subsequent scheduling acclivities. A master schedule is followed by operator schedule which fixes total time required to do a piece of work with a given machine or which shows the time required to do each detailed operation of a given job with a given machine or process.
Manufacturing schedule: It is prepared on the basis of type of manufacturing process involved. It is very useful where single or few products are manufactured repeatedly at regular intervals. Thus it would show the required quality of each product and sequence in which the same to be operated

Scheduling of Job order manufacturing: Scheduling acquires greater importance in job order manufacturing. This will enable the speedy execution of job at each center point.
As far as small scale industry is concerned scheduling is of utmost importance as it brings out efficiency in the operations and s reduces cost price. The small entrepreneur should maintain four types of schedules to have a close scrutiny of all stages namely an enquiry schedule, a production schedule, a shop schedule and an arrears schedule out of above four, a shop schedule is the most important most suited to the needs of small scale industry as it enables a foreman to see at a glance.

  • The total load on any section
  • The operational sequence
  • The stage, which any job has reached.

The next step is the execution of the schedule plan as per the route chalked out it includes the assignment of the work to the operators at their machines or work places. So loading determines who will do the work as routing determines where and scheduling determines when it shall be done. Gantt Charts are most commonly used in small industries in order to determine the existing load and also to foresee how fast a job can be done. The usefulness of their technique lies in the fact that they compare what has been done and what ought to have been done.
Most of a small scale enterprise fails due to non-adherence to delivery schedules therefore they can be successful if they have ability to meet delivery order in time which no doubt depends upon production of quality goods in right time. It makes all the more important for entrepreneur to judge ahead of time what should be done, where and when thus to leave nothing to chance once the work has begun.

Production control
Production control is the process of planning production in advance of operations, establishing the extract route of each individual item part\ or assembly, setting, starting and finishing for each important item, assembly or the finishing production and releasing the necessary orders as well as initiating the necessary follow-up to have the smooth function of the enterprise. The production control is of complicated nature in small industries. The production planning and control department can function at its best in small scale unit only when the work manager, the purchase manager, the personnel manager and the financial controller assist in planning production activities. The production controller directly reports to the works manager but in small scale unit, all the three functions namely material control, planning and control are often performed by the entrepreneur himself production control starts with dispatching and ends up with corrective actions.

Dispatching involves issue of production orders for starting the operations. Necessary authority and conformation is given for:

  • Movement of materials to different workstations.
  • Movement of tools and fixtures necessary for each operation.
  • Beginning of work on each operation.
  • Recording of time and cost involved in each operation.
  • Movement of work from one operation to another in accordance with the route sheet.
  • Inspecting or supervision of work

Follow up
Every production programme involves determination of the progress of work, removing bottlenecks in the flow of work and ensuring that the productive operations are taking place in accordance with the plans. It spots delays or deviations from the production plans. It helps to reveal detects in routing and scheduling, misunderstanding of orders and instruction, under loading or overloading of work etc. All problems or deviations are investigated and remedial measurer are undertaken to ensure the completion of work by the planned date.
Inspection: This is mainly to ensure the quality of goods. It can be required as effective agency of production control.
Corrective measures: Corrective action may involve any of those activities of adjusting the route, rescheduling of work changing the workloads, repairs and maintenance of machinery or equipment, control over inventories of the cause of deviation is the poor performance of the employees. Certain personnel decisions like training, transfer, demotion etc. may have to be taken. Alternate methods may be suggested to handle peak loads.

This is mainly to ensure the quality of goods. It can be required as effective agency of production control.

Corrective measures
Corrective action may involve any of those activities of adjusting the route, rescheduling of work changing the workloads, repairs and maintenance of machinery or equipment, control over inventories of the cause of deviation is the poor performance of the employees. Certain personnel decisions like training, transfer, demotion etc. may have to be taken. Alternate methods may be suggested to handle peak loads.

1.6 Methodology
The study is carried out at Eicher Tractors, Mandideep.  Productions officers are likewise selected who serve as the respondents of the study. The study extensively explores both the primary and secondary sources of information.

Pertinent information is gathered from the respondents using a structured questionnaire. The structured questionnaire is consists of descriptive questions to get the description of various aspects of Production Planning and Control. The initial questions are to cover the variables characterizing the various production planning and control practices such as demand forecasting, inventory, capacity utilization, and scheduling techniques while the last segment will purely on Control practices.

Unstructured personal interview is also conducted in order to augment the responses that may not be explicitly cleared in the questionnaire. Like this the data is properly collected, organized, and presented. 


2.1 Company Profile

Eicher Tractors, Mandideep

The Eicher Group started in 1948 when the Goodearth Company was set up to sell and service imported tractors in India. Perceiving an urgent need to mechanize Indian agriculture, the Company set up a tractor manufacturing facility i.e. Eicher Tractors Limited in 1959 in collaboration with Gebr. Eicher, Germany in India. The first Indian tractor rolled out of Eicher's factory at Faridabad in India, in 1960. Today, there are over 4,00,000 Eicher tractors that contribute to the nation's agricultural development. Eicher's manufacturing and marketing facilities located at Faridabad have been awarded ISO 9001 certification.
Eicher Tractors has a technology transfer tie-up with Valtra, Inc of Finland. It has an extensive network of over 400 tractor dealers and around 56 engine dealers across India with 15 regional offices and 12 depots.

Committed to providing high quality products, Eicher invests significantly in technology resources and infrastructure. Our manufacturing facilities are spread across three states:

  • Wide range of tractors, from 61 HP to 24 HP offering the best value for money.
  • Product range includes air-cooled and water-cooled engines.
  • Highly fuel efficient machines, with low maintenance costs.
  • Conforming to international emission norms.
Product range also includes engines in the 22 HP to 32 HP and gensets in the 15 KVA to 30 KVA categories

2.3 Production Planning and Control at Eicher Tractors, Mandideep

Production plan is crucial to the success of any producing unit; it is an activity which is continues in nature and required to be revised time to time as per the requirements. It can’t be done in isolation by a particular department; rather it is an integrated activity done by Planning and Control Department in collaboration with Material Department, Production Department, and Quality Control Department. The heads of various departments of Eicher Tractors sits together and Plans there monthly, weekly, and daily production.

2.4 Process of Production Planning

1.    Marketing Department – Monthly details of Market demand
Production planning starts from the market details provided by Marketing Department. Marketing Department provides there monthly requirements like- number of tractors, specific models, specific color, capacity etc.

2.    PPC/Store – Preliminary Production Plan
PPC/Store receives message of monthly requirements from marketing department. PPC studies the requirements and prepare a Preliminary Production Plan. This plan is sent to the Materials Department.

3.    Material Department – Material requirements planning
A copy of preliminary plan is sent to the material department. Material department studies the plan and prepares a report which shows the availability of material, material in transit, plan of receipt of material in chronological form, expected shortage of material, and any other problem related to the material. Materials Requirements Planning (MRP) can be used in more complex systems. MRP determines time-phased requirements (period-by-period) for all purchased and manufactured parts such as raw materials, components, parts, subassemblies, etc. . This report is sent to the PPC Department

4.    PPC–Revision of preliminary Production plan.

On the basis of the report sent by material department, the PPC/Store revises the preliminary plan. This revised plan is sent to the marketing department. Marketing department revises the schedule of requirements according to the availability and sequence/schedule of receipt of material.

5.    Production Planning and Master Production Scheduling
After the consent of marketing department and material department the monthly Production Plan and weekly master production scheduling is done. A copy of main plan and master production schedule is sent to each department.

6.    Daily Production Plan
Every day in morning the production head, quality head, and material head sits together, discuss there problems, and unanimously prepares a daily production plan.  This daily production plan is displayed on planning board of every department and at every level of assembly line. This daily production plan shows sequence of operations, sequence and schedule of material movement, post pending material, pre pending material, and shortage of material. This daily plan is automatically get updated with the completion of operations at every level.

    7.    Control
In results are not according to the Daily Plans, the plan is required to be revised. Daily Production Plan is revised number of times considering the material shortages, problems with assembly line, etc. if material is post pending i.e. on assembly line its operation can’t be changed, but, changes can be made in the sequence and scheduling of pre pending material i.e. material in queue. Efforts are made to plan a sequence which minimizes the idle time of assembly line, labour, and other equipments.

2.5 Findings
The PPC department of Eicher Tractors, Mandideep believes in making plans and decisions unanimously, in cooperation with production department, marketing department, material department, and quality control department. So that a feasible plan can be made, executed properly, and optimum results can be achieved. Hence, production planning and control is an integrated activity and can’t be done in isolation by any particular department.

Following are the findings of this project about production planning and control activities of Eicher Tractors:

  1. Production Planning is an integrated activity and cannot be done in isolation by a particular department.
  2. PC helps in scheduling tasks and production runs and ensures production capacity does not remain idle and there is no undue queuing of tasks via proper allocation of tasks to the production facilities.
  3. Proper PPC helps to resort to just- in- time systems and thereby reduce the overall inventory. It enables to ensure that the right supplies are available at the right time.
  4. PPC helps to reduce the cycle time and increase the turnover via proper scheduling.
  5. PPC provide for adherence to the quality standards so that quality of output is ensured.
  6. To sum up we may say that PPC is of immense value to the entrepreneur in capacity utilization and inventory control. More importantly it improves his response time and quality. As such effective PPC contributes to time, quality and cost parameters of entrepreneurial success.
2.6 Conclusion
After doing this project I am in position to conclude that Eicher Tractors, Mandideep has well defined and structured production planning system. PPC defines the sequences and schedules of operations; hence production planning contributes to the efficient use of facilities and equipments.

PPC is done to identify production process which leads to reduced lead time; hence customer waiting time is also reduced.

PPC ensures optimum utilization of production capacity, material, and other equipments; hence it leads to waste reduction and increased profits.

2.7 Recommendations
The production planning and control of Eicher Tractors, Mandideep, highly depends on the material availability. In case of shortage of material the overall plan get disturbed. If such problem prevails the optimum results cannot be achieved. To avoid such problem following measures can be taken:

  1. Proper Materials Planning done,
  2. Materials must be purchased from multiple vendors,
  3. Sufficient safety stock must be maintained,
  4. Lead time and responsibility must be fixed at the part of vendors.


  1. Harris, g, attour, s, 2003 The National advertising practices of multinational companies; a content analysis study. European journal of marketing volume 37, no ½; 154-168
  2. MacKenzie, I.2004 English for business studies - A curse for business studies and economics students. Cambridge, United Kingdom;
  3. Nardi, P.2003. Doing Survey Research – A Guide to Quantitative Method.

View more Documents from eNotesMBA

No comments:
Write comments

Hey, we are going to add more MBA subjects soon. You'll like it -
Get MBA Notes In Your Mail Box