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Optimizing Production Planning and Control

Table of contents

A white production machine in close-up.

Until a product is ready, it usually goes through a number of more or less complex processes. Production planning and control are intended to ensure a smooth process.

Definition

Production planning and control (PPC) is a part of production management and, in the best case scenario, ensures that production processes run smoothly. This includes, among others, the conception, the execution and the monitoring. In order to save costs and resources, the goal is often to continuously optimize these areas. The optimization measures are based on objective key figures such as the Delivery Reliability.

In order to have an overview of all processes, production planning and control make use of specific software solutions that can map the aforementioned processes and figures in detail. The various areas of the PPS must be consistently monitored so that problems can be detected in time and prevented.

The individual steps of production planning and control

Production planning and control consists of various areas of responsibility. The overarching goal is always the economic optimization of workflows and processes. Classically, the individual steps are as follows:

Primary Requirements Planning

The primary requirement deals with the quantity of products to be produced in the planning period. This also includes intermediate products that are necessary for the production of the final product and still have to be produced. To determine the primary demand, one relies on the sales planning, which is based on the existing customer orders or on demand forecasts.

Dependent requirements planning (lot-size planning)

In the case of dependent requirements planning, further factors come into play, as the required quantities of input goods are determined, i.e. required materials and intermediate products. Procurement orders and bills of material are generated from this.

Scheduling and capacity planning

This involves planning the production steps and the available capacities. First of all, a plan is drawn up for the theoretical throughput times, i.e. for the time required for a product to be manufactured, including set-up and processing times, but also transition times (e.g. transport or idle times). Then the lead times are compared with the existing capacities (machines and personnel) with the aim of obtaining a realistically feasible plan. 

Order release

Up to this point, the planning is valid for a longer period. However, it does not take into account bottlenecks in material supply or other possible disruptions. When transferring planning to shorter periods (for example, one to two weeks), it must first be checked whether all materials and resources are available. All orders that fall within this shorter planning horizon and that have passed the availability check are then released for production. At this point, the transition from the planning process to actual implementation takes place.

 

Sequencing

Sequencing includes sequence planning, machine assignment planning and detailed scheduling. The exact dates for individual processing steps are specified. The aim is to achieve the highest possible capacity utilization, short throughput times and high adherence to schedules.

 

Order monitoring

During order monitoring, production steps and deadlines are monitored for quality and progress. It is checked whether the planning was accurate. Appropriate countermeasures are taken in the event of errors or disruptions. Areas such as logistics, quality management and personnel management can rely on the data recorded here to make further calculations for future planning. Order monitoring is also an important source of information for subsequent maintenance measures.

Production planning and control & the push and pull principle

The push and pull principle is an approach that is applied across all areas, but it is mostly used in logistics or supply chain management. In production management, the goal is to produce goods of the desired quality at the desired time. To achieve these goals, there are two strategies: push or pull.

The push strategy:

In the push strategy, production is based on defined quantities and times: It is therefore not based on actual demand, but on the defined production plan. A fundamental component of the push strategy is that the flow of information moves parallel to the production chain. The products are "pushed" through production by a central planning and control unit, so to speak.  
In order to always be able to meet customer requirements, this method often leads to high inventories, because in order not to calculate too tightly and then not be able to serve spontaneous orders, overproduction takes place. In addition, production cannot be flexibly switched to other or new products, which in these cases often results in major planning efforts and long delivery times.
A high delivery capability speaks in favor of the push strategy, since in case of doubt, too much rather than too little is produced, even if this results in large inventories. In addition, large batches can be produced, which enables producers to reduce their costs. This is not possible when following the pull principle.

 

The pull strategy:

In the pull strategy, production takes place according to demand. In contrast to the push strategy, production is controlled decentrally here, i.e. without a central planning and control unit.
The flow of information that determines production runs counter to the production process. In extreme cases, production is triggered at final assembly and works backwards from there through the individual production steps.

In the long term, this enables short and lean processes to be realized, avoiding waste and maintaining a high level of adherence to deadlines. This also reduces the inventory in warehouses.

Optimize production planning and control with lean management

Those who convert production to the pull strategy usually pursue an overriding goal, namely lean management. This attempts to make the value chain, structures and relevant production processes leaner through dynamism and efficiency, in order to optimize them sustainably at the same time. "Lean" means "slim" in German: part of lean management are special methods that are intended to slim down the company. Examples are:

  • The pull principle
  • Total Productive Management
  • Total Productive Maintenance
  • Kanban
  • Low Cost Automation
  • Value stream design

 

Lean management thrives on a continuous improvement process, which can also be initiated by employees. A constant exchange about change options in the sense of continuous optimization is therefore desirable and necessary.

Goals of production planning and control

Optimized production planning and production control has various goals, which are to be implemented using the methods and principles mentioned:

  • Minimize production costs over the long term
  • Keep lead times short
  • Effectively reduce scrap
  • High and continuous capacity utilization
  • Inventory reduction - internally as well as externally
  • Ergonomic and safe workplaces in our own production facilities
  • High delivery reliability, measured by the key figure OTIF 


Usually, different objectives are pursued at the same time, as only then an optimal result is guaranteed. However, this is a major challenge because diverse objectives contrast with each other.

One example of this is the attempt to optimize setup times and batch size at the same time. If you want to change over your equipment as rarely as possible, you have to produce significantly larger quantities of one and the same product in succession. This in turn can lead to higher inventory levels. It is therefore important to use software solutions to find the optimum point that resolves the conflict of objectives as efficiently as possible.

Making production planning and control future-proof digitally

In order to successfully implement optimization approaches such as lean management, certain technical fundamentals are required. Manual production planning and control methods are no longer sufficient today. In order to create a better overview of processes, suitable software solutions are irreplaceable. For many companies, it is essential to have a good solution for traceability or documentation (for example, as a basis for certification). Only with the help of software can strategy, planning and control be mapped holistically.

To ensure this optimally for companies, individually tailored solutions are required. Software, such as a Warehouse Management System (WMS) for the warehouse or Manufacturing Execution System (MES) for production, provide transparent mapping of production and warehouse processes.

Particularly valuable here are holistic and coordinated information flows that enable data processing across the board and in real time. To this end, various software systems such as enterprise resource planning (ERP) can be linked with complementary applications. In this way, complex structures can be controlled and managed in a targeted manner, ensuring efficient optimization of planning and control processes.

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