Production Planning and Control

Production Planning and Control Explained

By Team TranZact | Published on May 21, 2023

Production planning and control plays a critical role in ensuring that the right processes are in place to execute production effectively. But what is production planning and control precisely and why is it important?

In this blog, we will cover the objectives and benefits of production planning and control. You will also learn all about the various stages of production planning, and how it differs from production control. If you'd like to know more on the topic, do continue reading!

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What Is Production Planning and Control?

Production planning and control is the process of organizing and allocating all the required business resources to meet production demand promptly and without any disruptions. It outlines the procedure based on which the complete work order preparation in a manufacturing business will proceed The terms "production planning" and "control" relate to two approaches that coordinate key operations effectively throughout the manufacturing process. What to produce, when to produce it, how much to produce, and other factors are all included within this scope. To properly optimize the production flow, production planning must be seen from a long-term perspective.

What Is Production Planning?

Production planning is the process of determining the most effective and efficient way to manufacture goods or deliver services as per customer expectations. It involves analyzing various factors such as demand forecasts, available resources, production capacity, and delivery schedules to create a comprehensive plan that guides the entire production process. By implementing effective production planning strategies, organizations can achieve improved operational efficiency, reduce lead times, enhance customer satisfaction, and optimize resource allocation. It plays a crucial role in aligning production activities with business objectives, ensuring smooth operations, and facilitating effective decision-making throughout the production process.

What Is Production Control?

Production control refers to the process of monitoring and managing the execution of production plans to ensure uninterrupted operations on the shop floor. It involves overseeing the actual production activities, tracking progress, and making necessary adjustments to meet production goals and objectives. The primary objective of production control is to maintain the planned production schedule, optimize material and equipment utilization, and ensure that production targets are achieved within the specified timeframes. By effectively managing production control, organizations can achieve improved production flows, minimize wastage and disruptions, and improve on-time delivery performance.

Objectives of Production Planning and Control

The following are the main objectives of production planning and control:

  1. Optimum utilization of resources, such as machinery, raw material, and labor to fulfill production demands.

  2. To maintain optimum stock levels.

  3. To make sure capacity utilization matches anticipated demand.

  4. Ensure that the appropriate amount and quality of raw materials, tools, manpower, and equipment are available during production.

  5. To reduce setup and idle time on machines.

  6. Coordinate with other production-related departments, such as sales and order management services to achieve uninterrupted production flow.

  7. To facilitate cost control and cost reduction.

  8. To ensure a profitable and reliable production process.

  9. To reduce labor turnover and improve client satisfaction.

Importance of Production Planning and Control

A production planning and control system works hard to ensure that the business delivers orders as per quality standards and customer expectations. Here are a few reasons why it's important to have efficient production planning and control in place:

  1. Managers can use production planning and control to determine how much stock they'll need by planning each step of the production process.

  2. Production planning facilitates decision-making by understanding current trends and demands.

  3. It helps in employing the right resources at the right places without exceeding budgets.

  4. Production planning and control are also essential for resource management as they can determine the near-exact requirement of direct materials, semi-finished goods, and finished goods throughout diverse production cycles.

  5. It's also important for better coordination across various business functions.

Benefits of Production Planning and Control

Some of the advantages of production planning and control are:

1. Uninterrupted Production:

Expert production planning and control results in uninterrupted production thanks to the elimination of related holdbacks, such as shortage of materials, tools, and poor machine maintenance.

2. Cost Control and Higher Productivity:

It leads to cost control, higher productivity, and hence, maximization of profits due to optimum use of available resources. Businesses can also achieve a reduction in costs associated with storage and material handling.

3. Guaranteed Consumer Satisfaction:

Guaranteed consumer satisfaction and improved client relationships are other benefits of production planning and control, accomplished due to on-time deliveries.

4. Minimized Resource Wastage:

Effective production planning and control practices contribute to minimizing idle time across activities, resulting in efficient resource utilization and reduced wastage.

5. Increased Manufacturing Capacity:

Businesses can incorporate production planning and control to ensure that labor and machinery are also used optimally. Streamlined production processes lead to improved overall efficiency and effectiveness.

6. Better Material Procurement:

Businesses can enable better material management to indicate when materials should be bought for production. This promotes financial savings and strengthens connections with suppliers.

7. Enhanced Decision-Making:

Efficient production planning and control provide access to accurate data and insights for informed decision-making in production planning and control.

8. Continuous Process Improvement:

Regular monitoring and evaluation of production processes with planning and control, allow for continuous improvement and optimization across the business.

Production Planning and Control in Manufacturing Industry

Many manufacturers use outdated spreadsheets to be informed of production errors and schedule delays. But spreadsheets don't auto-update, they are a static resource. And this can cause failure to notify changes leading to loss-making delays. Therefore, the manufacturing industry requires modern production planning and control tools with automated Bill of Material (BOM) for multilevel process planning. TranZact provides SMEs with all the resources required for efficient production planning and control.

With it, you can manage resource planning, plan production processes, manage goods testing, and keep track of changes all in one tool. TranZact offers Multilevel BOM, Material Requirement Planning, and inventory management, to assist SMEs with seamless production planning solutions.

Steps in Production Planning and Control

There are 6 different phases of production planning and control. These phases or techniques of production planning and control are discussed in detail below:

Step 1: Demand Forecasting

Forecasting in production planning and control is the first and most important step. Analyze historical data, market trends, and customer demand patterns to forecast future demand for products. This serves as a basis for production planning.

Step 2: Master Planning

The creation of a production plan is assisted by key information from numerous sources, including data from sales. This consists of data such as order quantity, promised delivery date, and data from the engineering department, such as any relevant technical specifications.

The planning stage ensures a simplified production process and answers the following questions:

  • What shall be produced?
  • When shall it be produced?
  • How shall it be produced?

Step 3: Material Requirements Planning (MRP)

MRP helps you calculate the materials needed for production based on master planning. Consider factors such as lead times, inventory levels, and production constraints to generate material requirements planning and procurement recommendations.

Step 4: Capacity Planning

Assess the production capacity and availability of resources such as labor, machines, and equipment. Ensure that production schedules can be met with the available resources and identify any capacity constraints or bottlenecks.

Step 5: Routing

Routing in production planning and control involves the precise path the raw materials take to be converted into finished products. The entire process is thoroughly planned and designed, and the most systematic and reliable order is chosen and approved.

Therefore, routing maximizes the utilization of the resources at hand, including personnel, machinery, and materials. Full machine capacity, a quick and cost-effective route, and the availability of alternative routes are the things to be considered during the routing process.

Step 6: Scheduling

Scheduling in production planning and control is the process of determining how long it will take for the completion of a route. The 'when' of the operation is highlighted by scheduling and it seeks to optimize the time allotted for the operation's completion. In short, specifying the sequence and duration of the production activities using master schedules, daily schedules, and operational schedules are important factors in scheduling.

Step 7: Loading

Scheduling and routing plans are put into action at this time. The amount of work assigned to all personnel or machines is examined during loading. The load at each routing point as well as the beginning and end of an operation are examined for resource support and assistance.

Data about the amount of time needed to complete a task, the overall workload capacity, and the availability of people and equipment are needed for loading. At this point, the production plan is nearly finished and ready for implementation.

Step 8: Dispatching

Dispatching is the process of starting production activities by issuing orders and instructions in line with the previously scheduled time and sequence, as outlined in route sheets and schedule charts. Dispatching in production planning and control specifically refers to:

  • Purchasing the necessary tools and other equipment before the workers actually need them.
  • Giving workers the necessary work orders, guidelines, and blueprints to start the project.

Step 9: Follow Up

If a process isn't followed up for updates after completion, it's impossible to determine how effective it is. This function analyzes the manufacturing process, maintains note of any inefficiencies, and looks for ways to further enhance the workflow.

The cycle then continues once this process is finished, bringing production closer to its optimum efficiency. So, at this point, check for any obvious or potential bottlenecks that might affect the smooth flow of production at any stage. In short, expediting and following up ensures that the task is completed according to schedule and that delivery deadlines are met.

Step 10: Quality Control

Implement quality control measures to maintain product quality and compliance with standards. Conduct inspections, tests, and audits throughout the production process to identify and resolve quality issues.

Step 11: Performance Monitoring and Improvement

Measure key performance indicators (KPIs) such as production output, cycle times, and resource utilization. Analyze data to identify areas for improvement and implement process enhancements or corrective actions.

Step 12: Feedback and Continuous Improvement

Gather feedback from production activities, customer feedback, and other relevant sources. Use this information to refine and optimize the production planning and control processes continuously.

Processes of Production Planning and Control

The following are the key processes within production planning and control:

Job production The different tasks carried out in this process form the basis of production. It involves producing goods to fulfill unique requests from customers with very particular needs. Typically, the order quantity is small, thus it might leave machines idle occasionally. Mass production The mass production process of production planning and control is designed for high demand and large order quantities. Enterprises that manufacture goods in huge quantities frequently use this production method.

Also, it decreases the holding cost of inventory and lead times due to continuous production. Given the high production rate, this process does not account for specialization.

Batch production

In this process, a number of identical products are manufactured in batches, either to fulfill a specific order or to meet ongoing demand. The two main elements, setup cost and carrying costs, are used to determine batch size. Long-term use of this strategy aids in the efficient use and allocation of the available resources.

Adopt a Production Planning and Control Software to See the Difference

To be successful, manufacturers must provide high-quality products at affordable costs. Also, they require adequate operational flexibility to meet rapidly shifting market demands. For this, it's important for manufacturing businesses to automate production planning and scheduling and resolve problems related to production without delays.

SMEs can either go the traditional way or use a software solution to incorporate key elements of production planning and control. Effective production planning using automated software like TranZact makes it easier to follow pre-identified strategies. It helps to lay out production plans and control measures clearly for your entire team and is accessible around the clock. TranZact enables you to prepare all the blueprints and documentation for production planning and control. It enables quick decision-making with a production module that's closely linked with its sales module. This helps managers to easily decide which orders are to be taken forward for production, thereby increasing production control efficiency!

FAQs of Production Planning and Control

1. What are the types of production management?

Production planning is applied in many different businesses and regions of the world in diverse ways. Based on the functions of production planning and control, below mentioned are a few types that are known all over the world.

  • Job-based Planning
  • Batch Planning
  • Flow Planning
  • Process Planning

2. What is the difference between production planning and production control?

Activities such as scheduling, dispatch, inspection, quality control, inventory management, supply management, and equipment management all rely on production planning.

Production control, on the other hand, guarantees that the production team will be able to meet the necessary production target, make the best use of available resources, manage quality, and save costs.

It is crucial to integrate a production planning and control system into the manufacturing unit of a business for smooth and effective operations.

3. What are the limitations of production planning and control?

The limitations of production planning and control include its dependence on accurate forecasts, which can be challenging to achieve, and the inability to account for unexpected disruptions or changes in demand patterns, which may require flexibility in the production process. Additionally, production planning and control may not fully address complexities arising from resource constraints, supply chain uncertainties, and dynamic market conditions.

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