In management theory production planning and production control are lumped together as one responsibility, which is referred to as “PPC.” A manufacturer who chooses to implement a PPC department needs to clearly define the boundaries of that department’s functions.
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The PPC department needs information in order to carry out production planning and control. This requires the assembly and maintenance of a library of product plans, components and material requirements for each product.
Bill of Materials
The planner breaks down each product into sub-assemblies and then each sub-assembly in turn should be divided into its sub-assemblies. This process builds up a tree structure called the Bill of Materials. The bottom level of the BOM lists individual components as raw materials and the quantities required in order to assemble a finished product.
The PPC library should note what processes transform raw materials in each assembly. These processes require resources including machinery and labour. The required labour and machinery for each process will inform schedulers of the available capacity for the production of an order.
The length of time required for each process should also be recorded for each product. It is also necessary to note the dependencies of processes. The knowledge of which processes can be performed in parallel and which process require pre-processing enables planners to create a critical path diagram which expresses the minimum time that a product can be produced. The length of time a product takes on the shop floor is called the lead time.
The PPC department has to coordinate with the Purchasing and Sales departments to decide what batch sizes are feasible for each product. This can translate into a “Minimum Order Quantity” that the sales force needs to communicate to customers. It may be influenced by the MOQ imposed by suppliers.
Using the source data library, which is sometimes called the “aggregate plan,” the PPC needs to give estimated delivery times to the Sales department. These estimates are based on current load of production facilities, how many batches are already scheduled for production and the lead times for the required quantities of goods.
The PPC’s production planning responsibilities lead up to production and include the scheduling of work. Each schedule will contain a start and end date or time for production and also for each process. The schedule will also specify which machines should be used in each process and what raw materials will be needed, when and where in the factory.
Once production begins, the Planning Control section of the PPC department takes over. Here, tasks focus on ensuring that production sticks to schedule and finds ways to speed up processes or add extra capacity if glitches cause production to fall behind plan.
The experiences recorded during production enable the PPC to compile suggestions on how capacity could be improved, or which processes could be consolidated or bypassed to improve lead times and reduce costs.
The PPC department needs to produce reports on throughput and goals on the factory floor. Measurements of targets and whether they were met are of prime importance.
As each production run progresses its performance adds to the historical data maintained by the PPC department. Source data should be constantly updated to adjust estimates of capacity and material requirements. This data is also useful to the Sales, Purchasing, HR and Accounting departments.
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