Production Planning and Control (PPC) in Operations Management

Pro­duc­tion plan­ning and con­trol (PPC) is the func­tion that decides in advance what, how much, how, when and where to pro­duce, and then watches the work so that it actu­ally hap­pens as planned. In one line: PPC means plan­ning pro­duc­tion work before it starts and con­trol­ling it until it is fin­ished, so that the required goods are made in the right quan­tity and qual­ity, at the right time, at min­i­mum cost.

PPC mat­ters because a pro­duc­tion sys­tem has many mov­ing parts: mate­ri­als, machines, work­ers, tools and dead­lines. With­out a plan, machines stand idle while other depart­ments are over­loaded, mate­ri­als arrive late and deliv­ery dates are missed. PPC is often called the "brain" or nerve cen­tre of the fac­tory because it coor­di­nates all of these into a sin­gle, orderly flow.

Mean­ing of pro­duc­tion plan­ning and pro­duc­tion con­trol

PPC has two linked halves.

Pro­duc­tion plan­ning

Plan­ning is done before pro­duc­tion starts. It decides what to pro­duce, how much, by which process, when and where, and it works out the machines, man­power, mate­ri­als and time sched­ule needed. Plan­ning is future-ori­ented.

Pro­duc­tion con­trol

Con­trol is exer­cised dur­ing and after exe­cu­tion. It checks whether the plan is being fol­lowed, whether work is delayed, whether actual out­put matches the tar­get, and whether cor­rec­tion is needed. Con­trol is action-ori­ented.

An every­day com­par­i­son is a school exam­i­na­tion. Fix­ing the dates, the order of sub­jects, the rooms and the invig­i­la­tors is plan­ning. On the day, check­ing that papers start on time, rooms are ready and ques­tion papers have arrived is con­trol.

Objec­tives of PPC

The main objec­tive is to pro­duce the required goods, of the required qual­ity, in the required quan­tity, at the required time, at min­i­mum cost. PPC there­fore bal­ances time, quan­tity, qual­ity, resources and cost. More spe­cific objec­tives are:

• Smooth flow of pro­duc­tion with­out unnec­es­sary stop­pages.
• Bet­ter use of resources: machines, labour and mate­ri­als.
• Timely com­ple­tion of jobs on or before their due dates.
• Reduced wastage of mate­ri­als, time and effort.
• Lower pro­duc­tion cost through less idle time and fewer delays.
• Bet­ter coor­di­na­tion among pur­chas­ing, stores, pro­duc­tion, inspec­tion and dis­patch.
• Improved cus­tomer ser­vice through reli­able deliv­ery.
• Lower work-in-progress, so less money is tied up on the shop floor.

Why PPC is needed

With­out PPC, mate­ri­als may not be avail­able when needed, machines stay idle, work­ers wait for instruc­tions, one depart­ment is over­loaded while another has noth­ing to do, deliv­ery dates are missed and costs rise. With PPC, work is organ­ised, resources are bal­anced, delays shrink and man­age­ment has a clear view of progress.

Func­tions of PPC

Text­books list the func­tions slightly dif­fer­ently, but the core sequence is plan­ning → rout­ing → sched­ul­ing → dis­patch­ing → fol­low-up, with load­ing, sequenc­ing and inspec­tion fit­ted in along the way.

Plan­ning and esti­mat­ing

Using the sales fore­cast and cus­tomer orders, plan­ners decide the quan­tity and tim­ing of out­put and esti­mate the mate­ri­als, machine hours and labour hours required. This is where the bill of mate­ri­als and stan­dard times are used.

Rout­ing

Rout­ing decides the path work will fol­low from raw mate­r­ial to fin­ished prod­uct: which oper­a­tions, in what order, on which machines or in which depart­ments. For a metal chair the route might be cut­ting → bend­ing → weld­ing → paint­ing → fin­ish­ing → pack­ing. The route is writ­ten on a route sheet (also called an oper­a­tion sheet), which lists each oper­a­tion, machine, tool­ing and stan­dard time.

Good rout­ing cre­ates a smooth flow, avoids back-track­ing, reduces han­dling and wait­ing, improves machine use and helps con­trol cost.

Load­ing

Load­ing assigns work to machines or work cen­tres accord­ing to their avail­able capac­ity, so that no machine is over­loaded while another is idle. It is often shown on a machine load­ing chart.

Sched­ul­ing

Sched­ul­ing fixes the time: when each job and oper­a­tion should start and fin­ish. It is the timetable of pro­duc­tion. If rout­ing is the path, sched­ul­ing is the clock. For exam­ple: cut­ting 9:00–10:00, weld­ing 10:30–12:00, paint­ing 1:00–2:00 and pack­ing 3:00–4:00.

Two com­mon approaches are for­ward sched­ul­ing, which starts from today and works for­ward to find the ear­li­est fin­ish date, and back­ward sched­ul­ing, which starts from the due date and works back to find the lat­est start date.

Sequenc­ing

Sequenc­ing decides the order in which wait­ing jobs are processed when sev­eral jobs com­pete for the same machine. It mat­ters when jobs are many, machines are few and due dates dif­fer. A worked exam­ple fol­lows.

Dis­patch­ing

Dis­patch­ing is the action step that releases the work. It issues job cards and work orders, autho­rises the move­ment of mate­ri­als, issues tools and draw­ings, and tells work­ers and machines to start. Dis­patch­ing puts the plan into oper­a­tion.

Fol­low-up (expe­dit­ing)

Fol­low-up mon­i­tors progress and com­pares actual with planned out­put. Pro­duc­tion rarely goes exactly to plan: machines break down, work­ers are absent, mate­ri­als arrive late, parts are rejected and rush orders arrive. Fol­low-up detects such prob­lems early so that cor­rec­tive action, such as re-rout­ing, over­time or re-sched­ul­ing, can be taken.

Inspec­tion and cor­rec­tive action

Inspec­tion con­firms that out­put meets qual­ity stan­dards, and its results feed back into plan­ning. When actual per­for­mance departs from the plan, con­trol closes the loop by revis­ing the plan.

A short mem­ory aid: rout­ing = path, sequenc­ing = order, sched­ul­ing = time, dis­patch­ing = start, fol­low-up = check.

Worked exam­ple: sequenc­ing four jobs on one machine

Sup­pose a work­shop has four jobs wait­ing for a sin­gle machine. Pro­cess­ing times and due dates (in days from today) are:

Three com­mon pri­or­ity rules are com­pared: FCFS (first come, first served, in arrival order A, B, C, D), SPT (short­est pro­cess­ing time first) and EDD (ear­li­est due date first). For each job, com­ple­tion (flow) time is the cumu­la­tive pro­cess­ing time, and tar­di­ness is com­ple­tion time minus due date, or zero if the job is early.

Rule 1: FCFS (A–B–C–D)

Rule 2: SPT (B–D–A–C)

Rule 3: EDD (B–A–D–C)

Com­par­ing the rules

The mea­sures are cal­cu­lated as:

$$\displaystyle \text{Average completion time} = \frac{\text{Total flow time}}{\text{Number of jobs}} \qquad \text{Average jobs in system} = \frac{\text{Total flow time}}{\text{Makespan}}$$

The makespan (time to fin­ish all four jobs) is 19 days under every rule.

Con­clu­sion: SPT min­imises aver­age com­ple­tion time and work-in-progress; EDD min­imises aver­age tar­di­ness and here leaves only one job late. FCFS is sim­ple and seems fair but per­forms worst on both mea­sures. The plan­ner chooses the rule that matches the fir­m's pri­or­ity: speed of flow, or meet­ing promised dates.

Worked exam­ple: check­ing capac­ity for an order

Sup­pose a fur­ni­ture fac­tory receives an order for 500 school desks. Each desk needs 1.2 stan­dard labour hours. The assem­bly shop has 10 work­ers work­ing 8 hours a day, 6 days a week.

Step 1: required hours. $500 \times 1.2 = 600$ hours.

Step 2: avail­able hours per week. $10 \times 8 \times 6 = 480$ hours.

Step 3: time needed. $600 \div 480 = 1.25$ weeks, which is $1.25 \times 6 = 7.5$ work­ing days.

If the cus­tomer wants the desks within 6 work­ing days, the shop is short by $600 - 10 \times 8 \times 6 = 120$ hours. PPC must then plan over­time, add work­ers, sub­con­tract part of the work or nego­ti­ate a later date. Check­ing capac­ity like this before accept­ing an order is a basic plan­ning step.

PPC in dif­fer­ent pro­duc­tion sys­tems

PPC is uni­ver­sal, but how it is applied depends on the type of pro­duc­tion.

Doc­u­ments and tools used in PPC

• Route sheet: oper­a­tions, machines and times for a prod­uct.
• Job card / work order: autho­rises a worker to per­form an oper­a­tion and records time taken.
• Machine load­ing chart: shows the work assigned to each machine.
• Sched­ules and Gantt charts: show planned ver­sus actual progress against time.
• Pro­duc­tion and dis­patch orders: release work to the shop floor.
• Mate­r­ial req­ui­si­tions and tool tick­ets: draw mate­ri­als and tools from stores.
• Progress reports: tell man­age­ment whether jobs are on time.

Today most of these are gen­er­ated by MRP and ERP soft­ware, but the logic is the same.

Links with fore­cast­ing, pur­chas­ing and inven­tory

PPC does not work alone. Fore­cast­ing sup­plies expected demand, sales and future work­load, from which PPC decides how much to pro­duce, when, and what capac­ity and mate­ri­als are needed. Pur­chas­ing, stores and inven­tory man­age­ment make sure raw mate­ri­als, com­po­nents and tools are avail­able and stock lev­els are known. Mate­r­ial require­ments plan­ning (MRP), devel­oped by Orlicky, turns the pro­duc­tion sched­ule into exact mate­r­ial needs and order dates, and is now a core part of PPC in man­u­fac­tur­ing.

PPC and sched­ul­ing are not the same

Sched­ul­ing is one part of PPC. PPC is the wider sys­tem that includes plan­ning, rout­ing, load­ing, sequenc­ing, sched­ul­ing, dis­patch­ing, fol­low-up and con­trol.

Prob­lems faced in PPC

• inac­cu­rate demand fore­casts;
• machine break­downs and power fail­ures;
• mate­r­ial short­ages and poor sup­plier per­for­mance;
• labour absen­teeism;
• urgent cus­tomer orders that dis­turb the sched­ule;
• design changes and qual­ity defects.

For this rea­son PPC must be flex­i­ble and con­tin­u­ously mon­i­tored.

Ben­e­fits of good PPC

• smoother pro­duc­tion flow and bet­ter machine use;
• less idle time and less work-in-progress;
• lower wastage and lower cost;
• more con­sis­tent qual­ity;
• on-time com­ple­tion and bet­ter cus­tomer ser­vice;
• bet­ter coor­di­na­tion and higher pro­duc­tiv­ity.

A com­plete illus­tra­tion

For the 500-desk order, PPC would decide how much wood and hard­ware are needed, which machines will be used, the order of cut­ting, drilling, assem­bly, pol­ish­ing and pack­ing, when each task starts, when work­ers begin, how progress will be checked, and what to do if delays occur. Plan­ning pre­pares the job; con­trol car­ries it through to com­ple­tion. A bus trip is sim­i­lar: the route, depar­ture time and dri­ver are fixed before­hand, and progress, delays and break­downs are man­aged dur­ing the jour­ney.

Exam-ready sum­mary

Pro­duc­tion plan­ning and con­trol is the process of plan­ning pro­duc­tion activ­i­ties in advance and con­trol­ling them dur­ing exe­cu­tion to ensure smooth and effi­cient pro­duc­tion. It aims to pro­duce the right quan­tity, at the right time, of the right qual­ity and at min­i­mum cost. Its main func­tions are rout­ing (path), load­ing, sequenc­ing (order), sched­ul­ing (time), dis­patch­ing (release of work) and fol­low-up (check­ing progress and cor­rect­ing devi­a­tions). PPC improves coor­di­na­tion, reduces wastage and idle time, ensures timely deliv­ery and raises pro­duc­tiv­ity.

Key terms

Rout­ing

Fix­ing the sequence of oper­a­tions and the machines or depart­ments a job passes through.

Route sheet

A doc­u­ment list­ing each oper­a­tion, machine, tool­ing and stan­dard time for a prod­uct.

Load­ing

Assign­ing jobs to machines or work cen­tres within their avail­able capac­ity.

Sched­ul­ing

Fix­ing start and fin­ish times for jobs and oper­a­tions.

Sequenc­ing

Decid­ing the order in which wait­ing jobs are processed at a work cen­tre.

Dis­patch­ing

Releas­ing orders, mate­ri­als and instruc­tions so that work can begin.

Fol­low-up (expe­dit­ing)

Mon­i­tor­ing progress against the plan and chas­ing delayed work.

Flow time

The time a job spends in the sys­tem from release to com­ple­tion.

Tar­di­ness

The amount by which a job fin­ishes after its due date; zero if it is on time.

Makespan

The total time needed to com­plete a whole set of jobs.

Com­mon ques­tions

What are the main func­tions of PPC?

Plan­ning and esti­mat­ing, rout­ing, load­ing, sched­ul­ing, sequenc­ing, dis­patch­ing, fol­low-up and inspec­tion, with cor­rec­tive action clos­ing the loop.

What is the dif­fer­ence between rout­ing and sched­ul­ing?

Rout­ing decides the path a job fol­lows through oper­a­tions and machines; sched­ul­ing decides when each oper­a­tion will start and fin­ish.

Which sequenc­ing rule should be used?

SPT is best for min­imis­ing aver­age com­ple­tion time and work-in-progress; EDD is best for min­imis­ing late­ness. In the worked exam­ple, SPT gave 9.25 days aver­age com­ple­tion and EDD left only one job late.

Why is PPC harder in job pro­duc­tion than in mass pro­duc­tion?

In job pro­duc­tion every order has its own route, times and due date, so plans must be made afresh each time; in mass pro­duc­tion the route is fixed and repeated.

What is dis­patch­ing in PPC?

It is the release of work to the shop floor by issu­ing job cards, mate­r­ial req­ui­si­tions, tools and instruc­tions, so that the sched­uled oper­a­tions actu­ally start.

How is PPC related to fore­cast­ing?

Fore­casts give expected demand; PPC turns that demand into deci­sions on out­put quan­tity, tim­ing, capac­ity and mate­ri­als.

Ref­er­ences

1. Chary, S. N. Pro­duc­tion and Oper­a­tions Man­age­ment. McGraw-Hill Edu­ca­tion (India).
2. Pan­neer­sel­vam, R. Pro­duc­tion and Oper­a­tions Man­age­ment. PHI Learn­ing.
3. Steven­son, W. J. Oper­a­tions Man­age­ment. McGraw-Hill Edu­ca­tion.
4. Kra­jew­ski, L. J., Mal­ho­tra, M. K. and Ritz­man, L. P. Oper­a­tions Man­age­ment: Processes and Sup­ply Chains. Pear­son.
5. Orlicky, J. (1975) Mate­r­ial Require­ments Plan­ning. McGraw-Hill.

Related read­ing

• Pro­duc­tion Sched­ul­ing in Oper­a­tions Man­age­ment
• Sup­ply Chain Man­age­ment in Oper­a­tions Man­age­ment
• What is Pur­chase Man­age­ment?