5 Common PPCP Mistakes: Find Out How to Avoid Them and Increase Your Efficiency
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Production Planning, Scheduling and Control (PPCP) is a cornerstone in the effective management of any manufacturing company's operations. It is an intricate process that encompasses a number of vital activities, from forecasting demand to monitoring production in real time. However, even with the increasing sophistication of the tools and technologies available, common mistakes in PPCP still persist and can significantly damage operational efficiency, customer satisfaction and financial results. In this article, we will explore some of the most frequently made mistakes in PPCP and examine practical strategies for avoiding them.
PPCP only sees the stock present in each sector that it is going to schedule Each sector only sees what it has "in its stock" to schedule
When each sector's schedule focuses only on what is available in its immediate stock, unless there is a huge stock in the sector (which in itself there is), there will certainly be a lack of synchronization between the sectors and less use of factory resources. This is because it is not possible to see all the future availability that the sector will have of materials, which could generate insights for schedules that add similar items or reduce waiting times, as they better synchronize the sectors from a more holistic and integrated view. This means that production can be interrupted or delayed because one sector can't see another sector's need and therefore doesn't place the necessary orders or schedules. Thus, by scheduling only on the basis of the stock available at the time, the lead times for the production of items can be significantly longer than necessary, generating even more work in process (WIP). Ultimately, this problem can result in delays in delivering products to customers.
Calculate Days On Hand based on average historical demand instead of looking at how many days it covers in future demand
Calculating Days On Hand, which refers to the number of days that current stock can cover demand, if calculated based on average historical demand, rather than considering future demand, can lead to some significant negative implications. By relying solely on the average of historical demand, you can run the risk of maintaining stock levels that don't meet the company's real needs. This is because demand can fluctuate over time due to seasonality, market trends, changes in customer buying patterns and other factors that are not reflected in the historical average. In this case, we see companies calculating the days they have coverage based on an average, but without considering the existing portfolio or a trend or seasonality projection. If we have every indication that demand will behave in a certain way, or even more so, we already have a firm order backlog, there's no reason not to take this information into account when calculating your stock coverage in order to have a correct view of the scenario. Consider a clothing store that sells winter and summer clothes. The purchasing manager decides to calculate Days On Hand for winter coats based on the average historical demand over the last few years. This average indicates that demand for winter coats is generally lower during the summer. However, that year, an unexpected cold snap hits the region during the summer, and demand for winter coats skyrockets. As a result, the store doesn't have enough stock to meet the unexpected demand. Not taking future demand into account can lead to scenarios in which stock is insufficient to meet sudden peaks in demand, resulting in a lack of products on the market and lost sales.
Open intermediate product order with finished date
In many manufacturing processes, a final product is assembled from several intermediate products which, in turn, can be made up of other by-products. APS or MRP needs to coordinate the production of these different levels, ensuring that the intermediate products are ready by the date required for the assembly of the final product. In other words, it is necessary to establish partial deliveries for some semi-finished products, and we still see companies without this distinction, which means that all semi-finished and finished products have their production demanded for the same period. The main objective is to ensure that the final product is completed on the date required by the customer. This requires the synchronization of all production stages, from the manufacture of components to final assembly, to avoid delays in delivery.
Look at capacity in kg, meters or units and not hours
When capacity is measured only in physical units, such as Kg or meters, the mix of products that a factory needs to produce is not taken into account. Some products can be more complex, time-consuming and require more resources than others. Ignoring this variability can lead to problems in allocating resources and meeting delivery deadlines. In addition, production management must seek to optimize the efficiency of the process, and this often involves the effective use of time. Ignoring the time dimension can lead to situations in which a machine or workforce remains idle for long periods due to an inappropriate allocation of tasks. A more comprehensive approach that takes into account both physical capacity and the time dimension is often necessary for effective production management, balancing efficiency, costs and delivery times. This is often achieved through enterprise resource planning (ERP) systems and appropriate production scheduling strategies.
Charge for production by volume produced, operator chooses what is easiest to do rather than what is most important
Charging for production based solely on the volume produced, without considering other criteria of quality or importance, can lead to a set of problems known as the "dilution effect" or "dilution of metrics". This happens when operators are encouraged to choose easier tasks over more important ones, because this allows them to reach production targets with less effort. In this way, operators can neglect the quality of their work because their main objective is to increase production. This can result in low-quality products or services that don't meet established standards. The five mistakes discussed reveal common pitfalls that organizations can face, from a lack of synchronization between sectors to inadequate capacity measurement and an exclusive emphasis on the volume produced. Avoiding these mistakes and adopting more comprehensive and targeted strategies is essential to maintaining efficient production that meets market demands and achieves operational excellence. Did you like the content? Then you'll also be interested in our e-book on 6 Key Elements in Production Planning.