5 Common PPCP Mistakes: Learn How to Avoid Them and Boost Your Efficiency

Production Planning, Scheduling and Control (PPCP) is a cornerstone in the effective management of any manufacturing company's operations. It's an intricate process that encompasses a series of vital activities, from demand forecasting to real-time production tracking. However, even with the growing sophistication of available tools and technologies, common PPCP mistakes still persist and can significantly hurt operational efficiency, customer satisfaction and financial results. In this article we'll explore some of the most frequently made PPCP mistakes and examine practical strategies to avoid them.
‍

PPCP only sees the inventory present in each sector it's about to schedule — each sector only sees what's "in its own inventory" to schedule
‍

When each sector's scheduling focuses only on what's available in its immediate inventory — unless there's a huge sector-level stock (which has its own problems) — there will certainly be lack of synchronization between sectors and reduced utilization of factory resources. That's because it's not possible to see all the future material availabilities the sector will have, which could generate insights for schedules that group similar items or reduce wait times by better synchronizing sectors from a more holistic and integrated view. This means production can be interrupted or delayed because one sector can't see another sector's need and therefore doesn't make the necessary requests or schedules. So, by scheduling only based on the inventory available at the moment, lead times (throughput times) for item production can be significantly longer than necessary, generating even more work in progress (WIP). In the end, this problem can result in delays delivering products to customers.  
‍

Calculating 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 the current inventory can cover demand — based on average historical demand, instead of considering future demand, can lead to significant negative implications. Relying solely on the average historical demand can risk maintaining inventory levels that don't meet the company's real needs. That's because demands can fluctuate over time due to seasonality, market trends, customer purchasing pattern changes and other factors not reflected in the historical average. We see companies calculating how many days of coverage they have based on an average, but without considering the existing order book or a trend/seasonality projection. If we have all the signals that demand will behave a certain way — or, even more, we already have a firm order book — there's no reason not to consider that information when calculating inventory coverage, in order to have a correct view of the scenario. Consider a clothing store that sells winter and summer apparel. The purchasing manager decides to calculate Days On Hand for winter coats based on average historical demand from prior years. That average indicates demand for winter coats is generally lower in 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 inventory to meet the unexpected demand. Not taking future demand into account can lead to scenarios where inventory is insufficient to meet sudden demand spikes, resulting in product shortages on the market and lost sales.
‍

Opening an intermediate-product order with the finished good's date
‍

In many manufacturing processes, a final product is assembled from several intermediate products which, in turn, may be made of other sub-products. APS or MRP must coordinate the production of these different levels, ensuring intermediate products are ready on the date needed for final product assembly. That is, partial deliveries must be set up for some semi-finished items — and we still see companies without this distinction, which causes all semi-finished and finished items to have their production demanded for the same period. The main goal is to ensure the final product is completed on the date required by the customer. This requires synchronizing all production steps, from component manufacturing to final assembly, to avoid delivery delays.

Looking at capacity in kg, meters or units instead of hours
‍

When you measure capacity only in physical units like kg or meters, you don't consider the product mix a factory needs to produce. Some products can be more complex, slow and require more resources than others. Ignoring this variability can lead to problems in resource allocation and meeting delivery dates. Furthermore, production management must seek to optimize process efficiency, and that often involves effective use of time. Ignoring the time dimension can lead to situations where a machine or labor remains idle for long periods due to improper task allocation. 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 dates. This is often achieved through Enterprise Resource Planning (ERP) systems and proper production scheduling strategies.
‍

Charging production by volume produced — operators choose the easiest to do instead of the most important
‍

Charging production exclusively by produced volume, without considering other quality or importance criteria, can lead to a set of problems known as the “dilution effect” or “metric dilution.” It happens when operators are incentivized to choose easier tasks at the expense of more important ones, because that lets them hit production targets with less effort. So operators may neglect work quality, since their main goal 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 organizations can face — from lack of synchronization between sectors to inadequate capacity measurement and exclusive emphasis on volume produced. Avoiding these mistakes and adopting more comprehensive, oriented strategies is essential to keep production efficient, to meet market demands and achieve operational excellence. Liked the content? Then you'll also be interested in our e-book on 6 key elements in Production Planning.
‍