PPS (Production Planning and Control)
PPS (Production Planning and Control) is the planning and operational management of manufacturing: it defines which product is made in what quantity, with which materials, machines and dates. The goal is to produce orders on time and economically while making optimal use of material, capacity and inventory.
PPS (Production Planning and Control) refers to the entirety of tasks with which a manufacturing company plans, initiates and monitors the flow of its production. PPS answers the core questions of manufacturing: which product is made in what quantity by what date, which materials and intermediate products are needed for it, and on which machines and workstations does production run in what sequence? The goal is to fulfil customer orders on time and cost-effectively while reconciling the three competing variables of on-time delivery, capacity utilisation and inventory.
The term breaks down into two levels. Production planning is the forward-looking, dispositive side: it determines requirements, plans quantities, dates and capacities, and defines what should be manufactured. Production control is the operational, executing side: it releases production orders, assigns them to specific machines and shifts, monitors progress and intervenes when disruptions occur. Both levels form a continuous control loop - planning, execution, feedback and correction constantly interlock.
At a glance
- Planning and operational control of the entire manufacturing process
- Answers: which product, which quantity, which material, which capacity, which date
- Two levels: dispositive planning and operational control in a control loop
- Balances the trade-off between on-time delivery, utilisation and inventory
- Tightly interlinked in the ERP with MRP, bills of material, routings and shop-floor data collection
Tasks and Components of PPS (Production Planning and Control)
Classic PPS breaks down into several functional blocks that build on one another. It begins with production programme planning: from customer orders, sales forecasts and inventory targets, the primary requirement is derived, that is, it is defined which finished products are to be manufactured in what quantities and time frames. This is followed by quantity planning, which calculates the secondary requirement for assemblies, individual parts and raw materials by exploding bills of material, and reconciles it with inventory and open purchase orders.
Next come scheduling and capacity planning as well as order initiation and monitoring. Based on the routings, the individual operations are scheduled and assigned to workstations, checking the available capacities against the planned load. Production orders are then released, supplied with material and fed into the shop floor. Ongoing monitoring captures feedback on quantities, times and disruptions via shop-floor data collection and feeds it back into planning.
Successive planning in the funnel model
Traditionally, PPS works according to the principle of successive planning: the functional blocks are run through one after another and with increasing detail, from rough programme planning to fine machine scheduling. This is easy to manage, but it means that material and capacity planning are considered separately and feedback loops only become visible late. Modern approaches therefore try to plan quantities and capacities more simultaneously in order to uncover bottlenecks earlier.
How PPS Works: The Control Loop of Manufacturing
PPS is not a one-off planning act but a closed control loop. Planning generates a target state - planned quantities, dates and allocations - control translates it into concrete production orders, and the feedback from production returns the actual state. If the actual deviates from the target, because for example a machine fails, material is missing or an order takes longer than calculated, planning is redone and control is adjusted. This target-actual comparison makes PPS responsive to the disruptions of everyday manufacturing.
Clean master data is central to the quality of this control loop. Bills of material describe which components a product consists of, routings describe in which operations and times it is created. Only this master data allows PPS to correctly calculate material and capacity requirements. In addition, shop-floor data collection supplies the actual data from the shop floor, without which no realistic progress becomes visible. Faulty bills of material or unrealistic standard times lead directly to incorrect plans.
Why PPS Matters: Benefits and Trade-Off
PPS directly determines the competitiveness of a manufacturer because it has to pursue three conflicting goals at the same time. High on-time delivery demands buffers and reserves, high capacity utilisation demands full machine loading, low inventory demands scarce material and little work in progress. These goals contradict each other: whoever utilises the machines at any cost builds up intermediate inventory; whoever radically reduces inventory risks stoppages and delays. This tension is known as the dilemma of scheduling, and good PPS finds a viable compromise for it.
In concrete terms, functioning PPS reduces lead times, increases delivery reliability towards customers, reduces the capital tied up in current assets and makes production plannable rather than reactive. It creates transparency about which order is where, which capacity is free and which orders are falling behind. This makes PPS the information and decision centre of manufacturing and a key lever for costs, service level and customer satisfaction at the same time.
PPS in the ERP System and Distinction from MRP, MRP II and MES
In practice, PPS is today usually part of an ERP system. The ERP holds the master data centrally - material master, bills of material, routings, workstations - and links production planning with purchasing, warehouse, sales and financial accounting. In this way, a customer order automatically triggers requirements calculation, generates purchase requisitions for missing material and production orders for in-house manufacturing. The major advantage over isolated point solutions is the continuous data basis: inventory, requirements and dates are consistent across all areas.
Historically, software-based PPS emerged from the Anglo-American concept of MRP. The abbreviations are easily misleading because they denote closely related but differently scoped concepts. For the ERP context, a clean distinction of the terms is therefore worthwhile.
PPS versus MRP and MRP II
MRP (Material Requirements Planning) is narrower than PPS: it calculates material requirements and order dates from the production programme and bills of material, but does not consider the capacities of the machines. MRP II (Manufacturing Resource Planning) extends this approach with capacity, scheduling and business management planning and thus largely covers in content what is referred to as PPS in the German-speaking world. PPS and MRP II are therefore essentially congruent, while MRP only maps the material part.
PPS versus MES
An MES (Manufacturing Execution System) is the shop-floor-oriented execution level between ERP and machine. PPS in the ERP plans medium and short term at order level; the MES takes over the fine, near-real-time control, machine connection, shop-floor data collection and quality assurance directly in the shop floor. In practice, both complement each other: the ERP sets the framework and the orders, the MES implements them close to the machine and reports actual data back.
Example
Example: Mid-Sized Manufacturer of Metal Enclosures
A mid-sized company manufactures control cabinet and device enclosures in small and medium series. When a customer order for 200 enclosures comes in, the PPS in the ERP explodes the bill of material and calculates the requirement for sheet metal, hinges and powder coating. If material is missing, a purchase requisition for purchasing is created automatically. In parallel, the system schedules the operations of punching, bending, welding and painting based on the routings and checks whether the machine capacity required for this is available in the desired week.
After release, the production orders move to the shop floor. Via shop-floor data collection, employees report piece and time progress per operation, so that the planner can see at any time which order is on schedule and which is falling behind. When a press brake fails, the planner shifts the affected orders to a replacement machine and informs sales early about the new delivery date. In this way, production remains plannable and able to deliver despite the disruption.
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