You have probably heard the acronym PCP and thought: "What is that, and why is it so important?"
Production planning and control (PCP) is a practice that enables business owners to closely monitor all of an industrial operation's processes.
In the market, ensuring this visibility is very important for improving decision making and outperforming competitors. However, many companies do not have this view because they have not implemented PCP or do not know how to benefit from it.
With that in mind, we wrote this article to demystify the subject and answer the main questions related to PCP. Also, to show how an ERP system can help the production planning and control department in practice.
We hope you enjoy it!
What is PCP?
As mentioned, PCP is simply a practice that ensures visibility into all industrial operations.
It is through production planning and control (PCP) that the manager maintains forecasting and control over all the resources used in the production process — and, based on that knowledge, makes the best decisions for production.
Anyone who works in industry knows that, for a product to reach the customer, a series of steps must be completed. Not only that: every department in the company must be committed to the processes.
The purchasing area, for example, is responsible for acquiring the inputs to manufacture the items. Inventory, on the other hand, ensures the correct distribution of materials.
If the company does not have PCP in place, how will it ensure these and other areas are working properly? And, moreover, that the product will reach the customer's hands with quality and on schedule?
What is PCP for, and what are the benefits?
PCP serves to align all operations in the industrial plant and ensure fast, error-free production. However, for these objectives to be met, the company must respect four pillars:
- Schedule processes;
- Organize machinery;
- Set priorities;
- Monitor the production chain.
By respecting these pillars, the company truly succeeds in applying PCP and can achieve the following benefits:
Predictability: it starts acquiring the right amount of material at the right time, and learns its real production capacity;
Agility: it becomes more efficient, whether in manufacturing the product or in sales;
Control: it starts controlling the quality of everything produced, as well as employee productivity and performance;
Traceability: it can follow every stage closely and track order status through to delivery to the customer;
Savings: it starts reducing waste and identifying bottlenecks that can drive up production costs.
It is worth mentioning that a company does not need to be very large to reap the benefits of PCP. By applying some production planning and control guidelines, even small industrial businesses can better organize their operations.
Step by step to implement PCP
Implementing PCP is not necessarily difficult; the company just needs to follow a few steps. They are:
1 - Forecast demand
The company can only succeed in production when the inputs are available to manufacture the items. So the first step is to forecast demand to ensure the warehouse will have all the necessary raw materials.
2 - Check production capacity
Receiving a list of orders is great for the company, but it will be of no use if the company cannot meet the demand. To keep machines and the team from being overloaded, production capacity also needs to be checked.
3 - Prepare the aggregate production plan
The aggregate production plan is a document that matters greatly for the company to define the best strategy based on production volume, inventory, labor, and more.
4 - Create the Master Production Schedule
After preparing the aggregate production plan, it is important for the company to also create the Master Production Schedule (MPS). This document can help define short-term production plans and strategically allocate resources to meet demand.
5 - Define the PDP
The PDP is a product development planning process that ensures continuous product improvement and production in line with demand. This step helps the company improve its materials management and release production orders based on its audience's preferences.
6 - Control the processes
The final step of PCP implementation is monitoring the entire production process to identify every bottleneck, estimate lead times, and optimize decision making.
How an ERP supports the PCP department
Since it involves a series of steps, applying PCP can be a real challenge. That is why, in the past, it was usually implemented only in large industrial companies.
Today, however, there are technologies such as ERP systems that integrate information and processes and help even small companies apply production planning and control guidelines.
Through the solution, you can access up-to-date reports on purchasing, inventory, and sales. You can also monitor performance indicators that show production and team performance.
The company can also use an ERP system to track the manufacturing status of its products, and even build plans and assign tasks based on material or team availability.
Want to know how technology can give you full control of your production? Get to know the Useall ERP and discover all the benefits in practice!
Originally published in Portuguese at useall.com.br.