The Production Planning and Control consist of 2 obvious processes of Planning and Execution :
Planning : Production planning is generally done from budgeted sales plan. Planning is based on the Sales plan to meet the sales requirements as per the production cycle times. Demand for the Product is entered through demand management in the form of Planned Independent Requirement (PIR). This data from demand management becomes the input to Material Requirement Planning (MRP). MRP checks for the availability of various raw materials used for production at different stages using the master data such as Bill of Material (BOM) and available current plant stocks.
* In case of material shortage, Purchase requisitions are created for materials which are externally procured, and planned orders are created for in-house produced materials.
* These purchase requisitions and planned orders initiate the Procurement Cycle and the Execution Cycle of Production respectively.
* As MRP works with infinite capacities, capacity leveling must be done in order to avoid any capacity bottlenecks.
Execution : These Planned orders are converted to Production orders, and are scheduled as per the production timings using master data such as routings.
* Production Orders are released by the Production Supervisor on the shop floor, and material availability checks can also be carried out to check if there are any missing components.
* Production is carried out based on the activities maintained in the Routing where the master data like Work Center is mentioned against each operation in the Routing.
* Once the production is completed, the Confirmations of orders are executed, and goods movement for material consumptions & goods receipt are posted against the Order. Hence, the Order gets the Delivered (DLV) status, and the material is received into desired storage location.
* Usually at the month end before doing order settlement, production order needs to be set to technically completed status in order to calculate production variances by the controlling personnel.
