Role differentiation critical to quality of planning process
Planning is all about looking ahead. Although this may seem obvious, this is one area where many organizations still tend to fall short. Pressure to keep the business running often causes employees to lose sight of tomorrow’s problems. This creates a vicious circle: a growing number of operational problems leads to increased inefficiency in planning, since people in this situation are less focused on the longer term. In fact, however, a solid long-term production plan helps to simplify the short-term production scheduling process.
LE versus SME market
In large enterprises (LEs), there is usually a clear organizational separation between short-term planning (scheduling) and medium-term and long-term planning (production and capacity planning).
Since the activities are divided into different functions, different departments or even different geographic locations, there is a natural distinction between production planning and scheduling.
Small and medium-sized enterprises (SMEs) tend to lack this separation of functions, and the entire planning process might be managed by a single department or even a single person.
Production planner versus production scheduler
However, the level of planning depends less on the size of the organization than on the extent to which different planning roles are differentiated. Short-term schedulers take a directive role when it comes to operations: they determine from day to day what is to be produced and serve as the primary contact for the shop floor. Generally, they do not look beyond a horizon of two to three weeks.
Production and capacity planners are more concerned with the tactical and strategic planning process: they balance demand and supply, taking into account capacity constraints and other challenges at the production facility based on a horizon of three months to two years.
Information and Communication
How effectively you control your planning process depends on how information is managed and communicated. Individual organizations may obviously interpret this in different ways, depending on the factors at play within their specific company or industry. What are the limits of production capacity and personnel? How do you determine customer demand? What service level do you need to guarantee to your customers? What should your stock levels be? Production planners have the most central role – they monitor the feasibility of the medium-term to long-term plan and are faced with the constant challenge of maintaining a balance between reducing stock levels and improving customer service. Production schedulers have a more operational role – they’re responsible for ensuring that production and logistics are properly integrated into day-to-day operations.
To check whether each role is interpreted correctly, you should regularly ask yourself the question: am I discussing the correct issues based on the correct information sources at the correct frequency with the correct people?
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Authors: Gerben Donken, Ruud Nieuweboer