Production Planning Redesign: Special Topics

Abstract

For manufacturing companies, competitive advantage is ultimately measured interms of financial results, and the key financial result is usually a margin of profitfrom sales, which then translates into a margin of return on investment.How then does production planning and control (PPC) have a significantinfluence on this outcome? It is our contention that efficient production planningis one of the three crucial and vital driving factors that enables the otherfunctional areas to be effective. Figure 11.1 displays the driving position of PPCin a causal relationship layout.Efficient PPC has a direct and beneficial influence on both customer satisfac-tion and capacity utilisation. The first leads to greater sales volume, and thesecond to lower costs, both of which have a major impact on profits.