7 steps to effective production planning and control

There are some vital areas that many manufacturers continue to overlook, which can offer huge opportunities to improve business productivity and reduce overhead costs. We believe the most significant of these is the PPC (Production Planning and Control) process – effective planning, coordination and easy visibility of problems. In most businesses: The PPC process is ‘disconnected’, fragmented and an intensely manual job. Planning is not realistic enough and based on too many simple rules and averages. Coordinating buyers, suppliers, merchandisers, development, purchasing and production teams is a real headache. Management have a hard time seeing problems quickly.

The result is that the plan changes too often and a huge amount of firefighting and crisis management is required to keep production running smoothly and deliveries on time. This is hugely inefficient and badly affects your cost efficiency, the ability to deliver on time and will restrict your ability to achieve the shorter lead times demanded by the market.

1. Define the end goals

What do we want to achieve? Sounds obvious, right? Fill our factories with work, achieve on time delivery for our buyers, and allow enough lead time to get it all done. However, it’s not quite as simple as that:

• You should plan such that you can achieve good productivity and therefore cost efficiency.
  Many businesses don’t put enough effort into this because they believe that the plan will change many times before they start production anyway. We say every little bit helps and if you can plan to optimise efficiency and succeed a good proportion of the time, in some of the lines, it’s better than not trying at all!
• The seasonal nature of most buyers ordering means that capacity will be underloaded or overloaded some months. Critical to managing this is the ability to plan quickly and accurately such that you can have pull forward or delivery extension conversations with your buyers before final confirmation. Some factories tell us it’s a pointless exercise as the buyer doesn’t care and it’s the factory problem to solve. However, our conversations with brands and retailers suggest this is changing. With margins throughout the supply chain under pressure, sourcing teams are understanding that ignoring issues like this that increases costs (and compliance risk) and somehow, somewhere that cost must be absorbed into the final price. So, it’s better to team up and find a cost-effective solution to seasonal capacity headaches.

2. Set realistic production targets

The targets that are used in, and generated from, the plan must be both realistic and achievable. To do this, you have to include all the variables you can reasonably plan for in advance and allow some buffer for the unexpected.

This, in our experience, is where the real problems start for many businesses. The plan must be made both quickly and accurately, but this is impossible using multiple spreadsheets.

The need for plans to be produced quickly enough to be able to meet the deadline to confirm with your buyer, inevitably means that shortcuts are taken and planning is less accurate, as there is simply not enough time to consider all the variables and check all the details. To create a quick plan, the usual approach is to do a basic check of sewing capacity by product type/factory/buyer, and a quick check on lead time using some simple rules and averages.

As you get closer to the production start date and delivery deadline problems may arise. For example, your team may realise there are problems with the sequence of material delivery, capacity constraints in other areas like cut, print and laundry, machine shortages in the sewing line, so only 2 lines can be set up and not 3 as planned.

As production starts, you may realise that some lines have too many style changes and will not hit the average efficiency planned so start falling behind the plan. These issues take up management time and many will cause changes to the plan. And some, in the worst-case scenario, will cost you money due to efficiency losses, overtime or at worst late delivery penalties.

So, fast and realistic planning in the first 2-3 days before you confirm delivery with your buyer is critical, and needs to be done before your purchasing and development team start executing the plan.

3. Give ownership and communicate effectively

Once the plan is finalised, the next step is to communicate the targets to the people/departments responsible for achieving them. This covers sales, merchandising, sample, lab and development teams, purchasing, heads of production (cutting, print, embroidery, wash etc) and external parties, such as buyers and third party QC.

Communication and coordination are two easy words to say, but in real life are not so easy to do… Businesses, without FastReactPlan, rely heavily on spreadsheets and email to share information.

This manual way of working inevitably means:

• Each department must define their own detailed plan from the quite basic master production plan.
• Plans are typically based on basic rules, for example ‘be ready to start cut 35 days before the delivery date’. But, because there are many styles and orders, in reality each departments sets their own priorities.
• It’s a big job to ensure all departments are updated if any time changes need to be made to the master plan.
• Version control becomes a headache.
• Lots of manual work, mistakes, missing information confusion on priorities.

4. Update status

Once you start putting the plan into action its essential to have a clear picture of where you are. This means you must get daily updates on what has been completed (i.e. samples approved, lab dips submitted, fabric and trims received), what orders have been cut, how much you produced yesterday and what has just been shipped.

In addition to updating what has been completed, its also essential to have an update on anticipated problems, so if you can see that a target is not achievable (e.g. subcon print capacity will be reduced in June, material will be delayed, a sample approval will take a week longer, sewing capacity will be lost due to planner power cut). You must also think ahead, be proactive and share this information with the planning team.

All businesses have this information – somewhere! But it’s typically spread around with some material data in the ERP system, pre-production updates in various spreadsheets and emails, cutting figures in a manual report, shipping figures in the scan pack system, and other information in people’s heads or personal notes.

It becomes difficult to get all this information into one place and shared with the planning team, so that they can quickly assess progress against the plan.

5. Report the exceptions – alert the problems

Once the daily routine of updates described in step 4 is done, the production planning team need to analyse and highlight areas where changes, delays, failures and under or over performance against the plan have occurred. These areas then need to be looked into, and if required, escalated to the senior management team.

For a typical business, this normally involves a large team of merchandisers and planning executives working endlessly, sifting through many sources of data, cross checking to see if the plan has been met, and highlight any problems and finding solutions, before starting to re-plan.

This is where technology can be a real game changer, once provided with the rules and latest data, a system can not only do the analysis far quicker, but most importantly can highlight the changes and delays, and alert everyone concerned about the issues. These alerts need to be both visual and dynamic for the planners, and in simple alert format for top management and sales teams.

In FastReactPlan, automatic alerts and fast find functions highlight PPC issues, colour indicates the type of problem.
Different views suit different job roles – for example, below you can see the factory production view and a merchandising/ development team view:

7. KPI Analysis

The final stage of the planning process is to use all the data collected during step 4 (update) to monitor performance vs targets – i.e. are you achieving what you planned to do!

This is powerful information (witness today’s hot topic of BIG DATA) as data has many uses, such as providing guidance and motivating the team, ensuring you are on the right track and where you are not, allowing you to focus on improving the right areas.

Finally, KPIs complete the feedback and Learning Loop, as it gives you real performance that can be used to update future targets/planning variables to make the plan more accurate and realistic for future season and orders – see step 2 above (Set realistic targets.)

As we noted in step 4, all businesses have this information somewhere, but its typically spread around many different files and systems, and much of it is in a format that cannot easily be summarised and analysed. So, in reality, analysis is never done and the benefit of this BIG DATA is never realised.

The conclusion

It’s worth noting that some people feel planning and management is all about steps 5 (alerts) and 6 (re-plan). After all, that’s the nature of the fashion business right? An endless job of trouble shooting and firefighting. But that’s not planning… its reacting! However, If you get steps 1, 2, 3, 4 and 7 right, the amount of effort your team will have to put into firefighting and the associated costs to the business will be greatly reduced.

A faster and more realistic planning process means greater CONTROL and AGILITY and less ‘reacting’.