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Production Control - A Logistic Control Function

According to an earlier definition of American Production and Inventory Control Society (APICS), production control is defined as:

[....] the task of predicting, planning and scheduling work, taking into account manpower, materials availability and other capacity restrictions, and cost to achieve proper quality and quantity at the time it is needed, and then following up the schedule to see that the plan is carried out, using whatever systems have proven satisfactory for the purpose.

(MacKay and Wiers ([2004]))

As such, production control can be regarded as a logistic planning and control (LPC) function within a production environment. Therefore, we will first discuss logistics in the general sense in Section 1.1. Next, in Section 1.2, we will concentrate on basic decision elements in planning and control for logistics. Then in Section 1.3, we will discuss some specific characteristics of LPC in production, followed in Section 1.4 by an introduction of basic terminology.

1.1 Logistics

The term "Logistics" originates from the logistics on the battlefields, i.e. those activities that take care of the supply and removal of troops, equipment, and materials to and from the battlefields (see, for instance, https://www.merriam-webster.com/dictionary/logistics). The basic function of logistics is to make sure that the transformation process can perform its function effectively and efficiently by providing that process with the proper information, materials, and resources ("capacity"). In Figure 1.1, the material flow is shown as a double-lined arrow, going from left (input of materials) to right (output of finished products); information is shown as a single line, whereas for resources triple-lined arrows are used.

Figure 1.1 Logistics.

The idea of "logistics" may be applied to any type of transformation process. The transformation process can be a production process, turning the incoming materials ("raw materials") into outgoing products, using machines controlled by operators (capacity resources) and specifications ("information") determined by engineering. However, a transformation process can also be a maintenance process where a machine that went down (incoming material) is repaired, possibly using spare parts (also incoming materials). The repair can be done by a mechanic using tools and possibly other machines (capacity resources), based on maintenance instructions (=information).

The output of a transformation process doesn't have to be tangible. Also, in professional service organizations like banks or insurance companies transformation processes take place: in general not regarding the transformation of form, but the transformation of information which leads to intangible output. Within a production context, an engineering process is an example of a transformation process with intangible output. The incoming "material" would be information (so nonphysical). That information is turned into product and process specifications by engineers (capacity resources). Supporting information will be used, such as standard solutions or background information stored in databases. In hospitals, patients are the incoming "materials." Doctors, nurses, operating theaters, beds, and labs are the capacity resources used to turn sick patients into outgoing ex-patients (hopefully cured .). Finally, transportation processes can be regarded as transformation processes, the transformation being the change of location of the goods transported. Then clearly the goods to transport are the materials, using transportation documents while trucks, drivers, trains, etc. are the capacity resources.

Examples of transformation processes are given in Figure 1.2.

Figure 1.2 Examples of transformation processes.

Source: https://depositphotos.com/.

The logistic function aims to make sure that:

• the objects on which the transformation is performed, are available (objects such as materials, assets to be maintained, and patients);
• the resources required to perform the transformation are available (capacity resources such as machines, tools, operators, and transportation resources);
• the supporting information is available (like instructions for the transformation).

Objects, information, and resources often are physical by nature, but that's not necessarily true for all of them (cf. the example of engineering). For instance, software can be regarded as a resource required for a particular transformation, or particular documents may be available digitally before a process may start. It's not only the availability of objects, information, and resources that matter but also the removal of these items after the transformation has taken place. Making sure the output of the process (the "products") is made available for the next step is an important issue in logistics. Moreover, also getting the resources back in time and having them available for other processes is an important logistical task, either because these resources may not yet be at the place of the next process they will be used for, or because the resource cannot be used directly for a new process and will be unavailable during a certain period (e.g. because the resource needs "re-conditioning"). Sometimes even the carrier of information has to be returned to be available next time.

It will be clear that logistics is a very broad term. In many instances, publications, etc., it is often interpreted in relation to warehousing and/or transportation. In this book, we will concentrate on transformation processes that take place in production organizations (transformation of form), and thus logistics has to be interpreted with regard to physical production processes. Therefore, we will mainly use terminology from industry in this book.

1.2 Logistics Planning and Control

Logistic planning and control is all about making decisions on the availability and the supply of the materials, information, and capacity resources at which place and in what quantity to get the transformation process going. The two parts of logistics planning and control are:

• Planning: determining which jobs ("orders") should be done and setting targets on when and who should be doing what, etc.
• Control: starting the actual jobs, monitoring their progress, and if necessary intervening. This is also known as the control cycle (see Figure 1.3).

Figure 1.3 Control cycle.

We will see later that usually more than one plan is made. These plans may all differ in time horizon (e.g. a plan for the next shift versus a plan for next year), system boundaries (one workplace versus an entire factory), and units used ("truck ZF20/13 with options X, U, and Z, planned to be produced on time 10:15" versus "120 trucks on day 15").

If we look in more detail at LPC, we can distinguish the following essential decisions (see Figure 1.4):

• Actual planning: setting targets for the transformation process considered, like due dates (when should the process be done) and efficiency targets.
• Acceptance of a job offer: a job may not be acceptable from a logistic point of view because the targets set are not possible to meet (like a too-tight due date), the materials are not (all) available, or the capacity resources required are not available (at least not within the required time frame). Only accepted jobs should be considered for release.
• Release of a job chosen from all the waiting accepted jobs: this requires some kind of prioritizing of the waiting jobs. Together with the release of the job, the materials used, information needed, and the capacity resources required should be released (if that is not done yet). Jobs that have been released are called "work in progress" (WIP), and the materials connected to that job are usually stored in a buffer at the workstations.
• Progress monitoring of the released jobs: during the progress of the transformation process, jobs may run behind schedule (or ahead of schedule). Depending on the reaction time available and the measures that might be taken, an intervention might be considered. Such an intervention can be an adjustment of the number of capacity resources available (like hiring extra temporary operators) or a rescheduling of the due dates. Also, a feedback link to the release of new jobs might be considered. It might even be a change in the job specifications, for instance, in the number of products to be produced. Monitoring requires some kind of progress measurement.

Figure 1.4 Basic decision elements of logistic planning and control.

Releasing new jobs, information, materials, and capacity resources (or not) and intervening in the progress of jobs that have already been released (or removing capacity and materials from the process) is the most direct way the logistic function may influence the logistic performance of the transformation process. In other words, LPC combines "jobs," "materials,"...