Production planning and control – explained simply

Without clear planning and control, production processes quickly run into trouble: materials are missing, machines stand idle, and delivery deadlines are missed. Structured planning creates transparency and enables fast responses – while control ensures reliable execution and early intervention when deviations occur.

Together, they safeguard efficient workflows, better use of resources, and consistent quality and on-time delivery – especially vital in regulated industries.

In most cases, production managers are responsible for planning and control. In smaller companies, a single person may cover both roles. Close coordination with purchasing, sales, and logistics is essential – only then can material flows and delivery schedules be seamlessly aligned.

Digital tools such as ERP or MES systems support those in charge by bringing data together in one place, automating processes, and simplifying the management of capacities and orders.

Production planning and control consist of several areas that together ensure production runs efficiently, transparently, and on schedule.

Tasks of production planning

Production program planning
This defines which products will be manufactured, in which quantities, and within which timeframes. Production program planning is a central part of strategic and tactical production planning – and belongs to the core area of production management. It operates on three levels:

• Long-term (over three years): strategic planning of market segments and product lines
• Medium-term (quarterly or yearly): decisions at the level of product groups
• Short-term (daily or weekly): specific definition of production quantities

Material requirements planning
This determines which materials and components are needed. Starting from the primary requirements (saleable end products), the secondary requirements (e.g., individual parts, raw materials) are calculated. Digital tools such as ERP or PIM systems support this by efficiently managing material master data and automating requirements calculations.

Production process planning
This coordinates the production flow: which orders run when, on which machines, and with which staff. It includes lot size planning, capacity and scheduling, sequence planning, detailed scheduling, and order release – the link to production control.

The objectives of production planning and control are to design production processes in a way that makes the best possible use of materials, machines, personnel, and time. Effective production planning ensures that customer requirements are met reliably – while keeping costs low, efficiency high, and processes flexible.

While the objectives of production planning focus on structure, demand, and resource utilization, production control ensures smooth and on-time execution of that planning in practice.

Key objectives include:

• Efficient use of resources: avoid bottlenecks and reduce downtime
• On-time delivery: ensure punctual completion and high delivery reliability
• Inventory optimization: strike the right balance between stock levels and demand – for example through just-in-time approaches
• Flexibility: remain responsive to order changes or disruptions
• Quality assurance: meet quality and compliance requirements (e.g. GxP, ISO)
• Cost control: forward-looking planning and control lower production and inventory costs

Especially in regulated industries such as pharmaceuticals, medical technology, or cosmetics, well-designed production planning plays a crucial role in competitiveness and process reliability.

In practice, production planning and control go hand in hand: while planning defines what will be produced and when, control ensures that these plans are executed, monitored, and adjusted if necessary. Only the interaction of both areas guarantees a smooth and efficient production process.

• Production planning defines which orders will be manufactured, when, and in what quantities – typically in the short to medium term.
• Production control takes care of operational execution: releasing orders, coordinating workflows, and monitoring progress.

Example: Planning specifies that product A will be manufactured next week. Control ensures that everything is in place to make it happen.

Production planning can be divided into three overarching levels: strategic, tactical, and operational. Each level plays a distinct role in the planning process – from long-term direction to day-to-day execution on the shop floor.

1. Strategic production planning
   This level defines the long-term direction of production – typically over several years. Key questions include: Which sites and technologies should be used? How many production lines are required? Which products should be prioritized? The goal is to create the framework for efficiency, quality, and growth.
2. Tactical production planning
   The tactical level translates strategic goals into concrete production structures. It determines which capacities, machines, materials, and staff are required. Processes, timeframes, and resource allocation are planned in a way that ensures implementation is realistic and reliable.
3. Operational production planning
   This level focuses on daily or weekly execution: which orders will be processed when, and which resources are available? Operational planning defines these details – and production control ensures everything runs smoothly, adapts to deviations, and meets the set objectives.

The goal: to safeguard on-time delivery, capacity utilization, and responsiveness in day-to-day operations. These levels together form the foundation for practical production planning – from requirements analysis to operational execution.

The following section outlines the typical production planning process – including a practical example and tips on how to optimize production planning.

Steps in production planning

Production planning follows a successive approach: the overall objective – economically viable production – is broken down into sub-tasks, which are addressed step by step. The result of each step forms the basis for the next. This method is known as successive planning and is characteristic of modern planning systems – particularly when dealing with complex products and a wide variety of variants.

The most important steps in production planning at a glance:

• Primary requirements planning
  This defines the quantities of finished and intermediate products needed within a given timeframe. The basis is provided by sales forecasts or specific customer orders.
• Secondary requirements planning
  Derived from the primary requirements, this step determines which raw materials, semi-finished goods, and components (in-house or external) are required for production. The objective is to ensure material availability precisely when needed.
• Scheduling and capacity planning
  This is where detailed planning takes place: which orders can be processed when, and on which machines? First, preliminary start and end dates are assigned (throughput scheduling). Then, the feasibility of these orders is checked against available capacities. If conflicts arise, capacity balancing is applied – for example, by adjusting shifts, rescheduling, or outsourcing.

Once planning is completed, operational control begins – the practical execution of the planned processes. It consists of the following steps:

Steps in production control

• Order release
  Planned production orders are released. Accompanying documents with all relevant production information are created, materials are reserved, and processing dates are set.
• Workflow planning
  The objective is to execute production steps in the correct sequence – with optimal machine utilization, short lead times, and high delivery reliability. Tasks are assigned to the appropriate workstations.
• Order monitoring
  Production progress is continuously monitored to identify deviations early and make corrections where necessary – ensuring a stable and transparent production process.

Production planning and control are not one-off activities but an ongoing process divided into several stages – from strategic direction to the evaluation and optimization of ongoing operations:

1. Long-term production planning

At the strategic level, overarching production goals, production direction, and fundamental quality standards are defined. This type of planning typically covers a period of more than three years.

2. Medium-term production planning

This level focuses on planning over months up to a year. The main aspects include resource availability, capacity planning, and required working hours. The objective is to prepare production processes in a structured and realistic way.

3. Short-term production planning

Here, the focus is on daily or weekly detailed planning: what quantities will be produced, and which machines and employees will be in use at what times? This also includes monitoring ongoing processes and making adjustments in case of bottlenecks or disruptions.

4. Production control

Control ensures the implementation of planned processes: order release, monitoring, compliance with requirements, and ad-hoc adjustments during operations. It is crucial for smooth workflows and quick responses to deviations.

5. Production analysis

Finally, performance is evaluated: how efficient was production, and where is there room for improvement? Factors such as process performance, product quality, and cost-effectiveness are assessed. The results flow back into long-term planning as part of a continuous improvement process. Production analysis also delivers key metrics on process performance and goal achievement – making it essential for the objectives of production control.

Production planning and control are based on a wide range of proven models and decision-making methods. They help analyze complex processes in a structured way, design them efficiently, and ensure compliance with regulatory requirements.

Hanover supply chain model: thinking holistically

A well-known example is the Hanover supply chain model, which links production planning, control, and logistical objectives such as delivery reliability or capacity utilization in a holistic approach.

Methods of requirements planning

In practice, different methods of requirements planning are used, including:

• Deterministic methods, where requirements are calculated precisely based on bills of materials and working times
• Stochastic methods, which use historical consumption data to create forecasts
• Heuristic methods, where experience or expert judgment is applied

Scheduling and capacity planning

There are also proven approaches in scheduling and capacity planning, such as forward, backward, or midpoint scheduling. Depending on the method, planning starts from the production start date, works backward from the delivery date, or focuses on the bottleneck resource.

Sequencing rules

In production control, sequencing rules – such as first in, first out (FIFO) or shortest processing time (SPT) – help assign orders efficiently to machines and ensure high utilization.

FEFO: practical for regulated industries

A particularly practical example is the FEFO principle (first expired, first out), widely used in the food, cosmetics, and pharmaceutical industries. Products are prioritized based on their expiration date to safeguard quality and comply with legal requirements.

The Yaveon ERP industry solution supports many of these methods automatically – from requirements planning to scheduling to FEFO-based batch processing. In this way, theory becomes a practical, rule-based process that creates transparency and reliably guides day-to-day production.

In production planning and control, different objectives often collide – and not all of them can be achieved optimally at the same time. This is referred to as the polylemma of production planning.

Typical conflicts include:

• High machine utilization often leads to longer throughput times
• Low inventory levels increase the risk of delivery bottlenecks
• Flexible planning can reduce planning reliability

These objectives influence each other – both positively and negatively. The challenge lies in finding the right balance that ensures cost-effectiveness, on-time delivery, and compliance.

Modern ERP systems such as the Yaveon ERP industry solution support this balancing act with transparent data, automated processes, and integrated rule sets. This allows companies to stay flexible without losing stability.

In regulated industries such as pharmaceuticals, medical technology, biotechnology, cosmetics, chemicals, or food, particularly strict legal requirements apply. Production planning and control face specific challenges here, as all processes must be compliant, transparent, and audit-ready – while remaining economically viable.

Strict quality standards and regulations

Authorities such as the FDA, EMA, or local supervisory bodies set clear requirements. Standards like GMP, ISO 13485, or GxP guidelines must be fully observed, documented, and regularly validated – including during process changes or new batches.

Mandatory documentation

Every single step – from raw material delivery to finished product shipment – must be traceable and documented. Control ensures that all planned workflows are executed and recorded correctly – for example, via batch records or electronic batch records.

Validation and qualification

Equipment, software, processes, and work instructions must be validated and qualified before use. Planning and control must work together to ensure full compliance – even when changes occur.

Longer lead times

Inspections, approvals, and releases extend throughput times. Production planning must factor in realistic time buffers, while control ensures on-time execution despite regulatory hurdles.

Frequent audits and inspections

Companies must always be prepared for internal and external audits. Control ensures that all processes are fully traceable and audit-ready.

Risk management

Regulations require risk-based planning and control: supplier assessments, risk analyses, deviation management – all embedded in an integrated approach. Deviations must be addressed quickly and documented completely.

Safety and environmental requirements

Handling hazardous substances, special storage conditions, and disposal are subject to strict safety regulations. Control must ensure consistent implementation in practice.

Capacity management and flexibility

Recalls, new regulatory requirements, or raw material shortages demand high adaptability. Planning and control must jointly ensure that delivery capability and quality are maintained despite these challenges.

High cost of non-compliance

Errors in planning or deficiencies in control can lead to recalls, fines, or production stoppages – with significant financial and legal risks.

Production planning and control in regulated industries are far more complex than in other sectors. Beyond the classic parameters of time, cost, and capacity, regulation, quality, and risk must always be considered. Without digital support from specialized ERP systems, this level of complexity is nearly impossible to manage.

For production planning and control to work efficiently, flexibly, and in compliance in practice, the right digital support is essential. Depending on company size, industry, and process complexity, different software systems are used: ERP, MES, or APS. Each plays a distinct role in the planning process – from rough planning to real-time control.

The Yaveon ERP industry solution, based on Microsoft Dynamics 365 Business Central, helps companies in the process industry manage their production processes holistically, transparently, and in compliance – from rough planning to operational execution.

The solution includes industry-specific features that reliably address typical challenges such as bottlenecks, quality requirements, or strict regulations:

• Graphical planning board for clear and flexible production planning with drag-and-drop
• Automated planning suggestions based on orders, availability, and stock levels
• Integrated batch tracking and quality control for maximum safety and compliance
• Built-in industry logic: FEFO principle, recipe management, and complete traceability

With the Yaveon ERP industry solution, production planning and control become significantly simpler, safer, and more efficient – enabling stable processes, high delivery reliability, and greater control in everyday production.