Production planning and control explained simply

Without clear planning and control, production processes can quickly come to a halt: materials run short, machines stand idle, and delivery dates are missed. Structured planning creates transparency and enables quick responses – while control ensures reliable execution and early intervention when deviations occur.

Together, they lead to more efficient workflows, better use of resources, and consistent quality and on-time delivery – aspects that are especially important in regulated industries.

Production managers or heads of production are usually responsible for planning and control. In smaller companies, a single person may handle both tasks. 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 responsible by centralizing data, automating processes, and providing a clear overview of capacities and orders.

Production planning and control consist of several subareas that work together to ensure that production processes run efficiently, transparently, and on schedule.

Tasks of production planning

Production program planning
This defines which products are to be manufactured, in what quantities, and within which time frames. Production program planning is a key element of strategic and tactical production planning – and lies at the heart of production planning management.
Planning takes place on three levels:

• Long-term (over three years): strategic planning of market segments and product lines
• Medium-term (quarterly or annual): decisions at the product group level
• Short-term (daily or weekly): concrete scheduling of production quantities

Material requirements planning
This determines which materials and components are needed. Based on the primary requirements (finished products ready for sale), the secondary requirements (e.g. individual parts, raw materials) are calculated. Digital tools such as ERP or PIM systems support efficient management of material master data and automated requirements calculations.

Production process planning
This coordinates the actual production process: which orders run when, on which machines, and with which personnel? This includes lot size planning, capacity and scheduling, sequencing, detailed scheduling, and order release – the interface between planning and control.

Tasks of production control

Order release
Production orders are approved, materials reserved, processing times assigned, and all production-relevant data made available.

Order monitoring
The ongoing production process is monitored. Deviations are detected early – and processes are actively adjusted as needed.

The objectives of production planning and control are to design production processes in a way that materials, machines, personnel, and time are used as efficiently as possible. An optimized production plan ensures that customer requirements are met reliably – with minimal costs, maximum efficiency, and high flexibility.

While the goals of production planning focus on structure, demand, and resource utilization, production control aims to ensure that this plan is implemented smoothly and on schedule in day-to-day operations.

Key objectives at a glance:

• Efficient use of resources: Avoid bottlenecks and minimize downtime
• Adherence to deadlines: Ensure on-time completion and reliable delivery performance
• Inventory optimization: Maintain the right balance between stock levels and demand – for example, through just-in-time approaches
• Flexibility: Stay responsive to changes in orders or disruptions
• Quality assurance: Comply with quality and compliance standards (e.g. GxP, ISO)
• Cost control: Proactive planning and control help reduce production and storage costs

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

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

• Production planning determines which orders are to be manufactured, when, and in what quantities – typically in the short to medium term.
• Production control, on the other hand, handles the operational implementation: it releases orders, coordinates workflows, and monitors progress.

Example: Planning specifies that Product A will be produced next week. Control ensures that everything is ready to make it happen.

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

1. Strategic production planning
   This level defines the long-term direction of production – typically over several years. Typical questions include: Which locations and technologies should be used? How many production lines are required? Which products are the focus?
   The goal is to establish the framework for efficiency, quality, and sustainable growth.
2. Tactical production planning
   The tactical level translates strategic goals into concrete production structures. It determines which capacities, machines, materials, and employees are needed. Processes, time frames, and resource allocation are planned to ensure that implementation is both realistic and stable.
3. Operational production planning
   This is where day-to-day or week-to-week execution takes place: Which orders will be processed when? Which resources are available? Operational planning defines these details – while production control ensures that everything runs smoothly, adjustments are made when deviations occur, and objectives are met.

The aim: to ensure on-time delivery, high capacity utilization, and flexibility in daily operations. These levels form the foundation of practical production planning – from determining requirements to operational implementation.

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

Steps of production planning

Production planning follows a successive structure: the overall objective – achieving a cost-effective production process – is divided into smaller sub-tasks that are processed step by step. The results of one step form the basis for the next.
This approach is known as successive planning and is common in modern planning systems – especially when dealing with complex products and a wide range of variants.

The most important steps of production planning at a glance:

• Primary requirements planning
  Here, the required quantities of finished and semi-finished products are determined for a defined time period. The basis for this is provided by sales forecasts or specific customer orders.
• Secondary requirements planning
  Based on the primary requirements, the necessary raw materials, semi-finished goods, and components (whether in-house or externally sourced) are identified. The goal is to ensure material availability that matches production needs.
• Scheduling and capacity planning
  This step involves detailed scheduling: Which orders can be produced when and on which machines? Initially, preliminary start and end dates are defined (lead time scheduling). Next, the feasibility of the plan is checked against available capacities. If bottlenecks arise, they are resolved through capacity balancing – for example, by adjusting shifts, rescheduling, or outsourcing work.

Process of production control

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

• Order release
  Planned production orders are approved. Accompanying documents with all production-relevant information are created, materials are reserved, and processing times are assigned.
• Process scheduling
  The goal is to ensure production takes place in the correct sequence – with optimal machine utilization, short lead times, and high adherence to deadlines. Production steps are assigned to the appropriate workstations.
• Order monitoring
  The progress of production is continuously monitored to identify deviations early and take corrective action when needed – ensuring a stable and transparent production process.

Production planning and control are not one-time activities but continuous processes structured into several stages – from strategic alignment to the evaluation and optimization of ongoing operations.

1. Long-term production planning

At the strategic level, overarching production goals, the direction of production, and fundamental quality standards are defined. This planning typically covers a period of more than three years and provides the foundation for sustainable growth and consistent performance.

2. Medium-term production planning

This level focuses on planning over a period of several months up to one year. The key aspects include resource availability, capacity planning, and working time management. The objective is to prepare production processes in a structured and realistic way.

3. Short-term production planning

This stage involves daily or weekly detailed scheduling: What quantities will be produced? Which machines and employees will be used, and when? Monitoring ongoing processes and making adjustments in case of bottlenecks or disruptions are also part of this phase.

4. Production control

Control ensures that the planned processes are executed: order release, monitoring, compliance with specifications, and ad hoc adjustments during operations. It is crucial for smooth workflows and quick responses to deviations.

5. Production analysis

Finally, results are evaluated: How efficient was the production process? Where is there room for improvement? Key factors such as process performance, product quality, and cost-effectiveness are assessed.
The insights gained feed back into long-term planning as part of a continuous improvement process. The results of the production analysis provide essential performance indicators for process efficiency and goal achievement – and are therefore also an integral part of production control.

Production planning and control rely on a wide range of proven models and decision-making methods. They help analyze complex processes in a structured way, make production more efficient, and ensure compliance with regulatory requirements.

Hannover supply chain model: thinking holistically

A well-known example is the Hannover supply chain model, which holistically links production planning, control, and logistical performance targets such as on-time delivery or capacity utilization.

Methods of requirements planning

In practice, several approaches are used to determine requirements, including:

• Deterministic methods, which calculate demand precisely based on bills of materials and work schedules
• Stochastic methods, which use historical consumption data to create forecasts
• Heuristic methods, which draw on practical experience or expert assessments

Scheduling and capacity planning

Scheduling and capacity planning also make use of established methods such as forward scheduling, backward scheduling, and center scheduling.
Depending on the approach, planning starts from the beginning of production, works backward from the delivery date, or focuses on the critical bottleneck as the key reference point.

Sequencing

In production control, sequencing rules – such as First In, First Out (FIFO) or Shortest Processing Time (SPT) – help assign orders efficiently to machines and achieve high capacity utilization.

FEFO: practical for regulated industries

A particularly relevant approach for regulated sectors 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 ensure quality and compliance with legal requirements.

The industry-specific ERP solution of Yaveon supports many of these methods automatically – from requirements planning and scheduling to FEFO-based batch management.
This transforms theoretical models into practical, rule-based workflows that create transparency and guide users reliably through everyday production.

In production planning and control, different objectives often compete with one another – and not all can be optimized at the same time. This is referred to as the polylemma of production planning.

Examples of conflicting objectives:

• High machine utilization often leads to longer lead 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 key challenge lies in finding the right balance that ensures economic efficiency, on-time delivery, and regulatory 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 enables companies to stay flexible without compromising stability.

In practice, companies face numerous challenges when it comes to production planning and control. The more complex the processes, the higher the risk of delays, rising costs, or quality issues. The following obstacles are particularly common:

• Managing large volumes of data: Without centralized systems, it’s nearly impossible to keep track of production, inventory, and order data.
• Identifying bottlenecks early: A lack of transparency regarding materials, personnel, or machines makes planning and control more difficult.
• Frequent plan changes: Customer requests, delivery delays, or market fluctuations make stable process planning a challenge.
• Unexpected disruptions: Machine breakdowns or quality issues require quick reactions and flexible adjustments in control.
• Demand fluctuations: Sudden changes in demand challenge both planning and execution.
• Increasing process complexity: Product variety, customer-specific requirements, and regulatory standards raise the level of effort required.
• Lack of transparency in communication: Poor coordination between departments leads to delays or misguided decisions.
• Resource bottlenecks: If materials, capacity, or skilled workers are lacking, production cannot proceed as planned.
• Missing real-time data: Without up-to-date information, deviations in production cannot be detected or corrected in time.
• Manual processes: Without digital support, production control becomes prone to errors, delays, and unnecessary effort.

Modern ERP systems help overcome many of these challenges – by providing centralized data, automated workflows, and a solid foundation for informed decision-making that enables effective production planning and control.

In regulated industries such as pharmaceuticals, medical technology, biotechnology, cosmetics, chemicals, and food production, strict legal and regulatory requirements apply. Production planning and control in these sectors face specific challenges – processes must be compliant, transparent, and fully auditable while remaining economically viable.

1. Strict quality standards and regulations

Authorities such as the FDA, EMA, or local regulatory bodies set clear requirements. Standards like GMP, ISO 13485, or GxP guidelines must be consistently met, fully documented, and regularly validated – even when processes change or new batches are introduced.

2. Mandatory documentation

Every step – from the delivery of raw materials to the shipment of finished products – must be traceable and documented. Production control must ensure that all planned activities are correctly executed and recorded, for example through batch protocols or electronic batch records (EBR).

3. Validation and qualification

Equipment, software, processes, and work instructions must be validated and qualified before use. Planning and control must work together to ensure that all requirements are implemented in full compliance – even in the event of changes.

4. Longer lead times

Testing, approvals, and release processes extend production cycles. Production planning must include realistic time buffers, while control ensures on-time execution despite regulatory constraints.

5. Frequent audits and inspections

Companies must always be prepared for internal and external inspections. Production control must guarantee that all processes are fully traceable, documented, and ready for audit at any time.

6. Risk management

Regulations require risk-based planning and control, including supplier evaluations, risk analyses, and deviation management. In case of deviations, corrective actions must be implemented and documented without delay.

7. Safety and environmental requirements

Handling hazardous substances, specific storage conditions, and waste disposal are subject to strict safety standards. Production control must ensure consistent compliance with these measures in daily operations.

8. Capacity management and flexibility

Product recalls, new regulatory requirements, or shortages of raw materials demand high adaptability. Planning and control must work hand in hand to maintain delivery capability and product quality despite such challenges.

9. High cost of non-compliance

Errors in planning or inadequate control can lead to recalls, fines, or production shutdowns – with significant financial and legal consequences.

Production planning and control in regulated industries are significantly more complex than in other sectors. Beyond the classic parameters of time, cost, and capacity, regulatory compliance, quality, and risk must be continuously factored in.
Without digital support from specialized ERP systems, this level of complexity is nearly impossible to manage efficiently and in full compliance.

For production planning and control to function efficiently, flexibly, and in full compliance in practice, the right digital support is essential. Depending on the company’s size, industry, and process complexity, different software systems are used – ERP, MES, or APS. Each of them covers specific tasks within the planning process – from high-level planning to real-time control.

The Yaveon ERP industry solution, based on Microsoft Dynamics 365 Business Central, enables companies in the process industry to manage their production processes holistically, transparently, and in full compliance – from high-level planning to day-to-day execution.

The solution includes industry-specific functionalities that reliably address typical challenges such as bottlenecks, quality requirements, and strict regulatory standards:

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

With the Yaveon ERP industry solution, production planning and control become significantly simpler, safer, and more efficient – ensuring stable processes, on-time delivery, and greater control in day-to-day production.