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Operations Management and Strategic Management · Production Planning and Control

Production Planning and Control: Objectives, Importance and Phases

Updated 10 October 2026 · Fact-checked

Production planning and control (PPC) is the function that decides what to produce, how much, when and how, and then checks that actual output follows the plan. It works in phases: prior planning, action (routing, scheduling, loading, dispatching), and follow-up control. Answer exam questions by defining PPC, then listing objectives, phases and links.

Understand Production Planning and Control Basics

Every factory faces the same problem. Customers want goods on time, at the right quality and at a fair cost. The factory has limited machines, people and materials. Production planning and control (PPC) is the system that matches the two.

Planning means deciding in advance. You decide what to make, how many units, by which process, on which machine, with which materials and by what date. Control means watching actual work against that plan and correcting deviations. Planning without control is a wish. Control without planning has nothing to measure against.

The usual objectives are: deliver on promised dates, use machines and labour fully, keep inventory (raw material, work-in-progress, finished goods) at the right level, avoid bottlenecks and idle time, maintain quality and keep cost low. Note that some of these pull against each other. Low inventory saves money but risks stock-outs. So PPC is about balance.

PPC is usually described in three phases. This page follows one scheme throughout: routing belongs to the action phase. Some textbooks treat routing as a planning activity, so if your question or study material says so, follow that, but do not place it in both phases.

  • Prior planning (pre-planning): forecasting demand, product and process decisions, material planning, tooling, capacity and manpower planning, and estimating. Checking machine capacity against expected load is planned here.
  • Action phase: routing (path of work), scheduling (time of work), loading (assigning work to machines within the planned capacity), dispatching (issuing orders to start work).
  • Control phase (follow-up): progress reporting, comparing actual with plan, corrective action, expediting, and updating the plan.

PPC does not work alone. Marketing gives forecasts and orders. Purchase and stores supply materials. Maintenance keeps machines available. Quality control sets standards. Finance provides funds, and cost accounting measures the cost impact. HR supplies skilled workers. If any link fails, the production plan fails.

How to solve Production Planning and Control Basics questions

Use this order for any theory or short-note question on PPC. It gives a complete answer that earns step marks.

  1. 1Read the verb. 'Explain' needs meaning plus detail. 'List' needs short points. 'Discuss importance' needs benefits with reasons.
  2. 2Start with a one-line definition: PPC plans production in advance and controls actual performance against the plan.
  3. 3State the objectives or importance in 4 to 6 points. Add a short reason to each point.
  4. 4If phases are asked, name all three: prior planning, action, control. Place the right activities under each. Keep routing in the action phase only.
  5. 5Mention routing, scheduling, loading, dispatching and follow-up by name wherever relevant, with one line each.
  6. 6Link PPC to other functions (marketing, purchase, stores, maintenance, quality, finance, HR) with one example each.
  7. 7For a case question, apply points to the business given. Use its product, volumes and problems.
  8. 8Close with a one-line conclusion: good PPC gives timely delivery at low cost with full use of resources.

Quickest way: Three-phase checklist

When to use it: Use when time is short, for MCQs and for 4 to 5 mark short notes.

  1. Write the three phases: Plan, Act, Control.
  2. Under Plan, put forecasting, material planning, capacity planning, manpower planning and estimating.
  3. Under Act, put routing, scheduling, loading, dispatching.
  4. Under Control, put follow-up, expediting, corrective action.
  5. For an MCQ, ask: is the activity deciding resources and targets in advance (plan), issuing and starting work (act), or checking results against the plan (control)? The answer shows the phase.

Common mistakes in Production Planning and Control Basics

  • Treating PPC as only scheduling.

    Scheduling is the most visible activity, so students equate it with the whole function.

    Fix: Remember scheduling is one part of the action phase. PPC also includes prior planning and control.

  • Mixing up routing and scheduling.

    Both deal with sequence and look similar.

    Fix: Routing decides the path and operations (what, where). Scheduling decides the time (when). Both are in the action phase.

  • Placing dispatching in the control phase.

    Dispatching sounds like supervision.

    Fix: Dispatching releases work orders, materials and tools to start production. It belongs to the action phase. Follow-up is the control phase.

  • Listing objectives without explanation.

    Students memorise headings only.

    Fix: Add a reason to each point, for example: 'Optimum inventory, to avoid both blocked funds and stock-outs.'

  • Ignoring links with other functions.

    The topic seems to concern production only.

    Fix: Prepare one example for each function, such as marketing forecast driving the plan or maintenance schedules fitting the production schedule.

  • Confusing planning with control as one activity.

    The two words are used together.

    Fix: Planning is before action and sets targets. Control is during and after action and compares actual with target.

Worked examples

Example 1

Explain the objectives of production planning and control. (Short note)

Show the solution
  1. Define PPC: it plans production in advance and controls actual output against the plan.
  2. Timely delivery: orders are completed by the promised dates, which keeps customers satisfied.
  3. Optimum use of resources: machines, labour and space are loaded evenly, reducing idle time.
  4. Optimum inventory: raw material, work-in-progress and finished goods are held at the right level, so funds are not blocked and stock-outs are avoided.
  5. Smooth flow: bottlenecks are anticipated, so work moves without waiting.
  6. Quality and cost: planned processes and checks maintain quality and keep unit cost low.
  7. Flexibility: the plan can be revised when demand or supply changes.

Answer: PPC aims at timely delivery, full use of resources, optimum inventory, smooth flow of work, consistent quality and low cost, with the flexibility to revise plans.

Example 2

A Pune-based manufacturer of auto components often misses delivery dates. Machines wait for material, and orders are started without checking machine availability. Identify the PPC phases that are failing and suggest improvements.

Show the solution
  1. Waiting for material shows weak prior planning, since material requirements were not planned against the schedule.
  2. Starting orders without checking machine availability shows weak capacity planning (prior planning) and weak loading (action phase). Capacity was not planned against expected load, so loading and scheduling do not match what the machines can do.
  3. Missed dates being found late suggests weak control. There is no timely progress reporting.
  4. Improvement 1: forecast demand with marketing and plan material with purchase and stores before release of orders.
  5. Improvement 2: plan capacity with maintenance, then prepare routing, schedules and machine loading within that capacity before dispatching orders.
  6. Improvement 3: introduce regular progress reports and expediting, comparing actual with planned output, and take corrective action quickly.

Answer: Failures occur in all three phases: prior planning (material and capacity planning), action (loading and scheduling) and control (follow-up). Fix them by linking PPC with marketing, purchase, stores and maintenance, and by using regular progress reporting.

Exam tips

  • Always give the three phases in order: prior planning, action, control. Examiners look for this structure.
  • Use short headed points rather than long paragraphs. Each point with a reason earns separate marks.
  • In case-based questions, name the business's own problem and tie each point to it.
  • For MCQs, identify whether the activity is planning, action or control. Routing, scheduling, loading and dispatching are action. Follow-up is control. If an option puts routing under planning, check which scheme your study material follows.
  • Prepare one line on each link: marketing, purchase, stores, maintenance, quality, finance and HR.

Practice questions from Production Planning and Control

Production Planning and Control Basics: frequently asked questions

What are the phases of production planning and control?

There are three: prior planning, action and control. Prior planning covers forecasting, material, capacity and manpower planning, and estimating. The action phase covers routing, scheduling, loading and dispatching. The control phase covers progress reporting, follow-up and corrective action.

What is the difference between production planning and production control?

Planning decides in advance what, how much, how and when to produce. Control checks actual performance against that plan and takes corrective action when there is a gap. Both are needed for the system to work.

Why is PPC important for a manufacturing firm?

It helps deliver on time, use machines and labour fully, hold the right inventory and keep costs down. It also reduces idle time and bottlenecks. This improves customer satisfaction and profitability.

How does PPC link with other functions?

Marketing supplies forecasts and orders. Purchase and stores supply materials. Maintenance keeps machines available, quality control sets standards, finance provides funds and HR supplies workers. PPC coordinates all of them into one plan.