The Name of Chaos is Always a Planning Problem…
Production Planning ➡️ Material Planning ➡️ Purchasing
In TPS (Toyota Production System), chaos is not a lack of planning, but the loss or confusion of process ownership. When these three departments are not clearly separated, what emerges is: A systematic failure disguised as a planning problem.
In many factories, these three functions are intertwined, and the flow has become a complete mess. Consequently, there is a situation that swallows up experienced team leaders and engineers striving for improvement:
🚨 Excess inventory
🚨 A high number of critical-urgent materials
🚨 Frequent production losses
🚨 Half-finished products (WIP build-up)
🚨 Constantly delayed customer deadlines
🚨 Everyone is right, everyone is unhappy…
So, what should be done? Who should do what to make it better?
The core divisions of labor work best when separated as follows:
⚙️ Production Planning and Control
🔹 Master Production Schedule (MPS)
🔹 Daily Production Schedule (DPS)
🔹 Capacity planning
🔹 Bottleneck management
🔹 Production schedule changes
🔹 Quoting customer delivery dates
📦 Material Planning and Control
🔸 Running MRP
🔸 Determining safety stocks
🔸 Calculating supply Kanban levels
🔸 Tracking critical and missing parts
🤝 Purchasing (Procurement)
▪️ Supplier selection
▪️ Price negotiation
▪️ Contracts
▪️ Delivery performance
▪️ Supplier capacity
▪️ Alternative suppliers
▪️ Quality agreements
▪️ Logistics agreements
▪️ Issuing POs (Purchase Orders)
If authority gets mixed up, the flow breaks down. If the flow breaks down, profit disappears.
Proper organization is more valuable than a good ERP.
Purchasing does not plan! Planning does not negotiate money!
If you could have come with me to hundreds of manufacturing companies across different sectors, you would see how similar this situation is, regardless of how different the products and production technologies are…
