Production planning and control in SMEs: time for change

Abstract

This study aims to provide a profound picture of where existing production planning and control (PPC) concepts fail in small to medium sized make-to-order (MTO) companies. While several studies have discussed the specific requirements of small and medium sized enterprises (SMEs) through surveys or observations in order to determine the suitability of existing PPC concepts, in general, in-depth empirical evidence is rare. In this article, seven case study companies are studied with the backbone of the analysis based on order progress data collected from each company. In each case, logistic performance problems are determined and traced back to their root causes. To distinguish between common problems and company specific elements, a comparative analysis across the cases has been performed. The analysis shows that a significant proportion of common PPC problems can be attributed to a limited set of decision points in the flow of orders. Furthermore, we find that most performance losses can actually be predicted before an order is released to the shop floor. Decisions after release are mainly made in order to correct for the delays caused before release. In the pre-production phase, before release, two common problem areas are identified: (1) inadequate capacity planning overviews to support sales decisions, and (2) uncontrolled delays in engineering. Observed problems that appear after release tend to be more diverse and company-specific. A review of available PPC concepts for MTO SMEs indicates that these areas have been neglected in the literature to date, leading to our call for a new focus in PPC research.