Production planning and control is one of the most important tasks in the manufacturing firms as organizations try to cut their costs of production. According to Mukhopadhyay (2007), production planning is a complex task that involves developing a roadmap that should be followed in the process of coming up with the new products in the market. Production planners must be able to understand production needs, and the available resources, and balance the two in a way that would yield the desired results. Economic resources are scarce but very valuable. The organizational needs on the other hand, are unlimited.
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The role of production planning and control is to ensure that these insatiable needs are adequately met using the limited resources. In order to do this, the planner must have the capacity to control the needs to be within the limits of the available resources. It is important to note that time is one of the most important resources that must carefully be planned for in order to achieve the desired results. After managing the needs, the planning team would need to budget for these needs using the available resources in such a way that the needed results will be within their reach. In this research, a case study of Apples Inc’s production planning and control was taken because this is one of the firms that have the most efficient production units in the world.
Apple has been very successful in the market because of the quality of its products, and the efficiency with which it delivers its products. It would be interesting to understand the strategies that this firm uses in its production planning and control to achieve such a massive success. The research will analyze the production planning and control that takes place within Apple Inc.
Statement of the Problem
The market is increasingly becoming competitive as firms struggle to gain new markets. According to Jacobs (2011), it is no longer safe for a firm to restrict itself within a regional market because an attack on such regional market by other external firms may affect their profitability. For this reason, firms must find a way of expanding their production to the global market. However, this has a number of challenges that must be addressed by an individual firm in order to achieve the desired success. Mukhopadhyay (2007) says that, a firm can only export its products to other markets if it costs it less to produce and avail its products in the market when compared to the other local firms.
Firms have, therefore, realized the importance of making their production strategies very efficient in order to lower their cost of production. Production planning and control has been identified as the main solution that can help firms lower their cost of production while still maintaining the quality of their products. Some of the most successful firms in the world market have achieved their success because of their efficient production planning and control strategies. Apple is one such successful firm that has realized success through this strategy.
It is worrying that some firms are yet to appreciate the importance of having production planning and control system that would help them achieve success they need in the market. Such firms still conduct their production processes without a clear plan, the fact that has seen the cost of their products rise to unprecedented levels. It is for this reason that the researcher considered it necessary to conduct research that would shed light to such firms on the importance of having effective production planning and control strategies in the face of the current competitive market. Using Apple Inc as a case in point was important because it is one of the most successful firms in the world. Most researchers have always associated this success with the ability of the firm to develop and implement effective production planning and control strategy. The case study is expected to offer guidance to firms that are planning to use this strategy in their production process.
Justification of the research
Economic resources are increasingly becoming scarce as people try to utilize them for various developmental processes. On the other hand, needs have become numerous that meeting them adequately has become one of the greatest challenges to many firms. Many firms are under massive pressure to review their pricing strategies in order to remain competitive in the market. As many firms flock the market, firms are forced to look for strategies that would make their products competitive. Customers, on the other hand, become choosy and very demanding when they realize that they have a number of options when making their purchases. One of the most common strategies that firms do consider is to lower their prices. Customers always enjoy such price wars as they are guaranteed to spend less in their purchases.
However, firms may be faced with serious losses if it is unable to cut its costs of operations to match the lowered prices for the products. This is one of the problems that have seen many firms faced out of the market. Having a clearly written production planning and control system would be of great help to such firms that are struggling to survive in the face of an increasingly competitive market. This research offers them a way forward in addressing their production process. Using Apple Inc as a case study, this research will be offering insights to firms on the best approach they can take to cut down on their production expenses, manage the expectations of other departments, and offer effective coordination between various departments in the process of making products available in the market.
Production planning has attracted attention of many scholars who have been interested in finding solution to the increasing cost of production in the market. According to Jacobs (2011), the field of production planning has been in existence for some time as experts realized the relevance of production plans in improving the efficiency of production. For a long time, it was believed that the best way of improving efficiency of production is to purchase modern tools and equipment. However, recent researches have confirmed that efficient production goes beyond having sophisticated machines and tools in the production department.
In fact, Mukhopadhyay (2007) says that efficient production goes beyond the production department itself. It encompasses other departments such as the marketing department, the logistics unit, the procurement department, the warehousing unit, and the finance department. According to Buzacott (2012), efficient production is as a result of close coordination of various departments that are involved in the manufacture of product and delivery of the product to the customers. These departments are operated semi-autonomously within most of the organization. Production planning and control may help bring these departments together in order to deal with the issue of efficient production effectively. At this stage, it would be necessary to identify the role of each of the departments mentioned in the production process.
The procurement department plays a pivotal role in the production process. According to Neumann and Morlock, M. (2006), effective and efficient production starts with an efficient procurement process. The production department directly depends on the procurement department for raw materials it uses to manufacture the final products that are then taken to the market. In order to lower the cost of production, the procurement department must identify means of obtaining products at relatively cheap prices. According to Ross (2004), some of the firms have developed ways of sources for raw materials from reliable sources at cheap prices. The best way that Apple has been doing this is to create a scenario where it monopolizes the market for its raw materials. By having numerous suppliers, the firm has been able to dictate the price of its raw materials which help in lowering the cost of production.
This department must also ensure that the raw materials are of the right quality, shape, and other desirable attributes. Mukhopadhyay (2007) says that production units are always affected by raw materials that are of poor quality, size, or design from the one that is recommended. One of the best ways of reducing cost of production is to ensure that wastage is minimized as much as possible during the production process.
This can only be possible if the procurement department delivers materials that are of the right design and size. The quality of the raw materials delivered by the procurement department will also define the quality of the products that the firm will deliver in the market. Customers need quality products, but the process of delivering this quality is not strictly limited to the activities at the production unit. It starts with the activities the procurement department. It is clear that this department has a central role to play in the production process. Success of Apple Inc has closely been related to its effective procurement unit. This unit is operated almost as an independent firm with an independent budget (Mönch, Fowler & Mason, 2013).
It is tasked with the responsibility of looking for raw materials from all over the world based on the specifications of the marketing and production departments. These raw materials are sought for in Europe, Asia, and Africa, besides those that are found within the United States. The structures within this department at Apple Inc have made it very easy for the firm to identify new cheap sources of raw materials from various parts of the world (Khan, 2007). This is one of the greatest strengths of this firm in the market.
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The logistics unit is another department that plays a central role in ensuring that there is efficiency in the production process. According to Buzacott (2012), when the procurement unit makes purchase of raw materials, it is the responsibility of the logistics unit to ensure that these materials reach the production unit within the desired time. The duration that raw materials take between the source and the production unit’s warehouses is very important in defining the quality of the final product and its cost. Some raw materials are highly perishable, and this makes it necessary for them to reach the production unit as soon as possible.
This task must be done by the logistics unit. Sometimes the raw materials may be very delicate and can easily break if they are not treated with care. The logistics unit must find ways of handling these delicate products in order to ensure that they reach in good shape. Sometimes the cost of production is always increased by the number of raw materials that are destroyed while they are on transit from their sources to the production unit. For every material that is broken, there must be a replacement, and this comes at an extra cost. It is the responsibility of the logistics unit to minimize the breakages and damages on the products as much as possible to minimize expenses that may be incurred when the firm is forced to replace damaged products.
When the production unit has successfully manufactured the products, they will be handed over to the logistics unit to transport them to various markets where the firm operates. Once again, the logistics unit is expected to deliver quality service in order to minimize cost of delivering the product to the market. Any form of damage should be eliminated using any possible means. This unit must ensure that products are delivered to the market within the expected time in order to avoid cases where some products goes missing in the shelves at the supermarkets. The distributors must be supplied with the products in an efficient manner that would eliminate any form of dissatisfaction from the distributors themselves, or their customers.
According to Buzacott (2012), Apple Inc has one of the best logistics units in the world that has helped it supply its products in the global market. Most of the products of this firm are manufactured in China because of the availability of cheap labor. However, the main market for Apple’s products remains to be the United States. All its new products are always launched in the United States where most of the initial sales are made. It means that the firm must find efficient ways of moving its products from the manufacturing plants the market within a very short time. The firm has been very successful because of the efficiency with which it can move its products from the manufacturing plants in China to other large markets in the United States and Europe.
The warehousing unit also has a major role to plan in improving the production process within a firm. When the raw materials are delivered to the firm by the logistics unit, it is the responsibility of the warehousing unit to store them before they can be delivered to the production department. The warehousing unit has the responsibility of protecting the materials from damage or loss for the entire duration that the products will be in store. When the production unit releases the final products, the warehousing unit will be responsible for their storage until they are taken by the logistics unit for transport to other parts of the world. Unless this role is conducted in a proper manner, the effort of the procurement, logistics, and production departments may be meaningless.
The marketing unit is very important in the product development and delivery process. According to Groover (2010), the current marketing strategy has assumed the outward in approach. The time when the firm would produce products without consulting customers is long gone. Currently, firms have the responsibility of developing new products based on the specifications of the customers. It is the responsibility of the marketing unit to conduct market research in order to determine the needs and expectations of the consumers. The unit must know the design, quality and prices that best meet the expectations of the customers. This message must then be communicated to the production unit so that it may define the nature of raw materials that would best deliver the nature of products that are desired. The information will have to trickle down to the logistics unit that would need to identify the right raw materials needed to provide the products expected in the market.
The marketing unit must be closely involved in the production process. As Buzacott (2012) observes, this is the only department that closely relates to the customers. It is always in touch with the consumers and, therefore, it understands the nature of products that would offer them superior value. Their role does not end with the process of delivering their market research findings to the production department. The officers who are responsible for the market research must be physically present in the production process, especially during the development of the prototype. They must approve that the sample developed is exactly what the customers yearn for in the market.
When the production is complete, it is the responsibility of the production unit to find the best ways of ensuring that the products are successfully accepted in the market by developing effective marketing strategies for the product. Apple Inc has an efficient marketing department that has been able to expand the market share of Apple’s products beyond the developed economies. The marketing department of Apple Inc has been using both mass and social media to reach out to clients in the global market. This has enabled the firm achieve a strong market base in various countries around the world.
The finance department is pivotal in ensuring that all other departments are fully funded in the process of producing raw materials. According to Hilton (2005), many firms have failed to achieve efficient production because of the limited resources that are assigned by the finance department. It is the responsibility of this department to ensure that it understands the needs of every department, and budgets for them adequately in a manner that would assure it of success. Although the department would find it appropriate to limit the needs of some departments to be in line with the resources available for the firm, it is important to ensure that the process does not jeopardize the ability of individual departments to deliver quality service to the firm.
Using production planning and control to coordinate different departments
It is clear from the discussion above that, different departments have different roles to play in enhancing efficiency of production within the firm. It is clear the role that each department should play in order to achieve the desired result in a firm’s productions process. However, these departments must be closely coordinated for the firm to realize an overall success in its production process. When developing a production plan, all the departments must be involved. The marketing department needs to provide information about the expectation of the customers in the market. The production department needs to provide information about what is needed to provide products that will need the expectations. The logistics unit must give information about the cost of moving raw materials to the firm, and final products to the market.
The warehousing unit needs to give information of the needed facilities that would ensure that raw materials and finished products are stored safely. The finance unit needs to provide information about the available resources that can be used to meet these varying needs. The heads of these departments must engage in a consultative forum when developing the plan in order to determine how the needs can be managed within the financial capacity of the firm. The final plan should be that which is approved by the heads of all the departments mentioned. This way, the plan will ensure that each department honors the responsibilities assigned to it in order to achieve the desired results. The case study of Apple Inc’s production strategies clearly demonstrates that production planning and control is necessary for bringing together all the departments to focus on enhancing the production process.
In every piece of research, it is important to have a clearly defined methodology that would help in the collection of data that would define the findings. According to Panneerselvam (2004), choosing the most appropriate method of research is vital in defining validity of the findings of the research. In this research, a case study of Apple Inc’s production systems was used to analyze how the firm uses production planning and control to achieve efficiency in its operations. The choice of Apple Inc was made because of the efficiency with which this firm has been making its productions for the last seven years that has helped it become one of the most successful firms in the world. The case study was restricted to the production planning and control, and how the firm uses this strategy to achieve success in the market.
It would be important to note that this method has some limitations. While it enables the researcher to gather data from a practical perspective by analyzing the processes at the firm, case studies do not support empirical studies that are always common in quantitative research. It is also important to note that the validity of the research is limited to the validity of the case. The research may not have other independent means of determining the validity of the information gathered from case studies.
The case study of Apple Inc’s production strategies clearly demonstrates that this firm has been using production planning and control to improve the efficiency of this department. This firm has been able to integrate all the related departments into an environment where they can coordinate very closely because they have a shared goal. The production planning and control has played a vital role in managing expectations of different units responsible for the production process to be in line with the financial capacity of the firm. It has also enabled the firm to adequately budget for all the departments effectively in order to ensure that they have the needed resources that can enable it achieve success.
It is clear from the case study that for a firm to achieve success with production planning and control strategies, all the stakeholders should be involved when developing the plan. This would make the plan acceptable to all of them. When a plan is accepted by all the stakeholders, its implementation becomes easy as each party will commit to undertake various tasks that have been assigned to them. However, it is important to appreciate that the case had some advantages and disadvantages in addressing various issues in this area of study as discussed below
Advantages and disadvantages
The case study offered a perfect example of a success story about a firm that has been mastered the art of efficient production. Apple Inc has one of the best production strategies in the world, and given that it has been using effective production planning and control strategies, it is the best example that could be given to illustrate the areas of concern in this research. However, it is important to note that this case study had some disadvantages that need to be addressed. The main disadvantages are that the case study does not offer an opportunity to review cases of failure in using this strategy. This means that it only offers a one sided approach to analyze the issue under investigation.
Evaluation of the case
The case study has effectively addressed the importance of effective production planning and control for firms in the current competitive global market. As a researcher, I believe that the case has successfully brought out the need for firms to embrace this strategy in order to achieve success in their production units. Using such a successful firm like Apple, it is clear that this strategy can be trusted to deliver good results.
Conclusions and Recommendations
Production planning and control has been considered to be the key to having efficient production within the firm. The case study about Apple Inc’s production strategies clearly confirms this fact. This strategy has been helpful in lowering the cost of production while improving the quality of products at this firm. Sometimes firm may only need to improve on the quality of their products to justify their high prices in the market.
This means that as other firms will be struggling to cut down their prices, the firm will retain, or even consider increasing the price of their products because of their increased value. This is what Apple Inc has been doing in the global market, and the results have been impressive. It has been able to bring together all the departments to share a common goal when developing various products for its customers. Based on the findings of this research, it is important to make some suggested solutions that can be used by other firms that are still struggling with their production strategies. They should consider embracing the following recommendations.
- The top management must appreciate the need for production planning and control in addressing challenges in the production process.
- When developing a production plan, all the stakeholders from all the relevant departments should be involved.
- Each department should have clearly defined roles when implementing the production plan.
- As demonstrated in the case of Apple Inc, the management must ensure that all the stakeholders share a common goal even when working independently.
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