Plan Target Actual - Approach

Production plan

To verify the execution of the production plan, you will maybe first compare the actual figures with the planned figures. Doing so, it soon becomes clear that the informative value of a simple plan/actual comparison is not particularly high.

Figure 1 shows only that the actual production is less than planned, and that the product ratio A:B has changed compared to the plan.

Target value

It may absolutely happen that the actual quantity is less than planned, although the production has gone better than scheduled: little technical standstills, less waste production, shorter set-up times...

The reason for this phenomenon is that the quantity produced is also influenced by parameters that are not within the responsibility of the production. Therefore, the influences of the market should be separated from the influences of production.

In a new key figure, the target production, commercial influences are eliminated. Thus, the efficiency of the production process can be evaluated at a glance.

Figure 2 shows that the target quantity is smaller as the planned quantity due to market influences. The actual quantity is even greater as the target value, since the production has gone better than planned. At first glance, this is not to be seen.

Deviation analysis

What factors are responsible for the deviations? This question can be answered by considering the relevant influencing variables step by step.

Figure 3 shows that the decrease of the target quantity is due to a lower availability of the plant. The differing product mix in turn leads to a slight increase of the target quantity due to the better productivity. The increase in the actual quantity is due to the improved quality, as a result of a lower waste production.

Definitions and variables

Plan quantity

The planned quantity is the production quantity, which can be achieved for the planned product mix, in consideration the planned values for the different influencing variables (= production program planning).

Actual quantity

The actual quantity is the quantity actually produced.

Target quantity

The target quantity is the quantity which could be produced when the actual produced articles are produced with the planned production losses.
Effects which cannot be influenced by the production are excluded.

Availability

Downtimes, which cannot be used for production, are considered in the availability. These are Holidays, working holidays, as well as planned major repairs, but also unscheduled standstills like strikes.
The production does not affect the availability.

Efficiency

Downtimes caused by the production are considered in the utilization key figure. These includes periodical maintenance or cleaning stops, set-up times for changing the machines to other products or shutdowns due to technical breakdowns.

Product mix

The composition of the product range has a deciding influence on the produced quantity, since the distinct product types usually have a different productivity.
The product mix is usually dictated by the market.

Grammage

The produced goods are often made in different grammages. The grammage also usually determines the possible production speed. The heavier, the product types, the slower is the possible machine velocity.
The grammage of the manufactured goods is determined by the market.

Velocity

Between production speed and grammage usually there is an additional relationship. The "target speed" is determined by the grammage of the actually produced goods.
Whether the possible speed will be achieved actually, lies within the responsibility of the production.

Utilization of material

If a cutting process is necessary to bring the finished products to the desired customer formats, cutting waste will be generated.
The amount of the cutting waste is primarily determined by the customer orders and can only slightly be influenced by the production.

Quality performance

During the production process, naturally there will be also created goods, which cannot be used for sale for quality reasons.
The quantity of the waste produced is affected by the production process.