Planning is a cognitive activity familiar to everyone. It plays a key role in decision making by enabling individuals to deal with changing and complex situations. Plans are used either formally or informally, for guiding any activity that has not been entirely automated. Planning mechanisms intervene in situations where a response cannot be obtained from rules triggered by current environment information [Hoc 1988].
In the fi eld of production management, it is important to make a distinction between the tasks of designing and operating a production system, although both of them represent diff erent forms of planning. Production system design is to discuss and translate the intended production strategy into a set of decisions, forming the structure that will manage the diff erent activities [Slack, Chambers, and Johnston 2004]. It means that the production system design should create appropriate conditions for control and improvement [Ballard et al. 2001]. At the strategic level, designing a production system should involve not only on-site production, but also suppliers and consumers. In operational terms, the concern is to devise the layout as well as the material and information fl ows in order to create favorable conditions for a high-performance production system [Slack, Chambers, and Johnston 2004].
Production system operation is concerned with production planning, monitoring, and correcting. Indeed, Hayes-Roth and Hayes-Roth (1979) defi ned planning as the fi rst stage of a two-stage problem-solving process named “planning and control,” in which planning is the predetermination of a course of action aimed at achieving a certain goal, and control consists of monitoring and guiding the execution of the plan to a successful conclusion. Hoc (1988) emphasizes that planning is concerned with making a decision based on extrapolation from past events.
In this chapter, planning is defi ned as the process of setting goals and establishing the procedures to attain them, only being eff ective if intertwined with the process of controlling activity execution. Th erefore, a planning and control system aims to match company output and logistic performance to the customer demands: its role is to plan, initiate, and control product delivery [Wiendahl, von Cieminski, and Wiendahl 2005]. It means that such a system should monitor production and, in the case of unforeseen deviations, readjust the order progress or the production plans.
In SCM, a planning and control system should cross company boundaries, taking into account the delivery performance of the suppliers as well as the demand behavior of the customers [Wiendahl, von Cieminski, and Wiendahl 2005].
3.3.2 Main Flaws in Production Planning and Control
Several reasons for the ineff ectiveness of production planning and control in construc- tion have been pointed out in the literature:
(a) Production planning is not usually regarded as a managerial process, but simply as the application of techniques for preparing plans. In general, little eff ort is dedicated
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to the gathering of reliable data and to the dissemination of information [Laufer and Tucker 1987]. Th e fact that several diff erent organizations are involved in a single project makes data collection and planning output diff usion even more diffi cult. (b) Control is usually based on the exchange of verbal information between the engi-
neer and the foreman. It is usually focused on short-term decisions and has no link to long-term plans [Formoso 1991], creating many problems regarding the management of long lead resources, especially engineered-to-order components. (c) Many construction companies tend to emphasize the control related to global
project aims, and fulfi llment of contracts, rather than production control. In this context, spotting problems in the production system and defi ning corrective lines of action oft en become problematic [Ballard and Howell 1997].
(d) Uncertainty about the future is a common feature of most problems involved in construction planning. However, it is oft en neglected, and the necessary actions to minimize it or eliminate its eff ects are not usually undertaken [Cohenca, Laufer, and Ledbetter 1989]. Th is is oft en related to the fact that production plan- ning systems do not provide appropriate mechanisms for managing reciprocal dependences. Moreover, much eff ort is oft en spent in the production of long-term plans that are too detailed. Th e high level of details allied to uncertainty requires frequent time-consuming updates of plans [Laufer and Tucker 1988].
(e) Information technology has had only a limited impact in production planning and control. Computer systems are oft en acquired and introduced in an organizational environment without the previous identifi cation of their users’ needs. Th is may result in the production of a large amount of useless data that indicate only the deviation from the goals to be achieved and not the causes for such deviation [Sanvido and Paulson 1992]. Moreover such systems are usually implemented in an isolated fashion in the company without considering the necessary integration to other existing sys- tems. Lack of systematic training related to the use of such systems is another prob- lem that has been detected [Turner 1993]. Similar problems have also been reported outside the construction industry [Wiendahl, von Cieminski, and Wiendahl 2005] (f) Construction managers tend to be action oriented. Most of them make decisions
mostly based on their intuition and common sense, rather than on data systemati- cally collected and analyzed [Lantelme and Formoso 2000].
As construction facilities become more complex and the markets more dynamic and fragmented, the levels of outsourcing and subcontracting tend to increase, boosting the number of organizations involved in the project supply chains, including subcontractors, designers, material suppliers, and consultants, among others. Th is creates additional dif- fi culties for coordinating supply chains, such as: (a) the number of planning alternatives increases dramatically [Fleischmann, Meyr, and Wagner 2000]; (b) divergent stakeholder interests need to be managed [Wiendahl, von Cieminski, and Wiendahl 2005]; and (c) lack of overall understanding of the project by diff erent participants [Formoso, Tzortzopoulos, and Liedtke 2002].
Both uncertainty and complexity of construction projects have a strong infl uence on the way projects should be coordinated and, consequently, on the requirements for planning and control systems [Baccarini 1996]. It is oft en necessary to use outsourcing
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strategies that transfer to suppliers the coordination of fl ow dependences between sequen- tial tasks, such as designing, fabrication, and installation. In this context, the planning process should be decentralized, and more responsibility should be given to supply chain members. Consistent objectives must be defi ned and the responsibilities for fulfi lling them need to be communicated clearly [Wiendahl, von Cieminski, and Wiendahl 2005].