Can Differentiated Production Planning and Control enable both Responsiveness and Efficiency in Food Production?

Abstract

This paper addresses the complex production planning and control (PPC) challenges in food supply chains. The study illustrates how food producers' traditional make-to-stock (MTS) approach is not well suited to meet the trends of increasing product variety, higher demand uncertainty, increasing sales of fresh food products and more demanding customers. The paper proposes a framework for differentiated PPC that combines MTS with make-to-order (MTO). The framework matches products with the most appropriate PPC approaches and buffering techniques depending on market and product characteristics. The core idea is to achieve more volume flexibility in the production system by exploiting favourable product and market characteristics (high demand predictability, long customer order lead time allowances and low product perishability). A case study is used to demonstrate how the framework can enable food producers to achieve efficiency in production, inventory and PPC processes – and simultaneously be responsive to market requirements.