PPC Task Plan Sourcing: Synchronization of Procurement and Production. A Model-based Observation

As companies continue to globalize, manufacturers face the challenge of strategically adjusting their vertical integration and restructuring production and supply chains. This leads manufacturers to increasingly pursue two strategies of restructuring. On the one hand, in the form of outsourcing value-adding activities, the focus is being placed on the core competencies of the company's own production. As a result, the vertical range of manufacture within the company is decreasing, while outsourcing is becoming more and more important. On the other hand, companies are also pursuing the strategy of least possible dependency to secure production through regional procurement of resources and expansion of the necessary competencies by means of increased vertical integration. In order to understand the consequences and effects of these changes at the level of production planning and control (PPC), a model-based view is necessary for an expanded understanding of the processual context of these changes. The PPC is the essential steering instance of production. It combines long-term tasks, e.g. Plan Sales or Roughly Plan Resources, with short-term tasks, e.g. Schedule Throughput or Plan Resources in Detail. The main PPC task, Plan Sourcing, is an essential link with its tasks and procedures between the core processes of procurement and production in the company's internal supply chain. In the context of this paper, the PPC main task Plan Sourcing is to be considered in a model-based manner, which focuses on the selection and connection of suppliers as well as the general view of the supplier management of manufacturers. For this purpose, the effect on the PPC and the production logistic objectives variables is presented by means of the consideration of the tasks and possible procedures for the fulfilment of these PPC tasks. Utilizing collected findings, a process-related derivation for the synchronization of the affected areas of procurement and production is presented.