Production Activity Control (PAC)

Production Activity Control (PAC): A Comprehensive Guide for CPIM Exam Success

Production Activity Control (PAC): A Complete Guide

1. Why is Production Activity Control Important?

Production Activity Control (PAC) is a critical function within manufacturing operations because it serves as the execution arm of the production planning and control system. While higher-level planning systems such as the Master Production Schedule (MPS) and Material Requirements Planning (MRP) determine what needs to be produced and when, PAC is responsible for ensuring that those plans are actually carried out on the shop floor.

PAC is important for several key reasons:

• Bridging Planning and Execution: PAC translates planned orders from MRP into actionable work on the production floor. Without effective PAC, even the best plans remain theoretical.

• Meeting Customer Delivery Dates: By managing the flow of work through production, PAC ensures that orders are completed on time, directly impacting customer satisfaction and service levels.

• Optimizing Resource Utilization: PAC helps ensure that labor, machines, and materials are used efficiently, reducing idle time and waste.

• Reducing Work-in-Process (WIP) Inventory: Effective PAC controls the amount of work on the shop floor, minimizing excessive WIP which ties up capital and creates congestion.

• Providing Feedback to Planning Systems: PAC provides critical data back to MRP and capacity planning systems about actual performance versus planned performance, enabling continuous improvement.

• Managing Priorities: In a dynamic manufacturing environment, priorities constantly shift. PAC provides mechanisms to re-sequence and reprioritize work to respond to changes in demand, material availability, or capacity.


2. What is Production Activity Control?

Production Activity Control (PAC) is defined by APICS as the function of routing and dispatching work to be accomplished through various production facilities, and performing supplier control. It encompasses the principles, approaches, and techniques needed to schedule, control, measure, and evaluate the effectiveness of production operations.

PAC consists of two major components:

• Shop Floor Control (SFC): Managing the flow of work through the internal manufacturing facility.
• Supplier Control (Vendor Scheduling): Managing the flow of materials from external suppliers.

The primary objectives of PAC include:

• Executing the MPS and MRP plans
• Optimizing the use of resources (labor, machines, materials)
• Minimizing work-in-process inventory
• Maintaining desired customer service levels
• Providing real-time information on shop floor activities
• Feeding back actual performance data to planning systems

Key Terminology:

• Shop Order (Manufacturing Order / Work Order): An authorization to manufacture a specific quantity of a specific item.
• Routing: A document that specifies the sequence of operations, work centers, and standard times required to produce an item.
• Dispatching: The selecting and sequencing of available jobs to be run at individual work centers and the assignment of those jobs to workers.
• Dispatch List: A listing of manufacturing orders in priority sequence, showing the information needed by the work center to carry out work.
• Operation: A single step in the manufacturing process performed at one work center.
• Lead Time: The span of time required to perform a process, including queue, setup, run, wait, and move times.


3. How Does Production Activity Control Work?

PAC operates through a series of interconnected functions and activities. Understanding the flow is essential for exam success.

A. Order Review and Release

Before a planned order from MRP becomes a shop order, it must go through an order review and release process. This involves:

• Checking material availability: Ensuring all required components and raw materials are available or will be available when needed.
• Checking tooling availability: Verifying that necessary tools, fixtures, and gauges are available.
• Checking capacity availability: Confirming that the required work centers have sufficient capacity.
• Releasing order documentation: Issuing the shop order packet, which typically includes the shop order, routing, material requisitions, move tickets, and engineering drawings.

This gatekeeping function is critical because releasing orders without the necessary resources creates shop floor congestion and reduces throughput.

B. Detailed Scheduling

Once orders are released, they must be scheduled through the required operations. Two primary scheduling techniques are used:

• Forward Scheduling: Starts from the current date (or order release date) and schedules each operation forward in time to determine the earliest completion date. Used when the question is "When can we complete this order?"

• Backward Scheduling: Starts from the due date and schedules each operation backward to determine when the order must be started. Used to determine the latest start date while still meeting the due date. This is the approach typically used by MRP.

Components of Manufacturing Lead Time:

The total time an order spends on the shop floor includes:

• Queue Time: Time a job waits at a work center before processing begins. This is typically the largest component of manufacturing lead time (often 80-90%).
• Setup Time: Time required to prepare the work center for the operation.
• Run Time: Actual processing time (run time per unit × order quantity).
• Wait Time: Time a job waits after processing at one work center before being moved to the next.
• Move Time: Time required to physically transport the job from one work center to the next.

C. Priority Control and Dispatching

Priority control determines the sequence in which jobs at a work center should be processed. Common priority rules (dispatching rules) include:

• First Come, First Served (FCFS): Jobs are processed in the order they arrive at the work center.
• Earliest Due Date (EDD): Jobs with the earliest due date are processed first.
• Earliest Operation Due Date (ODD): Jobs with the earliest due date for the specific operation are processed first.
• Shortest Processing Time (SPT): Jobs with the shortest processing time are done first. This minimizes average flow time and average number of jobs in the system but can cause long jobs to be perpetually delayed.
• Critical Ratio (CR): A calculated priority index. CR = Time Remaining / Work Remaining. A CR less than 1.0 means the job is behind schedule. A CR greater than 1.0 means the job is ahead of schedule. A CR equal to 1.0 means the job is on schedule.
• Least Slack: Slack = Time Remaining – Work Remaining. Jobs with the least slack are processed first.

The dispatch list is the primary tool used to communicate priorities to the shop floor. It is typically generated daily and shows the priority sequence of jobs at each work center.

D. Techniques for Managing Lead Time and WIP

Several techniques can be used to reduce lead time or manage WIP:

• Operation Overlapping (Lap Phasing): Moving a partial lot to the next operation before the entire lot is completed at the current operation. This reduces total throughput time but increases material handling complexity.
• Operation Splitting: Running the same operation on two or more machines simultaneously, dividing the lot among them. This reduces the run time for that operation.
• Lot Splitting: Dividing a lot into two or more sublots that are processed through the remaining operations as separate lots. This can reduce lead time but increases setup time and complexity.

E. Input/Output Control (I/O Control)

Input/Output Control is a critical capacity management technique at the execution level. It monitors and compares the planned input and planned output of a work center against actual input and actual output.

Key principles:

• If input exceeds output: WIP (backlog) at the work center increases, lead times increase, and congestion grows.
• If output exceeds input: WIP decreases, and eventually the work center may run out of work (idle time).
• To reduce WIP and lead times: Output must exceed input for a period, or input must be reduced.
• The key insight: You cannot control output by simply increasing input. In fact, increasing input to an already overloaded work center often decreases output due to congestion. The most effective way to control lead times is to control the input.

An I/O report typically shows cumulative deviations of actual versus planned input and actual versus planned output, with tolerance limits to trigger corrective action.

F. Data Collection and Feedback

PAC requires robust data collection to track:

• Job status (which operation is currently being performed)
• Quantities completed and scrapped
• Actual times versus standard times
• Material usage
• Labor and machine utilization

This data is essential for:
• Updating job status for priority control
• Providing feedback to MRP and CRP
• Calculating efficiency and utilization metrics
• Supporting cost accounting
• Identifying problems and enabling corrective action

Methods of data collection include manual reporting, bar coding, RFID, and automated machine monitoring systems.

G. PAC in Different Manufacturing Environments

The application of PAC varies by manufacturing environment:

• Job Shop: PAC is most complex here due to varied routings, intermittent production, and competing priorities. Dispatching rules and I/O control are heavily used.
• Repetitive Manufacturing: PAC focuses on rate-based scheduling and maintaining production rates rather than individual order tracking. Backflushing is commonly used for material and labor reporting.
• Flow/Process Manufacturing: PAC focuses on maintaining continuous flow, managing recipe/formula adjustments, and monitoring process parameters.
• Lean/JIT Environments: PAC is simplified through pull systems (kanban), level scheduling, and visual controls. The focus shifts from complex scheduling to eliminating waste and maintaining flow.


4. Exam Tips: Answering Questions on Production Activity Control (PAC)

The CPIM exam frequently tests PAC concepts within the Detailed Scheduling and Planning module. Here are targeted strategies for success:

Tip 1: Know the Components of Manufacturing Lead Time
Remember that queue time is the largest component of manufacturing lead time. If a question asks how to reduce lead time, reducing queue time offers the greatest opportunity. This is a very frequently tested concept.

Tip 2: Master the Critical Ratio Calculation
Be prepared to calculate Critical Ratio and interpret the result:
• CR = (Due Date – Today's Date) / (Remaining Lead Time)
• CR < 1.0 → Behind schedule (highest priority)
• CR = 1.0 → On schedule
• CR > 1.0 → Ahead of schedule (lower priority)
• CR ≤ 0 → Already past due (most critical)
Practice calculating CR for multiple jobs and ranking their priorities.

Tip 3: Understand Input/Output Control Deeply
This is one of the most heavily tested PAC topics. Remember:
• Controlling input is the key to controlling WIP and lead times
• Increasing input to an overloaded work center will NOT increase output—it will increase WIP and lead times
• Output is limited by capacity; input can be controlled by order release decisions
• Look for questions that test the relationship between input rate, output rate, and WIP levels

Tip 4: Know the Difference Between Overlapping, Splitting, and Lot Splitting
These are commonly tested and easily confused:
• Overlapping: Send part of a lot to the NEXT operation while the current operation continues (reduces interoperation time)
• Operation Splitting: Run the SAME operation on MULTIPLE machines simultaneously (reduces run time for that operation)
• Lot Splitting: Divide the lot into sublots that proceed independently through all remaining operations

Tip 5: Understand Forward vs. Backward Scheduling
Be able to identify which technique is being described in a scenario. Backward scheduling is the default approach for MRP. Forward scheduling is used when the order is already late or to determine the earliest possible completion date.

Tip 6: Know the Dispatching Rules and Their Characteristics
• SPT minimizes average flow time and average number of jobs in the system but may starve long jobs
• EDD minimizes maximum tardiness
• CR is dynamic and adjusts as time passes
• FCFS is the simplest but often the least effective for meeting due dates

Tip 7: Understand the Order Review/Release Gateway
Questions may test the concept that orders should NOT be released to the shop floor unless materials, tooling, and capacity are available. Releasing orders prematurely increases WIP, extends lead times, and creates confusion on the shop floor.

Tip 8: Connect PAC to Other Planning Levels
Understand where PAC fits in the planning hierarchy:
• PAC receives planned orders from MRP
• PAC provides feedback to MRP and CRP on actual performance
• PAC implements the priorities established by MPS and MRP
• I/O control at the PAC level validates the capacity plans from CRP

Tip 9: Watch for Trick Questions on Efficiency vs. Priority
A common exam trap involves scenarios where running a job efficiently (e.g., longer runs, fewer setups) conflicts with meeting priority/due date requirements. In PAC, priority should generally take precedence over efficiency, because the primary goal is to meet customer delivery dates as planned by MPS and MRP.

Tip 10: Review the Supplier Control Side of PAC
Don't forget that PAC includes supplier control. Be familiar with:
• Supplier scheduling and communication
• Monitoring supplier delivery performance
• Expediting and de-expediting supplier orders
• The role of purchase order tracking in supporting the MRP plan

Tip 11: Practice with Scenarios
Many PAC questions are scenario-based. Read the entire question carefully, identify what is being asked (priority ranking? lead time reduction technique? I/O control interpretation?), and eliminate answer choices that don't align with PAC principles. When in doubt, remember the core objectives: meet due dates, control WIP, and provide accurate feedback to planning systems.

Tip 12: Remember Key Metrics
Be familiar with how PAC performance is measured:
• Schedule performance: Percentage of orders completed on time
• Lead time analysis: Actual vs. planned lead times
• WIP levels: Actual vs. planned
• Utilization and efficiency: Actual output vs. capacity
• Throughput: Volume of production through a work center or the entire facility


Summary

Production Activity Control is where manufacturing plans become reality. It encompasses order release, detailed scheduling, dispatching, I/O control, and data collection/feedback. For the CPIM exam, focus on understanding the relationships between input, output, WIP, and lead time; master the priority rules and calculation methods (especially Critical Ratio); and know the techniques for managing lead time (overlapping, splitting). Always remember that PAC's primary role is to execute the plans established by MPS and MRP while providing essential feedback for continuous improvement of the planning process.