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Differences between Project Management and  Production Planning

 

The planning of production is a complex task. Ideally we can say that there are two opposite situations:

The Project Management (Engineering to Order) and Production Planning (Make to Stock)

Project Management is the choice when  each client order its product. Tipically It is not possible to make again the same product in the future. The aim is to satisfy as much as possible clients needs.

Production Plannin is the choice when the product to be made is always the same, for all clients. Tipically it is not possible to change product features to satisfy clients. The aim is to maximize as much as possible Production efficiencies.

In reality between those 2 extreme situations, there are other solutions:

-Make to Stock or (Project Management), the extreme discussed above;

-Make to Order, when we wait for customer orders, but we know in advance products to be made. Customer can choose between a catalogue of products.

- Assembly To Order, when the products is assembled from components and components are made in advance respect to client order. In this manner it is possible to allow the clients to select between the available components. It is possible to maximize the efficiency in components production.

-Make to Stock (Production Planning), the other extreme discussed above.

 

In the following table a comparison of the 2 methods is shown.