Process planning and scheduling are two important components of a manufacturing setup. It is important to integrate them to achieve better global optimality and improved system performance. To find optimal solutions for integrated process planning and scheduling (IPPS) problem, numerous algorithm-based approaches exist. Most of these approaches try to use existing meta-heuristic algorithms for solving the IPPS problem. Although these approaches have been shown to be effective in optimizing the IPPS problem, there is still room for improvement in terms of quality of solution and algorithm efficiency, especially for more complicated problems. Dispatching rules have been successfully utilized for solving complicated scheduling problems, but haven’t been considered extensively for the IPPS problem. This approach incorporates dispatching rules with the concept of prioritizing jobs, in an algorithm called priority-based heuristic algorithm (PBHA). PBHA tries to establish job and machine priority for selecting operations. Priority assignment and a set of dispatching rules are simultaneously used to generate both the process plans and schedules for all jobs and machines. The algorithm was tested for a series of benchmark problems. The proposed algorithm was able to achieve superior results for most complex problems presented in recent literature while utilizing lesser computational resources.