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Production Planning in Manufacturing: Best Practices for Production Plans
As the creation of products and services has become more extensive and varied, the manufacturing industry has become more competitive. There are many things to keep an eye on such as material requirements planning, supply chain management and inventory control. Operations continue to become more complex, and this means manufacturing companies require more thorough production planning.
A production plan is the best way to guarantee you deliver high-quality products/services as efficiently as possible.
What Is Production Planning?
Production planning is the process of deciding how a product or service will be manufactured before the manufacturing process begins. In other words, it is how you plan to manage your supply chain, raw materials, employees and the physical space where the manufacturing process takes place.
Production planning is very important for manufacturers as it affects other important aspects of their business such as:
- Supply chain management
- Production scheduling
- Material requirements planning
- Production lead time
- Capacity planning
ProjectManager is a project management software that helps manufacturers cover every aspect of production planning. Plan with Gantt charts, execute with kanban boards and manage your resources along the way. No other software offers sophisticated project and resource management features in one intuitive package. Get started today for free.
Why Is Production Planning Important?
If a manufacturing operation wishes to expand, that evolution demands careful production planning and production scheduling. Someone must take on the responsibility of managing resources and deciding how they will be allocated. This process is a big part of capacity planning —how much can be made in a certain period of time, with the available resources?
Without production planning, it is easy to use too much of a resource for one product and not leave enough for another, or fail to schedule your resources properly, which results in delays that affect your overall production management process. It’s just as easy to let resources go to waste. These issues indicate a lack of efficiency in your production planning process.
No matter the product or service or the size of the operation, production planning is the best way to ensure resources are used appropriately, products and services are high-quality and nothing goes over budget .
Types of Production Planning
Every operation is unique, and the same production plan isn’t right for everyone. In order to get the most from project planning, you need to decide which method is best for your manufacturing process. That said, here’s a quick intro to the different types of production planning.
The job method is often used when manufacturing a single product, for which a unique production plan is created. This production planning method is generally used in smaller-scale productions, but it can also be applied to larger manufacturing facilities. The job method is especially advantageous when a product or service requires specific customizations.
Batch Production Method
Batch production consists in manufacturing goods in groups, instead of being produced individually or through continuous production. This method is useful when manufacturing products on a large scale.
The flow method is a demand-based manufacturing model that minimizes the production lead time by speeding up the production line. The manufacturing process starts based on work orders, and once it starts, it doesn’t stop until all finished goods are produced. This is called continuous production and it’s achieved by using machinery and little intervention to minimize waiting time.
The process method is more or less what most people picture when they think about production—an assembly line. With the process method, there will generally be different types of machinery completing separate tasks to put together the finished goods.
Related: 10 Free Manufacturing Templates for Excel
Mass Production Method
The mass production method is primarily focused on creating a continuous flow of identical products. It’s similar to the flow method, but at a much bigger scale, which cuts production costs. When uniformity is just as critical as efficiency, you need to use “standardized processes” to guarantee all products look exactly the same.
What Is a Production Plan?
A production plan is a document that describes how production processes will be executed, and it’s the final outcome of the production planning process. It describes the human resources, raw materials and equipment that will be needed and the production schedule that will be followed.
The person responsible for production planning must also be very familiar with the operation’s inner workings, resources and the products/services they produce. This usually entails collaborating with people on the floor, in the field or in different departments to create products and deliver services.
How to Make a Production Plan
When you set out to create a production plan, make sure to follow these 5 steps to make it as robust as possible.
1. Estimate/Forecast Product Demand
Understanding product demand planning is the best way to decide which product planning method is the best choice for your operation. From here, you’ll be able to estimate which resources are required and how they’ll be used in the manufacturing process.
2. Access Inventory
Accessing inventory is about more than simply taking stock: you should make an inventory management plan so that you don’t experience shortages or let things go to waste. For this step, focus on the inventory control and inventory management techniques you can use to handle inventory in the most efficient way possible.
3. Resource Planning
A successful production plan requires you to be familiar with the resource planning details of the manufacturing process. Note the minimum number of people and raw material requirements necessary to create a product or execute a service. You need to also consider what machines and systems are essential for executing your production plan.
Related: Free Resource Plan Template for Excel
4. Production control
As production takes place, monitor how the results compare to the production schedule and resource management projections. This is something that should continually take place and be documented during the production process. Production control is especially important for the fifth step in the production planning process.
5. Adjust the Plan to Make Production More Efficient in the Future
The final step of production planning is to reflect on the information you gained in step four and strategize what can be done to make the production plan run more smoothly in the future. Production planning is about manufacturing a product or service, yes, but it should also be a learning experience for creating even better production plans for next time.
Common Production Planning Mistakes
As you go through the production planning process, you must stay vigilant of common missteps. Here are three mistakes often made during production planning. Luckily, they can be prevented.
Not Expecting the Unexpected
This means having risk management strategies in place if things go awry. The goal is to never have to employ them, of course, but it’s better to have them and not need them. Production planning is not complete if it doesn’t anticipate risks, issues and changes. When you plan for them, you’re ready to problem solve if and when they happen.
Getting Stuck Behind the Desk
You should work with intelligent production planning tools, but that doesn’t mean you should only rely on an enterprise resource planning software for production planning and not oversee resources and operations in person. When production planning is only done from behind a screen, the end result will not be as informed as it could be. The best production planning is active and collaborative.
Regardless of the product or service, manufacturing means using tech. In order to get the most from your equipment, you need to take care of it. This means tracking usage and keeping up with regular maintenance. This looks different depending on the industry and product or service, but the principle is the same: continually take care of your equipment before it becomes a problem that will slow down production.
Production Planning Best Practices
No matter what product or service is being manufactured, there are many tried-and-true best practices that set your operation up for success. When creating a production plan, keep these two in mind.
Make Accurate Forecasts
When you don’t properly estimate the demand for your product or service, it is impossible to create a detailed production plan. Demand planning is never static. You need to consider buying trends from previous years, changes in demographics, changes in resource availability and many other factors. These demand planning forecasts are the foundation of skillful production planning.
Know Your Capacity
Capacity planning means knowing the maximum capacity your operation can manage—the absolute most of a product or service it can offer during a period of time. This is the only way to anticipate how much of each resource you will need in order to create X amount of products. When you don’t know the production capacity, your production planning is like taking a shot in the dark.
Use ProjectManager for Production Planning and Scheduling
As the nature of manufacturing goods and services changes, you need modern tools to plan production and make schedules. ProjectManager is an award-winning project management software that offers all the tools you need for excellent production planning and scheduling. With it, you can plan projects, create schedules, manage resources and track changes with one tool.
Plan with Gantt Charts
Manage your product manufacturing across a timeline with our Gantt chart view. With it, you can view your resources to help you track your cost of production to make sure you’re never overspending. You can then link any dependent tasks to avoid bottlenecks in your manufacturing.
Get a Birds-Eye-View
To keep your production plan on track, you need to have a high-level view so that you can pinpoint setbacks before or as they occur. Our real-time dashboard collects your data and converts it into colorful graphs and charts that give you at-a-glance analytics.
Easily Measure and Report Your Progress
Any operation will have stakeholders, and they want to be kept in the loop. ProjectManager’s project status reports make it easy to share key data points. They can be generated in a single click, making it simple to generate them before important meetings.
Related Production Planning Content
- Production vs. Manufacturing
- How to Make a Production Flow Chart for Manufacturing
- Production Schedule Template
- How to Create a Master Production Schedule (MPS)
Manage every detail of your operation with ProjectManager’s powerful cloud-based project management tools. Our suite of tools is trusted by tens of thousands of teams, from NASA to Volvo, to aid them in the planning, scheduling, tracking and reporting on the progress and performance of their production plans. Our software makes lets you get out from behind your desk and make adjustments on the go. Try it for yourself for free for 30 days!
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Production Planning in 5 Steps
Provided by the International Finance Corporation
Are you a manufacturing firm? If so, you will need a production plan to ensure that you have all the inputs for production ready at the right time to meet your product demand.
Production planning is “the administrative process that takes place within a manufacturing business and that involves making sure that sufficient raw materials, staff and other necessary items are procured and ready to create finished products according to the schedule specified”, as defined by the Business Dictionary.
A production plan serves as a guide for your company’s production activities. It establishes and sequences activities which must be carried out to achieve a production target, so that all staff involved are aware of who needs to do what, when, where and how.
A production plan will help you meet product demand while minimizing production time and cost by improving process flow, reducing the waiting time between operations, and optimizing use of plant, equipment and inventory. In order to do this, you must align your production plan to your business strategy and business plan, and support production planning by coordinating with other departments, such as procurement, finance and marketing.
The diagram above shows the production planning and control process divided in five steps:
- Step 1: forecast the demand of your product
- Step 2: determine potential options for production
- Step 3: choose the option for production that use the combination of resources more effectively
- Step 4: monitor and control
- Step 5: Adjust
STEP 1. Forecast the demand of your product
Estimate your demand, so that you know how many products you need to produce during a specific time period. You may have already some confirmed orders for the next couple of month, but on top of that, you need to predict how many more may come.
Different methods exist to forecast your product demand. A traditional technique to estimate product demand is based on historical information (e.g. orders placed by your customers in the past). While this is a very common method, you need to consider external and internal events in your business environment that could alter past patterns. For example, new market trends, a slowdown in the economy, or a new marketing campaign that could increase or decrease your product demand compared to what happened in the past.
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STEP 2. Determine potential options for production
Determine the different production options available to meet the forecasted demand of your product. For example, if you want to produce 100 shirts, you need to use a certain number of machines, human resources, materials, and time. Different combinations of these inputs can lead to different production times and costs.
a. Start by mapping all the steps of your production process. When doing so, take into account if tasks are sequenced or dependent on other tasks, or if they happen simultaneously or independently. Below is an example of how a simple process-mapping flowchart could look. Each box represents a task of your production process. The map of the production process will be different and unique to each company. Think about how to improve process flow by eliminating bottlenecks.
b. Determine the resources needed to complete each task involved in your production process.
Look at how different combination of resources lead to different production times and costs:
- Human Resources. Determine the number of staff that will be involved in each phase of the production process, their availability, and the cost. Make sure their time is well utilized.
- Machinery and Equipment. Identify the machines needed and their availability, including any maintenance or replacement that may be needed.
- Materials. Make a list of all the materials needed for production and how you obtain them. Assess the reliability of your suppliers, including delivery time. Having materials available when needed is crucial for the production process.
- Inventory. It is important that you consider how to optimize your inventory. Keeping a large inventory is expensive, but keeping a low inventory is risky if demand fluctuates on a regular basis. Having a good inventory control system in place can help your firm accommodate variations in demand and mitigate possible problems or delays that may occur during the production process. For more information about how to manage your inventory, check out the video.
STEP 3. Choose the option for production that uses the combination of resources more effectively
Compare the cost and time of each potential production option and choose the option that uses the most efficient combination of resources and that allows you to meet product demand. The chosen option should maximize the operational capacity of your firm.
Always make sure you can cover the costs involved in the production process (purchase of materials, office rent, payment of staff salary, leasing, etc.)
You need to share your production plan with all the departments and staff that contribute or interact with the production process, including human resources, procurement, finances, marketing, etc. If everybody knows what to do, and what materials and equipment should be used for each task of the production process, operations will be smoother.
STEP 4. Monitor and control
You want to ensure that your plan is working in the way it is intended. Monitoring and controlling is about comparing what is happening with what should be happening. Having a control system in place helps you detect problems as soon as they occur, allowing you more time to correct before it is too late.
STEP 5. Adjust
Be prepared to adjust the plan if needed. The production plan needs to be flexible to accommodate changes in customers’ demand (e.g. an important order that gets cancelled). Also, you need to take into account possible risks that may arise during the production process (e.g. a machine breaks, a worker gets sick or a supplier does not deliver on time) and have a risk mitigation plan.
Inventory is the value of materials and goods held by an organization (1) to support production (raw materials, subassemblies, work in process), (2) for support activities (repair, maintenance, consumables), or (3) for sale or customer service (merchandise, finished goods, spare parts), as defined by the Business Dictionary.
Inventory optimization is a method of balancing capital investment constraints or objectives and service-level goals over a large assortment of stock-keeping units while taking demand and supply volatility into account, as defined by Wikipedia
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The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC does not guarantee the accuracy, reliability or completeness of the content included in this work, or for the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon.
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Top 10 Production Schedule Templates with Samples And Examples [Free PDF Attached]
“Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused efforts,” Paul J. Meyer, the pioneer of the self-improvement industry, has enunciated.
It's possible that at some point, you may have come across someone asking these questions: “Is it important for an engineering manager to have a project schedule?” Or “Is a shooting schedule needed in a film or TV show plan?” Most will probably answer, “You must be kidding. A good schedule is a must-have."
A good schedule acts as a blueprint not only for a successful day-to-day life, but also for organizations and start-ups, helping managers keep tabs on tasks, processes, and more.
Are you eager to keep track of your tasks and priorities? Go through our exclusive weekly schedule PPT Template and manage your tasks with ease.
Production Schedule: An Overview
In any production and manufacturing unit, scheduling plays a crucial role. Production scheduling is the allocation of resources, operations, and processes required to create goods and services. It is an organized plan used in businesses to balance the needs of customers with available products.
Sometimes, production planning and production scheduling are used interchangeably. But, in business operations, planning and scheduling aren’t two peas in a pod. Planning deals with choosing the right procedures to furnish the goals of the project, scheduling assigns time, tasks, resources, and machinery to the objectives of your marketing plan.
Are you a project manager looking for a tool to take your production facility to the next level? Then check out our comprehensive blog on project schedule and take your first step towards better project execution.
Need to prioritize your projects? Explore our well-designed Top 10 Production Scheduling Example Templates with Samples and maintain a balance among the tasks that pertain to your production. Manage your production schedules and manufacturing tasks well with these customized production schedule templates, and keep track of day-to-day production-related activities with ease and confidence.
Let’s explore now!
Template 1: Work Plan Schedule Production Proposal Template
Clarify your business operations with the use of this production proposal PPT Template. Use this presentation template to schedule your strategic planning, production services, advertising campaign development, strategic partnership, and much more. Download it to create interactive slides with icons and bold colors to engage your audience.
Template 2: Market Activity Schedule Plan for Production Promotion PPT Slides
Are you worried about presenting a product promotion-related activity to your boss? This market activity schedule plan PowerPoint Template will do the needful. Showcase your promotion schedule plan by portraying the promotion’s ideas, description, objectives, and designated employees with estimated cost and budget.
Template 3: One-Pager Production Schedule Sheet Template
Bored of long and massive marketing plans? Use our one-pager production schedule sheet template and pitch your production report with precision. With this presentation template, cover your upcoming production plan for the manufacturing plant focusing on launching stock, sales forecast, quantity to produce, current status (in terms of order fulfilment and production cost), order status, and product categories sold. Optimize the production scheduling sheet and make your team members aware of the process and their own tasks.
Template 4: Production Schedule Order Amendment Presentation Slides
Manage your production needs with the help of this production schedule PowerPoint Template. It allows you to cover planning and allocation processes, and create a well-organized schedule for your company's functioning prerequisites (proper routing, dispatching, and follow-up). Deploy this template at the earliest to convey your plan, and increase your company’s profitability and productivity.
Template 5: One-Pager Production Schedule Sheet Template Fit for Army Standards
Do you feel preparing a One-Pager data sheet from scratch can be a mammoth task? Deploy our top-notch one-pager army production schedule sheet PPT Template to provide a comprehensive view of the product or service details. This template is divided into Sections: Introduction of your company and its achievements, client requirements, production cost details, production schedule, and project team management. Customize this A4-size template now and present your product details to potential clients.
Template 6: Industry Capability Analysis Current Production Schedule Template
Deploy this PowerPoint Template to accomplish industry capacity analysis, in terms of raw material production. This PPT Template is divided into four stages: Current production by the shop, overall equipment effectiveness, production status, and asset status. Keep a check on the equipment effectiveness using a pie chart. Why wait? Grab this template immediately to ramp up production to gain market share.
Template 7: Work Plan Schedule Analytics Advertising Design and Production Proposal
Are you looking for a way to get your work plan schedule analytics advertising design and production proposal done like clockwork? Look no further than our innovative new product! This template comes with everything you need to plan and schedule your advertising campaign, including an analytics tracker so you can measure your results. It's easy to use and edit, so you can tailor it to your specific needs.
Template 8: Production Schedule Maker PowerPoint Presentation Gallery Template
Use our top-class production schedule maker PPT Template that has four stages. It helps run your manufacturing process smoothly and deliver your products on time under a cost-effective budget. From content (data and statistics, image, text) to layout (font, color, icons), personalize this PPT Template. Without any delay, get started with this template now!
Template 9: Video Production Project Proposal One-Pager PowerPoint Slides
Do you need help presenting your video production project proposal? Use our video production project proposal one-pager Template and say goodbye to all the fuss and confusion. Highlight your project goals, production process, client statement, key deliverables, video package, and much more. Simply customize the presentation template design for a more personalized look, fill in the details and impress clients.
Template 10: Plan of Action for Media Digitalization Production Schedule One-Pager
Looking to develop a production plan for your next idea or project but don’t know where to start? Set a benchmark with our action plan for media digitalization production schedule PPT Template. This one-pager Template offers high-quality visuals and focuses on the scene, location, date, time, cost, equipment, etc. Say no to delays and download this one-pager PPT Template to revitalize you project.
Production Schedule: A Blueprint!
A production schedule is a framework for allocating resources and listing the products that will be manufactured on a timescale. Though, it is a tricky process, SlideTeam offers the Top 10 Production Schedule Templates which will help you create a production schedule in a jiffy. You are just a click away from downloading these actionable slides. Get these Templates now!
PS: Now you have a handy production schedule template by your side, do you want to lay the groundwork for a successful video production business? Peruse our well-designed blog templates and invest your time in creating a comprehensive video production proposal.
FAQs on Production Schedule
What do you mean by production scheduling.
Production scheduling is a versatile document for planning, forecasting, and meeting demands. It is deployed in a manufacturing company to manage and control the execution of the production process. Generally, it describes how to use the manufacturing unit’s resources to satisfy a production plan, or how machines should be used by the company to manufacture products within a time frame. It is essentially the timetable that governs a business’s functioning. Over time, boundaries have blurred between production and services, hence, a production schedule has come to refer to specific business activities as well.
What are the main components of production scheduling?
If you want to formalize your production scheduling process, follow these six components:
- Planning: First, prepare your demand plan. There are two types of planning offered- static or dynamic, to collect and analyze available resources, budgets, timelines, and staff availability.
- Routing: The next step is to identify the place from where you will procure youe raw materials, and how to deliver these to the manufacturing team. Mainly, it focuses on the most cost-effective route.
- Scheduling: After routing, develop a schedule to define how you will meet all requirements, say, contingency plans. During this process, you can create a master schedule, manufacturing schedule, etc.
- Dispatching: It issues orders and instructions on how goods and people will move around from one place to another throughout the production schedule process.
- Execution: This is the final and most important step of the entire production schedule process. Here, you put your plan into action.
- Maintenance: Keep your schedule up-to-date because demand may keep fluctuating throughout the production process.
Production scheduling is a very important process for a manufacturing unit. It So, it should includes the following elements:
1. The most important factor is the product inventory, which lists all the manufactured products.
2. Later on, a variation sub-list (size, color, type) should be included.
3. Don't forget to mention the demand and delivery dates of the products.
4. Lastly, production quantities, say, the number of units you will produce each week are a must.
What to include in your production scheduling?
Production scheduling is a very important process for a manufacturing unit. It includes the following elements:
- The most important factor is the product inventory, which lists all manufactured products.
- Later on, a variation sub-list (size, color, type) should be included.
- Don’t forget to mention the demand and delivery dates of the products.
- Lastly, production quantities , say, the number of units you will produce each week are a must.
How to optimize your production scheduling?
To optimize your production scheduling, here are some strategies that you can implement:
- Improve the prediction accuracy of your market expectation. For this, you have to estimate accurate insights into the production, inventory, and selling of goods.
- Another important step is to standardize your production scheduling. It starts with process mapping to create an alignment between demand expectations and capacity utilization.
- To create solid production plans, use any tweaks and adjustments, say, digital twins, to visualize the efficiency of expected results.
- If you don’t want any delay in the production process, integrate your supply chains. You can integrate IT ecosystems with the supplier’s ecosystems, so that data can be shared in time.
- Get transparency in transport times, parts availability, etc and adjust your production schedules to keep things moving without worrying about unexpected events.
Download the free Production Schedule Templates PDF .
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Production planning and scheduling for manufacturing
Production planning and scheduling is essential to increase your manufacturing efficiency. Adjust your production schedule based on inventory, resources, and orders. Learn how with Katana.
Production scheduling is essential for growing manufacturing operations to take their production to the next level. If you’re looking to maximize efficiency on your shop floor, you need a way to optimize your production planning and scheduling.
Nowadays, your scaling manufacturing business has many options for finding production planning software explicitly crafted for manufacturers.
This guide will provide you with a comprehensive understanding of manufacturing scheduling and how it can help you allocate your resources efficiently and cost-effectively to meet customer orders. So, read on to learn how to improve production scheduling in your scaling manufacturing business.
Table of contents:
- What’s the difference between production planning and scheduling?
The importance of production planning and scheduling
5 stages of production planning and scheduling.
- Download production schedule template
A simple production plan example
The key factors to consider when scheduling production.
- Production Planning KPIs
How to optimize production scheduling
Production planning and scheduling mistakes, can you use excel for production planning, production planning and scheduling with katana, what’s the difference between planning and scheduling.
Production planning and scheduling are two key activities in manufacturing and operations management. Although closely related, they involve different aspects of the production process. Let’s take a closer look at the difference between these two concepts.
What is production planning?
Production planning is an important process that involves strategic decision-making to determine the optimal production strategy, resource allocation, and scheduling to meet customer demand and organizational objectives. It encompasses a comprehensive analysis of what products should be produced, in what quantities, and when.
By considering market demand, sales forecasts, and internal capabilities, production planning ensures efficient utilization of resources while maintaining a competitive edge in the market. This process plays a vital role in aligning the overall business strategy with the operational aspects of production, enabling companies to meet customer expectations, maximize productivity, and achieve their desired outcomes.
The main objectives of production planning include:
- Forecasting customer demand and market trends
- Setting production goals and objectives
- Determining the types and quantities of products to be produced
- Identifying the necessary resources (materials, equipment, labor, etc.)
- Allocating resources efficiently
- Developing manufacturing schedules and timelines
What is production scheduling?
Production scheduling is a vital process that entails the creation of a comprehensive and detailed timetable outlining the specific order and timing of production activities. It involves making critical decisions on when each task or operation should commence and conclude, taking into account resource availability, constraints, and dependencies.
By considering factors such as machine availability, labor capacity, and material availability, production scheduling aims to optimize efficiency and streamline workflow.
This process ensures that production tasks are executed in a coordinated manner, minimizing idle time, maximizing resource utilization, and ultimately facilitating the timely delivery of products.
Effective manufacturing scheduling plays a pivotal role in enhancing productivity, reducing costs, and maintaining a smooth and well-organized production process.
The primary objectives of production scheduling include:
- Sequencing the order of production tasks
- Assigning resources (equipment, labor, etc.) to specific tasks
- Minimizing idle time and maximizing resource utilization
- Adapting to changes in customer demand or unforeseen disruptions
- Ensuring timely delivery of products
In summary, production planning focuses on the big picture and long-term decisions to ensure that production activities align with the overall business strategy and customer demand. On the other hand, production scheduling focuses on short-term decisions that aim to optimize efficiency, minimize costs, and maintain a smooth workflow within the production process.
Both planning and scheduling are essential for effective production management and meeting customer demands efficiently.
Simplify production planning with Katana
Production planning and scheduling are crucial aspects of a business’ operations and have significant importance for several reasons:
- Meeting customer demands — Effective manufacturing planning and scheduling ensure timely delivery of products in the required quantities, avoiding stockouts , minimizing lead times, and enhancing customer satisfaction.
- Optimal resource utilization — Proper planning and scheduling enable businesses to allocate resources efficiently, minimizing idle time, reducing costs, and maximizing productivity, leading to improved operational efficiency and resource utilization.
- Cost control — Accurate demand forecasting and efficient scheduling help avoid overproduction, minimize inventory holding costs, reduce setup times, eliminate bottlenecks, and optimize resource use, contributing to cost savings.
- Improved production efficiency — Effective planning streamlines production processes, eliminates inefficiencies, and reduces waste, optimizing production flow, reducing cycle times, and increasing overall efficiency.
- Timely decision-making — Well-defined plans facilitate informed decisions on resource allocation, production priorities, and capacity management, enabling adaptation to changes and ensuring timely production.
- Coordination and collaboration — Manufacturing planning and scheduling involve cooperation between departments, enhancing communication, improving coordination, and achieving a synchronized production process, reducing delays and enhancing operational efficiency.
- Scalability and growth — Well-designed production plans and schedules lay the foundation for handling increased demand, expanding operations, and adapting to market conditions. This helps to facilitate scalability and capitalizing on growth opportunities.
- Continuous improvement — Monitoring production performance, analyzing data, and evaluating schedules help identify areas for improvement, driving continuous optimization and maintaining a competitive edge.
So, if you want to ensure timely delivery, optimal resource utilization, cost control, improved efficiency, and scalability, you need to have a solid production plan.
Production planning and scheduling involve a systematic approach to ensure efficient and timely production of goods. The best way to achieve this is by dividing the process into four distinct stages, each serving a specific purpose.
These stages provide a structured framework for organizations to plan, schedule, and control their production processes effectively. Let’s explore each stage in detail.
1. Demand forecasting and capacity planning
The first production planning and scheduling stage involves demand forecasting and capacity planning.
Demand forecasting entails estimating future customer demand based on historical data, market trends, and other relevant factors. It helps organizations determine the expected demand volume and patterns for their products.
To forecast demand, you need to incorporate a variety of data, including:
- Historical sales performance
- Local and national taxes and regulations
- Current manufacturing trends and predictions
- Technological advancements
Learning and understanding your product demand will help you make the best choices when arranging and improving your operations.
Once the demand is forecasted, capacity planning comes into play.
It involves evaluating the production capacity and capabilities of the organization to determine if it can meet the projected demand. Factors such as workforce availability, equipment capacity, and facility constraints are taken into account during this stage.
The goal is to align the production capacity with the anticipated demand to avoid underutilization or overburdening of resources.
2. Material planning and procurement
The second stage focuses on inventory control , including material planning and procurement. In this stage, organizations identify the raw materials, components, and resources required for production. The quantities needed are determined based on the manufacturing schedule and demand forecast.
Efficient material planning ensures the timely availability of materials while minimizing inventory costs and the risk of shortages or excess stock.
Establishing strong supplier relationships is essential during this stage to ensure a reliable supply chain. Organizations collaborate with suppliers to coordinate delivery schedules, negotiate pricing, and maintain consistent quality standards.
Effective material planning and procurement help optimize production flow and prevent disruptions in the supply chain.
3. Scheduling and resource allocation
The third stage involves detailed scheduling and resource allocation. It focuses on creating a comprehensive production timeline and sequence of activities to ensure smooth operations.
Scheduling involves assigning tasks to different workstations or production lines, considering factors such as equipment availability, setup times, and dependencies between jobs.
Resource allocation is another crucial aspect of this stage. It entails determining the optimal allocation of labor, equipment, and other resources to specific production tasks. Balancing workloads, considering skill levels, and maximizing resource utilization are key considerations during resource allocation.
The goal is to create an efficient schedule that minimizes idle time, bottlenecks, and unnecessary delays.
4. Production control and monitoring
The fourth stage revolves around production control and monitoring. Once production is underway, it is essential to track work progress, ensure adherence to the planned schedule, and maintain quality standards. Production control is all about monitoring the production process, identifying deviations or bottlenecks, and taking corrective actions as necessary.
Efficient production control relies on real-time data collection, performance measurement, and analysis. It enables organizations to identify issues, make adjustments, and optimize the production flow. This stage also includes quality control measures to ensure the final output meets the required standards and customer expectations.
5. Master production schedules
Once your manufacturing plan looks achievable, you can progress to the next step, producing a master production schedule , the ultimate document for production.
Your master production schedule (MPS) will detail how many items need to be produced within a certain period. Most manufacturers use manufacturing technology to create an MPS that will provide real-time data and allow manufacturers to make production changes on the fly.
By effectively controlling and monitoring the production process, organizations can improve productivity, minimize waste, and ensure timely delivery of products to customers.
Imagine a small but modest workshop with five artisans making psychedelic T-shirts.
Each artisan works eight hours a day, from Monday to Friday. They follow a make-to-stock workflow in a job shop setting. It takes 2 hours to produce a single T-shirt.
The max capacity of this Funkadelic business is 200 hours .
In this scenario, the annual hippie fest is fast approaching — and looking at your historical data collection — the T-shirt makers expect to see a surge in sales. Last year they were overwhelmed, so this year, they have decided to put together a quick manufacturing plan a week before they expect an increase in demand. They also want to have a safety stock level of ten for each of their items.
As per their initial plan, they won’t be able to meet production requirements, but they can now use this knowledge to readjust their current production plan. They decide to limit the production of Far Out T-shirts to 40 and Peace T-shirts to 8 .
They can still meet the forecasted demand with the modified plan by sacrificing some of the safety stock.
However, this plan put their operations and resources at 100% capacity . If one of the artisans calls in sick on Wednesday evening, the max capacity for the week falls to 176 hours . When planning production, a rule of thumb is to have 20% free to give yourself wiggle room if a problem occurs.
Production planning is vital for any manufacturing business. Even basic products need a clear and defined flow to turn them from raw materials into quality goods. If you don’t follow this flow or your production quality control checklist , your products will surely drop in quality. Without a proper process, your standardized practices will be forgotten.
So, when scheduling the production, what are the key factors to consider?
Use your team well.
Your people are a valuable asset to your business. They play a key part in manufacturing process optimization. Make it your business to know your people, including their strengths and weaknesses. This way, you can assign each team member to the most suitable tasks and machines.
If someone is sick or goes on holiday, you have the additional capacity to make up for the temporary loss.
Effective production planning allows you to get the most out of your people and machines. Every team member knows the tasks assigned to them and what their expected output is. Keeping tabs on this process lets you compensate for shortfalls and keep up with high demand.
Running at capacity
Is your workshop constantly running at 100% of its output?
It only takes a minor bump to bring things to a grinding halt. Capacity planning helps to make sure you’re not running at max capacity. If you do receive an unusually large order or two, you will be glad you prepared.
The same goes for your team, as they have enough resources to do their job on time.
Frequent stalls in production planning mean paying team members and machines to stand by.
Integrating a robust MRP or manufacturing ERP software into your business can help ensure you always have the required raw materials available. This means:
- You never have to push back production because of supply order delays or stockouts.
- Priority deadlines do not have to be set back due to undersupply.
- There’s no need to constantly step over excess raw materials on your shop floor.
If done right, warehousing and transport costs won’t skyrocket due to oversupply. As a bonus, every team member always has something to do as they work with your available materials.
The logistical flow of each part of your manufacturing process also requires consideration. This may not seem so important, but you would be surprised. Many production lines have come grinding to a halt as one weak link has been placed on the wrong stage.
Pushing machines and people to unsuitable locations can harm efficiency.
Sometimes, what seems like common sense could be harmful to your flow. It takes careful analysis to determine how materials, resources, people, and supplies travel around your shop floor.
It may be that a more efficient layout or order exists for your business. Sometimes a small change can make a world of difference to your production schedule.
Trial-and-error problem-solving costs your business money through each failed attempt.
Overordering or overproducing is a band-aid solution, as this leads to extra costs or staff burnout. You need effective production planning software to track your flow and find manufacturing scheduling issues to get to the root of a problem.
Know your manufacturing processes
Understanding manufacturing planning and scheduling allow you to oversee your manufacturing methodically to overcome production issues easily.
Track and manage everything effectively, and everything should run like clockwork. Effective manufacturing scheduling makes it easier to do everything by the book — it is set out clearly for your whole team and is available 24/7.
Production planning KPIs
Now you know everything there is to know about putting together your production plan — the next step is understanding how to measure its effectiveness. Here are some KPIs to track to get you started:
- Manufacturing costs — Track how much it costs to produce an item by looking into raw materials, utilities, salaries, rent, etc.
- Capacity utilization rate — You don’t want resources running at max capacity, but you don’t want machinery or workstations sitting idle.
- Planned production vs. actual hours — This will help you better understand how long it takes to produce an item or uncover any issues which lead to delays on your shop floor.
- Employee utilization (productivity) — The same as your capacity rate. The only difference is that you don’t want to overwork them. Make sure you schedule your human resources reasonably to void burnout.
- Takt time — A lean manufacturing concept that looks into the actual time it takes to produce a single unit of item.
This checklist will guide you in creating your business analytics to observe your production and develop plans to make them even more efficient.
But, as you can tell, doing this is a long and arduous process, and many scaling manufacturers turn to automation to help them with this task.
Optimizing production scheduling involves maximizing efficiency, minimizing costs, and ensuring timely delivery of products. Below you’ll find some strategies for optimizing manufacturing scheduling.
Incorporate demand-driven scheduling by aligning manufacturing schedules with customer demand. Use accurate demand forecasting to determine the required production volume and adjust schedules accordingly. This approach helps avoid overproduction or underproduction and reduces excess inventory or stockouts.
Utilize advanced scheduling techniques
Employ advanced scheduling techniques such as finite capacity scheduling, just-in-time (JIT) scheduling, or theory of constraints (TOC) to optimize production schedules. These techniques consider capacity constraints, setup times, and dependencies between tasks to create efficient and realistic schedules.
Optimize resource allocation
Ensure optimal utilization of resources by assigning tasks based on skill levels, availability, and efficiency. Consider the capabilities and capacities of equipment, machinery, and workforce while allocating resources. Efficient resource allocation minimizes idle time, reduces bottlenecks, and improves overall productivity.
Minimize changeovers and setup times
Reduce changeover and setup times by implementing strategies like single-minute exchange of die (SMED). Streamlining changeover processes allows faster transitions between different product configurations, enabling shorter production runs and increased flexibility.
Implement real-time monitoring
Utilize real-time monitoring systems and production control tools to track progress, identify bottlenecks, and make data-driven decisions. Real-time data provides insights into the actual status of production, enabling prompt adjustments and proactive problem-solving.
Prioritize critical tasks
Identify critical tasks or processes that significantly impact the overall production timeline. Prioritize these and allocate resources accordingly to ensure timely completion. Focusing on critical tasks minimizes the risk of delays in the entire production process.
Consider production constraints
Take into account any constraints that may affect production scheduling, such as limited capacity, equipment maintenance schedules, or supplier lead times. By incorporating these constraints into the scheduling process, you can avoid scheduling conflicts and optimize production flow.
Implement lean manufacturing principles
Apply lean manufacturing principles such as just-in-time production , continuous flow, and waste reduction techniques to optimize production scheduling. Eliminate non-value-added activities, reduce inventory, and optimize process flows to improve overall efficiency.
Utilize production scheduling software or manufacturing execution systems (MES) with advanced planning and scheduling capabilities. These tools automate the scheduling process, optimize resource allocation, and provide real-time visibility into production activities, enabling better decision-making and scheduling optimization.
Foster a culture of continuous improvement by regularly reviewing and analyzing production schedules, performance metrics, and feedback. Identify areas for improvement, implement changes, and monitor the impact of these adjustments. Continuously striving for optimization ensures ongoing efficiency gains in production scheduling.
By implementing these strategies, organizations can optimize their production scheduling processes, enhance operational efficiency, minimize costs, and deliver products on time, ultimately improving customer satisfaction and competitiveness.
Production planning and scheduling mistakes can lead to inefficiencies, delays, increased costs, and customer dissatisfaction. Let’s review some common mistakes to avoid in manufacturing planning and scheduling.
Inaccurate demand forecasting
Failing to accurately forecast customer demand can result in overproduction or underproduction. Overproduction leads to excess inventory and increased carrying costs , while underproduction can result in stockouts and missed sales opportunities. It is important to gather and analyze relevant data, consider market trends, and collaborate with sales and marketing teams to improve demand forecasting accuracy.
Insufficient capacity planning
Inadequate evaluation of production capacity can lead to resource constraints and bottlenecks. If the production capacity does not align with the forecasted demand, it can result in missed deadlines, backlogs, and delays in fulfilling customer orders. Conducting regular capacity assessments and considering factors such as equipment maintenance, workforce availability, and facility constraints are essential for effective manufacturing capacity planning .
Poor material planning
Inaccurate material planning can cause disruptions in the production process. Insufficient stock of raw materials or components can halt production, while excessive inventory ties up capital and increases storage costs. Utilizing efficient inventory management systems, establishing reliable supplier relationships, and continuously monitoring material requirements are crucial to avoid material planning errors.
Inefficient scheduling can lead to production issues, increased setup times, and idle resources. Poor task sequencing, inadequate consideration of setup times, and neglecting resource availability can result in unnecessary delays and production bottlenecks. Utilizing advanced scheduling techniques, considering the dependencies between tasks, and optimizing resource allocation is vital for efficient scheduling.
Lack of flexibility
Failure to incorporate flexibility in manufacturing planning and scheduling can make it challenging to adapt to unforeseen events or changes in demand. Market fluctuations, machine breakdowns, and supplier delays can disrupt the planned schedule. It is important to build contingency plans, have backup suppliers, and maintain buffer capacity to accommodate unexpected disruptions and maintain operational continuity.
Ignoring feedback and continuous improvement
Neglecting to gather feedback from the production floor, customer feedback, and performance metrics can hinder process improvement.
Regularly reviewing production performance, analyzing data, and actively seeking feedback from relevant stakeholders can help identify areas for improvement and drive continuous optimization in production planning and scheduling.
Lack of communication and collaboration
Poor communication and collaboration among departments can lead to misalignment and delays. Production planning and scheduling require coordination among different teams, including sales, operations, procurement, and logistics.
Clear communication channels, regular cross-functional meetings, and shared visibility of information are essential for effective collaboration and synchronization of activities.
By avoiding these common production planning and scheduling mistakes and adopting best practices, organizations can enhance their operational efficiency, minimize costs, and improve customer satisfaction by consistently delivering products on time and as per requirements.
The absence of affordable production planning software has led to many manufacturers using inefficient spreadsheets .
There are three main problems with this approach:
- Spreadsheets are slow — It may be better than doing it with a pen and paper, but Excel is still too labor-intensive.
- Spreadsheets are error-prone — They are vulnerable to mistakes that cause confusion, production delays, and business-disrupting problems.
- Spreadsheets are static — They do not update automatically. This can lead to delays as changes are not communicated.
Many modern manufacturers are stuck with Excel because they can’t see better options.
This is understandable. Most manufacturers do not need the gargantuan flow diagrams and Gantt charts seen in large enterprise software. Shop-bought software like Excel seems like a quick and easy option.
But it is not powerful enough for using production management effectively.
The best way to avoid production planning mistakes and implement different optimization techniques is through software. Katana is a cloud manufacturing platform that allows you to do all that and more. It offers advanced features with an intuitive interface, so you don’t need a 3-month boot camp to start using it.
Let’s have a look at what production planning with Katana looks like.
The Production operations tab lets you do production planning as it automatically assigns team members and workstations to each process your manufacturing orders require. It also calculates all the resources needed and associated costs.
The Make screen lets you review all outstanding manufacturing tasks. If something comes up, or you want to change tack, simply reorganize your manufacturing queue, and Katana’s real-time master planner reallocates all resources to ensure the prioritized orders get out of the door first.
Production planning with Katana allows you to:
- Keep up with demand, and prepare for change
- Prevent idle time in your workshop
- Significantly reduce scheduling errors
- Generate accurate, realistic deadlines
- Minimize inventory transport and storage costs
- Identify inefficiencies that could lead to production bottlenecks
- Gets products out the door and to customers on time
Take control of your production processes with Katana. Sign up for a 14-day free trial and see how it can streamline your business.
Senior Content Manager
James Humphreys has a background in creative writing and has been writing about the manufacturing industry for 3+ years.
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PRODUCTION PLANNING AND SCHEDULING
Production planning is the function of establishing an overall level of output, called the production plan. The process also includes any other activities needed to satisfy current planned levels of sales, while meeting the firm's general objectives regarding profit, productivity, lead times, and customer satisfaction, as expressed in the overall business plan. The managerial objective of production planning is to develop an integrated game plan where the operations portion is the production plan. This production plan, then, should link the firm's strategic goals to operations (the production function) as well as coordinating operations with sales objectives, resource availability, and financial budgets.
The production-planning process requires the comparison of sales requirements and production capabilities and the inclusion of budgets, pro forma financial statements, and supporting plans for materials and workforce requirements, as well as the production plan itself. A primary purpose of the production plan is to establish production rates that will achieve management's objective of satisfying customer demand. Demand satisfaction could be accomplished through the maintaining, raising, or lowering of inventories or backlogs, while keeping the workforce relatively stable. If the firm has implemented a just-in-time philosophy, the firm would utilize a chase strategy, which would mean satisfying customer demand while keeping inventories at a minimum level.
The term production planning is really too limiting since the intent is not to purely produce a plan for the operations function. Because the plan affects many firm functions, it is normally prepared with information from marketing and coordinated with the functions of manufacturing, engineering, finance, materials, and so on. Another term, sales and operations planning, has recently come into use, more accurately representing the concern with coordinating several critical activities within the firm.
Production planning establishes the basic objectives for work in each of the major functions. It should be based on the best tradeoffs for the firm as a whole, weighing sales and marketing objectives, manufacturing's cost, scheduling and inventory objectives, and the firm's financial objectives. All these must be integrated with the strategic view of where the company wants to go.
The production-planning process typically begins with an updated sales forecast covering the next 6 to 18 months. Any desired increase or decrease in inventory or backlog levels can be added or subtracted, resulting in the production plan. However, the production plan is not a forecast of demand. It is planned production, stated on an aggregate basis. An effective production-planning process will typically utilize explicit time fences for when the aggregate plan can be changed (increased or decreased). Also, there may be constraints on the degree of change (amount of increase or decrease).
The production plan also provides direct communication and consistent dialogue between the operations function and upper management, as well as between operations and the firm's other functions. As such, the production plan must necessarily be stated in terms that are meaningful to all within the firm, not just the operations executive. Some firms state the production plan as the dollar value of total input (monthly, quarterly, etc.). Other firms may break the total output down by individual factories or major product lines. Still other firms state the plan in terms of total units for each product line. The key here is that the plan be stated in some homogeneous unit, commonly understood by all, that is also consistent with that used in other plans.
The production schedule is derived from the production plan; it is a plan that authorized the operations function to produce a certain quantity of an item within a specified time frame. In a large firm, the production schedule is drawn in the production planning department, whereas, within a small firm, a production schedule could originate with a lone production scheduler or even a line supervisor.
Production scheduling has three primary goals or objectives. The first involves due dates and avoiding late completion of jobs. The second goal involves throughput times; the firm wants to minimize the time a job spends in the system, from the opening of a shop order until it is closed or completed. The third goal concerns the utilization of work centers. Firms usually want to fully utilize costly equipment and personnel.
Often, there is conflict among the three objectives. Excess capacity makes for better due-date performance and reduces throughput time but wreaks havoc on utilization. Releasing extra jobs to the shop can increase the utilization rate and perhaps improve due-date performance but tends to increase throughput time.
Quite a few sequencing rules (for determining the sequence in which production orders are to be run in the production schedule) have appeared in research and in practice. Some well-known ones adapted from Vollmann, Berry, Whybark and Jacobs (2005) are presented in Operations Scheduling.
THE PRODUCTION PLANNING AND PRODUCTION SCHEDULING INTERFACE
There are fundamental differences in production planning and production scheduling. Planning models often utilize aggregate data, cover multiple stages in a medium-range time frame, in an effort to minimize total costs. Scheduling models use detailed information, usually for a single stage or facility over a short term horizon, in an effort to complete jobs in a timely manner. Despite these differences, planning and scheduling often have to be incorporated into a single framework, share information, and interact extensively with one another. They also may interact with other models such as forecasting models or facility location models.
It should be noted that a major shift in direction has occurred in recent research on scheduling methods. Much of what was discussed was developed for job shops. As a result of innovations such as computer-integrated manufacturing (CIM) and just-in-time (JIT), new processes being established in today's firms are designed to capture the benefits of repetitive manufacturing and continuous flow manufacturing. Therefore, much of the new scheduling research concerns new concepts and techniques for repetitive manufacturing-type operations. In addition, many of today's firms cannot plan and schedule only within the walls of their own factory as most are an entity with an overall supply chain. Supply chain management requires the coordination and integration of operations in all stages of the chain. If successive stages in a supply belong to the same firm, then these successive stages can be incorporated into a single planning and scheduling model. If not, constant interaction and information sharing are required to optimize the overall supply chain.
SEE ALSO: Aggregate Planning ; Operations Management ; Operations Scheduling ; Product-Process Matrix ; Supply Chain Management
R. Anthony Inman
Hurtubise, Stephanie, and Claude Olivier, and Ali Gharbi. "Planning Tools for Managing the Supply Chain." Computers & Industrial Engineering 46 (2004): 763–779.
Kreipl, Stephan, and Michael Pinedo. "Planning and Scheduling in Supply Chains: An Overview of Issues in Practice." Production and Operations Management 13, no. 1 (2004): 77–92.
Vollmann, Thomas E., William L. Berry, Clay D. Whybark, and F. Robert Jacobs. Manufacturing Planning and Control for Supply Chain Management. 5th ed. New York: Irwin McGraw-Hill, 2005.
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Production Planning - A Complete Guide
According to Gartner, the global manufacturing operations management (MOM) market size is expected to reach $6.8 billion by 2023. Further on, research by KPMG suggests that 73% of manufacturers are using artificial intelligence (AI) to improve production planning.
This is supported by the results of a survey conducted by McKinsey, according to which 78% of manufacturers are using advanced analytics to improve production planning. Lastly, according to a survey by PWC, 87% of manufacturers are using cloud-based solutions to improve production planning.
While these statistics have highlighted the importance of production planning, it has also highlighted its most recent trend of adopting cloud-based software to assist them in it.
Production planning is the act of developing a guide for the design and production of a given product or service, thereby making your production process as efficient as possible.
It thus makes complete sense that the adoption of software that will automate your key business processes will only help you reach your objective faster and more efficiently.
The main purpose of production planning is to optimize your manufacturing process, consequently reducing your manufacturing costs and maximizing your net revenue and return on investment .
Additionally, production planning helps in creating a process that takes care of customer-dependent processes like timely delivery, as well as customer-independent processes like production cycle time.
Thus, for the overall productivity and profitability of your business, it is important for you to have a complete understanding of production planning. This article will help you with that by covering the following topics:
What is Production Planning?
Difference between production planning vs. production scheduling, why is production planning important, 5 types of production planning, 5 steps to make a production plan, 3 common production planning mistakes, which production planning kpis must you track, what are the 3 most common production planning tools, how can deskera help you with production planning, key takeaways, related articles.
Production planning is the process of deciding how a product or service will be manufactured before the manufacturing process begins. Thus, it is about how you plan to manage your supply chain , raw materials and components, employees, and the physical space where your manufacturing processes take place.
It is thus an important process for manufacturers like you as it affects other important aspects of your business like:
- Supply chain management
- Production scheduling
- Material requirements planning
- Production lead time
- Resource capacity planning
Considering that production planning will also spell out everything surrounding your production targets, it will also map out all the operational steps involved and their dependencies in reaching them.
The primary goal of production planning is to design the most efficient way to make and deliver your company’s products at the desired level of quality. In fact, a well-designed production plan will help your company in increasing its output and save money by developing a smoother workflow and reducing waste.
As is evident, production planning is a broad discipline that involves much more than a focus on manufacturing process efficiency.
In fact, production planning activities include demand forecasting as well so that you will be able to determine the right mix of products to meet customer needs. Additionally, it will also help you in choosing the optimal approach to building those products.
Also, production planning will assess the resources needed to meet production goals and lay out in detail all the operations in the production process.
Lastly, production plans must include the flexibility to make operational adjustments when problems occur- such as staffing shortages, supply chain problems, and machine breakdowns.
Production Planning: Production planning is the process of determining the number of goods and services that an organization will produce in a given period of time.
It involves making decisions on the number of resources, such as raw materials, labor, and capital, that will be required to meet the desired production output.
It also involves the selection of production processes, the determination of production schedules, and the coordination of activities within the production process.
Production Scheduling: Production scheduling is the process of organizing and planning the sequence of production operations and activities in order to ensure that the desired output is achieved within the specified time frame.
It involves the allocation of resources, the determination of task sequences, and the creation of production schedules.
It also involves the coordination of activities within the production process in order to ensure that the desired output is achieved in the most efficient manner possible.
Therefore, while production planning provides an overview of what your company plans to do, production scheduling creates a more detailed view of exactly how your company will do it.
This means that the production schedule will describe when each step of your production plan will occur and consequently by using which resources and how.
Considering that a well-constructed production plan will help you boost your revenue, net profits , financial KPIs , operational metrics , and even customer satisfaction, production planning is vital for your business and its success.
In fact, a poorly designed production plan can cause production problems and even carries with it the risk of sinking your company.
Some of the specific benefits of production planning are:
Your production plan will provide you with a framework that will help you understand your resources and the production steps that you will need to undertake to meet your customers’ needs.
Additionally, it will also help you understand the potential problems that may occur during production and how you can mitigate them. This will help you improve your cash flow and the health of your financial statements . It will also help you improve customer retention .
One of the other benefits of production planning is that it will help you reduce bottlenecks and help minimize costs. This will thus keep your net working capital stronger and prepared for other uses that will lead to the growth and development of your business.
Additionally, production planning will also help you ensure that your products are of high quality and that your expenses do not exceed the budget.
Lastly, it will also help ensure that your resources are used efficiently and that wastage is avoided. In fact, production planning will also help in reducing manufacturing lead times through efficient planning and processes.
With production planning, you will be able to ensure that your company is able to make and deliver products to customers on time. This will lead to strong customer loyalty , as well as a positive brand image that will encourage returning customers as well as increased sales referrals .
Depending on the production method that your company uses, as well as on other factors like product type, order size, and equipment capabilities, the design of your product plan will be decided. The five types of production planning that are used most frequently are:
Batch Production Planning
This type of production planning refers to when you need to manufacture identical items in groups or in a continuous process rather than one at a time.
Batch production often leads to increased efficiency for several businesses. This leads to increased gross profits , reduction in the cost of goods manufactured , and better customer satisfaction.
For example, a clothing manufacturer making goods for the summer might first set up its cutting and sewing machines to make 500 red t-shirts, then switch to navy fabric and thread to make 400 tank tops.
A good production plan for batch processing is one that looks out for potential bottlenecks or delays when switching between batches. This will help you avoid additional expenses and maximize your profitability as well as productivity.
Job - or Project-Based Planning
Used most often by small and medium-sized businesses, here, the focus is on the creation of a single item by one person or team. Typically, job or project-based planning is used when there is a specificity of each client’s requirements, thereby making it difficult to make the products in bulk.
Several construction businesses and makers of custom jewelry and dresses adopt this production planning method to get the job done.
Flow Production Planning
Flow production is also known as continuous production, and here, the standardized items are mass-produced continuously on an assembly line. This method is most often used by large manufacturers who want to create a constant stream of finished goods.
In flow production planning, it is important that each item moves seamlessly from one step along the assembly line to the next. This will help avail the benefits of adopting flow production, which reduces costs and delays, especially when there is a steady demand for your products.
Based on the steady demand for your products and adoption of flow production, it will become easy for you to determine your needs for materials, equipment, and labor at each stage along the assembly line. This will help you streamline your production and avoid delays.
For example, companies in the automotive industry and makers of canned food and drinks use this method.
Process Production Planning
This is a method wherein there will generally be different types of machinery that are completing separate tasks to put together the finished goods.
Mass Production Planning
While this method is similar to flow production planning because it is primarily focused on creating a continuous flow of identical products, this happens at a much bigger scale. This means that by implementing this method, you would be able to cut your production costs through economies of scale.
This method will be the aptest for you when the uniformity of your products is as important as the efficiency of your production process.
Production planning is a complex and dynamic process that starts with forecasting and includes process design and monitoring. The five typical production planning steps are:
Forecast Product Demand
The first step to production planning is to estimate how much of each product you will need to produce over a given period of time.
Your historical data will be able to help you with forecasting, however, during demand planning , and consequently production planning, you will also need to take other demand-affecting factors like market trends and the economic situation of your buyer personas into consideration.
Implementing a demand planning software like Deskera MRP, which will also be able to help you with production planning, will help you make more informed decisions. This, in turn, will lead to increased profits, productivity, and more satisfied customers.
Map Out Production Steps and Options
In this step of production planning, you will be determining the resources, steps, and processes that you will need to produce the required output in a given time period. Here, you can also examine different options available for achieving your production goals, like considering outsource manufacturing .
One of the added benefits of production mapping is that it will help you identify which steps are interdependent and which can be performed simultaneously.
For example, you want to produce 1,000 children’s bicycles. Manufacturing the bicycle frames consists of a series of steps that must happen in sequence - like cutting metal tubes, welding, and painting, etc. However, there are other activities that can happen simultaneously, like assembling the wheels.
Lastly, this step will also help you determine if you have all the necessary resources and the right equipment. It will also help you identify what you will need to do if your machine breaks down. In fact, production mapping will also help you determine whether your suppliers are meeting your demand on time or not.
Thus, production mapping will assist you in inventory management , keeping a check on your inventory costs , and shop floor scheduling . It will also help you improve the ratio of your operating income to operating expenses .
Choose a Plan and Schedule Production
After comparing the cost, the time required, and the risks for each option, in this step, you would select a production plan to implement. Sharing the selected plan with all the necessary stakeholders will help you ensure a smoother production process, as they will all be aware of what is going to be needed and when.
Then, you will create a detailed production schedule that will lay out in detail how your company will execute the plan, including the resources and timing for each step. In fact, this will set the basis for the master production schedule while shortening your order fulfillment cycle time.
Monitor and Control
Once you have completed the above steps, your production will start. This means that you will now need to track performance and continuously compare it against the target described in the production plan.
The benefit of doing this is that it will help you ensure that you are adhering to the plan as well as the schedule. Additionally, it will also help you detect any issues as soon as they pop up, letting you address them quickly, thereby mitigating the losses they might have caused.
It is going to be inevitable for your production to be affected by events that you cannot plan for or predict. Some of those events include supply chain lags, client specifications, equipment failures, and worker illness.
Additionally, after seeing your production plan in action, you might have even identified ways to improve it and make it more profitable.
Thus, it is crucial that you keep your production plans flexible enough to allow for adjustments when needed. This will help you improve their efficiency and profitability by huge measures.
One of the best ways to avoid or mitigate problems once production has started is by being aware of the potential pitfalls ahead of time. The three most common production planning mistakes are:
Not Anticipating Hiccups Along the Way
It is very likely that the plans will go awry in any complex production process. It is thus important that your production planning includes risk management strategies. This should also include backup plans that your company can rely on in case any problem arises. If you fail to do so, you might face serious problems.
For example, if a machine breaks on the line and you have not kept aside a budget for repairs and overtime of the workforce, then this issue will lead to financial strain on your company’s resources.
Keeping Your Distance
While implementing production management software will lead to you getting real-time visibility into your company’s production status, you should make sure that this information is supported by in-person visits to the production line.
These visits will give you valuable insights into how production is working in practice. These insights might prove useful in changing your production planning to make it more profitable and productive.
If you or your employees continue to only sit behind the desk, then you will be missing out on these valuable insights, which will even improve your several relevant key performance indicators .
Failing to Maintain Equipment
It is crucial that you regularly maintain your company’s equipment because this is what is making your production happen. Thus, you must have a strategy in place to track the usage, as well as a budget to pay for the regular preventive maintenance that will ensure that they keep running smoothly.
KPIs or key performance indicators are those important metrics that will help your company track the health of its production processes.
By monitoring KPIs and comparing them to target values defined in your production plans, you would be able to assess whether your production is on track or not.
Additionally, you would also be able to identify problems that might need addressing.
Some of the typical production planning KPIs that you must track are:
This is one of the key efficiency metrics that will track the percentage of time that production is not occurring during the scheduled operating hours. Some of the reasons why this is happening are:
- Machine breakdowns
- Tool adjustments
While some of the downtimes might be essential, like, for example, downtime for machine maintenance, generally, the lesser the downtime, the better it is.
This is also known as the changeover time and is the amount of time it takes to switch between jobs. Setup time affects overall productivity because, during these periods, production is halted.
Thus, it is important that production schedules take into consideration how much time and effort it takes to reconfigure production for each job. This includes but is not limited to the following:
- Changes to the equipment
- Changes to the raw materials
- Changes to the workforce
In order to increase your efficiency, it is important that you design your production schedules such that they minimize changeover time.
In a manufacturing environment, this is typically measured as the number of units produced during a specific period. The advantage of comparing the actual production rate for each process with its planned rate will help you identify your strengths as well as weaknesses. It will also help you to address your problems.
Overall Equipment Effectiveness (OEE)
This is the measure of the overall manufacturing productivity that accounts for quality, performance, and availability. The formula for OEE is:
OEE = Quality x Performance x Availability
Typically, quality is measured as the percentage of parts that meet the quality standards. Performance is how fast a process is running compared to its maximum speed, which is expressed as a percentage. Availability is the percentage of uptime during a company’s scheduled operating hours.
Thus, you can increase your OEE by lowering downtime, reducing waste, and maintaining a high production rate.
This is the percentage or number of products that have failed to pass quality checks. Depending on the nature of the product and the problem, it may be possible to salvage some of the rejected items by reworking them. However, there may be others that need to be scrapped.
Production delays can be costly in terms of reputation as well as money. This is because if you are able to generate products on schedule, then there would be fewer chances of you needing to use costly expedited shipping or other emergency measures to meet deadlines.
Additionally, delivering orders on time will keep your customers happy, which means that they are more likely to continue doing business with your company while also helping in your company’s positive brand awareness .
To build their production plans and track their progress, businesses tend to rely on a variety of tools. These tools range from visualization tools to sophisticated software that automates several of the involved steps. The three most common production planning tools are:
A Gantt chart is a detailed visual timeline of all the tasks scheduled for a particular job. This chart is an integral part of manufacturing and several other industries.
Considering that production planning involves coordinating and scheduling several tasks of your business, Gantt charts will visually represent when each task will take place and how long it will last.
However, manually creating and updating Gantt charts to reflect your complex, ever-changing production schedules is not only time-consuming but also an error-prone job.
While small companies start tracking their simple production plans using spreadsheets, for most companies, the inherent complexity of production planning quickly outstrips the capabilities of spreadsheets.
Production Planning Software
Production planning involves a wide range of activities, including but not limited to forecasting, tracking inventory, supply chain management, and scheduling jobs. This requires information from across your company and beyond.
Additionally, production planning information is integral to business operations and is used by other groups within the company, including finance.
Taking all of this into account, using MRP software like Deskera, which includes production planning software, and also provides a single solution for managing the entire business, is the best choice you can make for your company.
As a manufacturer or retailer, it is crucial that you stay on top of your manufacturing processes and resource management.
You must manage production cycles, resource allocations, safety stock, reorder points, and much more to achieve this.
Deskera MRP is the one tool that lets you do all of the above. With Deskera, you can:
- Track raw materials and finished goods inventory
- Manage production plans and routings
- Maintain bill of materials
- Optimize resource allocations
- Generate detailed reports
- Create custom dashboards
And a lot more.
It is also possible to export information and data on Deskera MRP from other systems. Additionally, Deskera MRP will give you analytics and insights to help you make better decisions.
So go ahead and book a demo for Deskera MRP today!
Production planning is the process of deciding how a product or service will be manufactured before the manufacturing process begins. Thus, it is about how you plan to manage your raw materials and components, supply chain, employees, and the physical space where your manufacturing processes take place.
The key benefits of production planning are:
- Customer satisfaction
The five main types of production plans are:
- Batch production planning
- Job or project-based planning
- Flow production planning
- Process production planning
- Mass production planning
The five steps of making your production plan are:
- Forecast product demand
- Map out production steps and options
- Choose a plan and schedule production
- Monitor and control
- Adjust accordingly
The three most common production planning mistakes are:
- Not anticipating hiccups along the way
- Keeping your distance
- Failing to maintain equipment
The key production planning KPIs that you must track are:
- Production rate
- Overall equipment effectiveness (OEE)
- Rejection rate
- On-time orders
Implementing software like Deskera MRP will ease production planning for you while also ensuring its efficiency and, therefore, productivity and profitability.
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Production Planning for Small Manufacturers
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Table of Contents
What is production planning?
Production planning is the process of strategically considering and preparing all key variables of a company’s manufacturing process for an upcoming period before it begins. The process usually involves creating and following a production plan – a document or methodology detailing the key steps of the manufacturing operation. The main goals of production planning are to achieve more control over manufacturing and to maximize production efficiency in the process.
Production control means that there is a good overview of real-time workflows and the manufacturing operation writ large, that information on inventory is quickly accessible, and that there is a readiness to react immediately in an unforeseeable situation. Production efficiency, on the other hand, can be taken as a guided effort toward matching production volumes with demand, reducing overhead and production costs, eliminating waste, and shortening lead times.
In the past, thorough production planning used to be common only for large-scale manufacturers. These days, however, manufacturing processes as well as supply chains are becoming more and more complex also for small and medium enterprises. Having a well-planned-out production cycle is thus becoming a necessity for manufacturers of any size. Thankfully, means of conducting production planning have also become much more affordable and available in recent years.
Still, many business owners either plan their production using outdated methods or avoid investing time and resources into systemic planning or inventory management altogether, unaware that this can bring about opportunity loss and negatively affect competitiveness.
What is a production plan?
The production plan is the central document detailing all necessary information that an upcoming production timeline will entail. It should include all major production-related aspects of a manufacturing plant like capacities and schedules, production priorities, labor, workstations, and equipment, raw material availability, inventory movements, routings, etc.
The more comprehensive the production plan, the easier it will be to manage production. It is, therefore a good idea to also consider additional details of manufacturing, such as:
- Are there extra suppliers or backups for components with longer lead times?
- What possible bottlenecks and constraints might occur in different scenarios and how to alleviate them?
- Does the staff need additional training or will there be a need to outsource parts of production for a period?
- When and how should equipment maintenance be conducted within the planned production phase?
Thoroughness is crucial, however, the production plan also needs to be concise enough to be easy to follow. Too many loops in the decision-making process can constitute a planning constraint in itself. Included aspects should be weighed and redundant steps deduced. Another crucial factor is that once ready and accepted, the production plan should be adequately communicated to all relevant parties by the production manager.
How are production planning and production scheduling connected?
Whereas production planning is the strategic process of planning out activities related to manufacturing goods, production scheduling is the process of making the production plan work on a timeline. In other words, a production schedule is the production plan unfolding in time, and scheduling as such, is managing that unfolding.
So, if the production plan details all necessary processes required to achieve production goals for a time period, the production schedule details the sequence of these processes and their time dependence. Much like with production planning, achieving maximum efficiency is among the chief goals of production scheduling.
Also t ake a look at our guide to production scheduling.
The 5 steps of production planning
Production planning can be conducted in many ways. Ultimately, the right way to do it is specific to the company and its workflow particulars and requirements. Broadly speaking though, the production planning process can be divided into 5 steps.
1. Forecasting and capacity planning
First of all, there needs to be a precise understanding of the production volumes that the shop floor needs to meet in the upcoming manufacturing period. Historical sales data, surveys, market analysis, and other metrics are analyzed to create a demand forecast. This process is especially important to get right for make-to-stock manufacturers that need to avoid overstocking on finished goods inventory.
The data from the forecast can then be coupled with capacity planning. In capacity planning, production volumes for past periods, as well as manufacturing data on production capacities from the manufacturing system are analyzed to gain insights into optimal utilization rates. There are multiple analytical methods available for conducting capacity planning. In any case, comparing the data with the forecast enables making sure whether the production system is capable of meeting the anticipated demand or needs adjusting.
2. Production mapping and resource allocation
In this phase, production is mapped out in detail to determine the sequence and routings of the upcoming workflow. This involves organizing the production system and shop floor to handle upcoming production orders, planning out consecutive and sequential processes, decoupling points, as well as inventory movements to and from the shop floor. Resource allocation should be conducted as thoroughly as possible, factoring in everything from equipment maintenance to labor availability.
Raw material availability is equally important to plan for. It should be determined whether raw materials are stocked or available to order and from which suppliers, whether delivery and shipping lead times are up to date, whether some critical components can be outsourced if the need arises, or if there is an adequate backup in place for their availability. It really pays to plan out these types of questions beforehand. In essence, significant parts of the overall procurement and supply chain management fall into this phase.
3. Scheduling production
Once the capacities, production methods, and material availability are mapped, the production plan is finalized. It is now time for production scheduling i.e., the plan needs to be allocated to a timeline with detailed production schedules generated for the upcoming period. It is not uncommon for manufacturers to create a master production schedule (MPS) in this phase. The MPS shares many facets with a production plan and includes all relevant information regarding what needs to happen to produce the required quantities and when it needs to happen.
These days, large parts of the scheduling process can be simplified and organized by using manufacturing scheduling software . For example, capable MRP systems include detailed production scheduling tools like interactive Gantt charts, on-the-fly drag-and-drop rescheduling, automatic order management tools, per-worker individual schedules, etc.
4. Production and quality control
This next phase involves having a number of continuous control steps built into the production management process to ensure that the previous effort of forecasting, scheduling, and planning doesn’t go to waste and that manufacturing proceeds according to plan. Production control systems track the performance of work processes and compare them with target capacities. Quality control, on the other hand, is strategically placed steps aimed at ensuring production conforms to targets.
These tracking systems should provide near real-time feedback of the production system because it’s crucial to ensure a minimal response time, should anything unexpected occur or if readjustments need to be made. Production control methods include the continuous monitoring and reporting of workflows, tracking various production KPIs and metrics, integrating quality control checks into the manufacturing process, etc.
5. Continuous adjustment
Finally, no matter how well production is planned out and executed, forecasts and projected capacities are still approximations. The actual data on performance is only compiled as production occurs. For this reason, a concrete part of production planning is continuous adjustment and improvement.
After all, there is no real guarantee that the production plan, based on past data and the planners’ best efforts, will ideally reflect current circumstances. Production plans and production management systems should be designed to be flexible enough to allow for changes to be made on the fly. After all, a constant effort of striving toward further efficiency in all aspects of manufacturing from stock movements to scheduling is paramount for maintaining a competitive edge.
Types of production planning
As there are many different types of production workflows, planning out production is not a one-size fits all process. While the above 5 steps are adaptable to many different scenarios, let us look at three different production methods that manufacturing businesses can be set up in and how it could affect planning.
- Job shop or project planning. The job or project-based method involves manufacturing products one piece at a time. Employees are usually not differentiated and instead, all work on the same project. Used mostly in make-to-order (MTO) or engineer-to-order (ETO) workflows, the job method needs distinct planning as all phases of the production process are specific to the project. Due to the custom nature of job shop manufacturing, production plans here are usually created and followed per job or project, not per manufacturing period.
- Batch production planning. Batch production is a workflow type in which a batch of identical goods is produced at a time. It is in essence a middle way between job shops and process manufacturing. In batch production, the shop floor is set up to handle one type of goods at a time, instead of producing many different items consecutively. Each product has a different production plan according to which the shop floor is set up before manufacturing begins. If a company manufactures many different products with the batch method, batch production planning should definitely include specific additional instructions for how to optimally switch layouts.
- Flow, process, and continuous production planning. In the flow-type manufacturing workflow, large sequential assembly lines are set up to enable a continuous flow of goods. Each workstation in the production line completes a single process before the components move on to the next phase. This type of production is mostly used in make-to-stock operations with high production volumes. Here, it is crucial that the sequence and movement of goods advances like clockwork. Flow-type production plans must be extremely detailed in how production is mapped and material availability is achieved. Increasing efficiency and minimizing waste is paramount in these large-scale production operations, as a mere fraction of a percentage of raw material wasted or a few seconds longer process step can translate into huge differences by the end of a workday.
The importance of production planning
With the modern manufacturing industry becoming more and more complex and supply chains spanning across the globe, more control over the production process translates directly into more business opportunities and competitiveness. Here are some of the most important benefits of good production planning:
- Increased efficiency: By optimizing the utilization of resources like machinery, labor, and raw materials, proper production planning significantly improves operational efficiency. This translates into reduced waste, streamlined production flows, and cost savings.
- Improved customer satisfaction: A good production plan ensures timely manufacturing and delivery of goods, which leads to improved customer satisfaction. By helping to maintain consistent product quality and meeting delivery timelines, thorough production planning is a path towards building a stronger reputation and fostering long-term customer relationships.
- Reduced production time: By streamlining the manufacturing process, production planning helps to eliminate bottlenecks, better arrange the shop floor, and reduce waiting times between production stages. This leads to a shorter production cycle and lead times, enabling faster delivery of products.
- Lower production costs: By marrying demand with capacity, maximizing resource usage, and reducing downtime, production planning helps to significantly lower production costs. This increases profitability and provides more headroom for investments in other areas of the business.
- Inventory Management: Naturally, effective production planning also helps manage inventory levels to ensure that enough raw materials are in stock to meet production demand, avoiding overstocking at the same time. This prevents the added cost of both excess stock and shortages and keeps the warehouse clutter-free and organized.
- Quality Control: Quality control is an integral part of production planning. By establishing standards and checkpoints in the production process, firms can detect and correct any flaws early on. This ensures that the final product meets or exceeds customer expectations, crucial for maintaining brand reputation and market position.
- Risk Management: Production planning includes anticipating potential disruptions in the supply chain or production process and having contingency plans to address the risks. Being proactive minimizes downtime and ensures the continuity of operations even in unexpected situations. Thus, production planning contributes to the overall resilience and stability of the business.
Picking the right production planning tool
In the modern manufacturing landscape, traditional production planning methods like spreadsheets or manual tracking are becoming increasingly inadequate. The complexities and dynamics inherent in modern manufacturing simply demand a more agile, accurate, and efficient approach to managing production. Not only do manual methods fall short of managing large datasets or traceability, but they also lack the ability to handle complex production methods like multi-level bills of materials (BOM), integrated procurements, dynamic scheduling, parallel execution, etc. – crucial aspects of modern production planning.
The best solution for businesses looking to effectively navigate the complexities inherent in the manufacturing market is dedicated manufacturing software. These types of manufacturing ERPs ( enterprise resource planning ) provide a robust solution for managing all aspects of production from bill of materials (BOMs), routings, and inventories, to procurements, human resources, financials, and customer relations.
ERPs or MRP systems automate many of the previously manual tasks involved in production planning, helping to eliminate human error and providing more accurate data for real-time decision-making. It is no surprise then that well-implemented production planning software can significantly reduce production times, improve resource optimization, and increase profitability and competitiveness with a high return on investment.
When it comes to small and medium-sized manufacturers seeking affordable yet powerful production software, MRPeasy stands out as an easy choice. This all-in-one manufacturing software is specifically designed to meet the unique requirements of smaller manufacturers without the complexity and price tag often associated with traditional ERP systems. MRPeasy’s user-friendly and 100% cloud-based interface and comprehensive suite of tools make it perfect for managing every aspect of production planning, all in one place.
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Manage purchases and raise pre-filled purchase orders with a single click. Vendors, prices, lead times, it’s all there. Manage your supply chain with the help of accurate statistics. Forecast your procurement needs.
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- Create an objective. This is the same discipline that you need to apply just like when you create a training schedule . Creating an objective allows you to think out of the box and look at production in a different perspective.
- Consider your resources. Once you have established your smart goal , think of the supporting components like the materials and other resources needed for the production.
- Set a reasonable timeline. It is important that you think practical when setting the timeline. It makes your target attainable.
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