Production Planning

Planning is the process of thinking about and organizing the activities required to achieve a desired goal. It is a basic management function involving formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. The planning process includes

• identifies the goals or objectives to be achieved
• formulates strategies to achieve them
• arranges or creates the means required
• implements, directs, and monitors all steps in their proper sequence.

Control, is one of the managerial functions like planning, organizing, staffing and directing. It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in a desired manner.

According to modern concepts, control is a foreseeing action whereas earlier concept of control was used only when errors were detected. Control in management means setting standards, measuring actual performance and taking corrective action.

Production planning is the planning of production and manufacturing modules in a company or industry. It utilizes the resource allocation of activities of employees, materials and production capacity, in order to serve different customers.

Different types of production methods, such as single item manufacturing, batch production, mass production, continuous production etc. have their own type of production planning. Production planning can be combined with production control into production planning and control, or it can be combined and or integrated into enterprise resource planning.

Production planning is used in companies in several different industries, including agriculture, industry, amusement industry, etc.

Production planning is a plan for the future production, in which the facilities needed are determined and arranged. A production plan is made periodically for a specific time period, called the planning horizon. It can comprise the following activities:

• Determination of the required product mix and factory load to satisfy customer needs.
• Matching the required level of production to the existing resources.
• Scheduling and choosing the actual work to be started in the manufacturing facility”
• Setting up and delivering production orders to production facilities.

In order to develop production plans, the production planner or production planning department needs to work closely together with the marketing department and sales department. They can provide sales forecasts, or a listing of customer orders.” The “work is usually selected from a variety of product types which may require different resources and serve different customers. Therefore, the selection must optimize customer-independent performance measures such as cycle time and customer-dependent performance measures such as on-time delivery.”

Production Planning is a managerial function which is mainly concerned with the following important issues

• What production facilities are required?
• How these production facilities should be laid down in the space available for production?
• How they should be used to produce the desired products at the desired rate of production?

Broadly speaking, production planning is concerned with two main aspects: (i) routing or planning work tasks (ii) layout or spatial relationship between the resources. Production planning is dynamic in nature and always remains in fluid state as plans may have to be changed according to the changes in circumstances.

A critical factor in production planning is “the accurate estimation of the productive capacity of available resources, yet this is one of the most difficult tasks to perform well”. Production planning should always take “into account material availability, resource availability and knowledge of future demand

Types of planning

Different types of production planning can be applied:

• Advanced planning and scheduling
• Capacity planning
• Master production schedule
• Material requirements planning
• MRP II
• Scheduling
• Workflow

Related kind of planning in organizations

• Employee scheduling
• Enterprise resource planning
• Inventory control
• Product planning
• Project planning
• Process planning, redirects to Computer-aided process planning
• Sales and operations planning
• Strategy

Principles of Production Planning

• Customer Demand – Before you can plan to assign resources, you have to know how much to produce. Production planning focuses on the principle of meeting the targeted customer demand rate in the most efficient way possible while keeping open the capability to respond to variations in demand.
• Materials – To fulfill your production target, the materials availability needed to produce should be ensured. The most efficient production planning keeps the minimum materials as standard inventory. Planners should evaluate how much material the company needs, the lead times for orders, the delivery times for suppliers and the reliability of the supply.
• Equipments – The production planner takes into account the capabilities of the equipment used to produce the output. Basic stability of equipment comprising of availability (A), performance (P) and quality (Q) parameters can be determined by Overall Equipment Effectiveness (OEE).
• Manpower – Manpower planning requires accurately estimating the number of employees required to do the work. The capacity of the workforce has to match the capabilities of the equipment to plan for the highest efficiency.
• Processes – Effective production planning makes sure that the processes used for the output continue to operate efficiently and safely. Often the normal operation of a process requires occasional testing and adjustments.
• Controls – A final production planning principle puts in place controls that detect problems as soon as they occur. Verification of inventory, use of qualified suppliers and personnel, standardization where possible. When controls are in place, it enables to take possible corrective actions to minimize the effects and return production to the required levels.