Corresponding Production Planning11th April 2021
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 with enterprise resource planning.
Production planning is the future of production. It can help in efficient manufacturing or setting up of a production site by facilitating required needs. 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’s 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.
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
Tips to improve production planning
Before production planning, the first action to take is forecasting demands for your products. While this may not be accurate to the last digit, getting rough estimates rolling is important to allocate resources. Forecasting can be done based on factors like historical order data and market trends/demands. Drawing out proper forecasts helps planning the type and quantity of materials to be produced and also the planning of raw material procurement.
Both, inventory shortage and inventory surplus are undesirable states. You can’t proceed with production when there’s a shortage and you waste space and money when there’s a surplus. Efficiently controlling inventory involves reordering when current inventory dips below a certain level, calculating the lead times to order items with long lead times earlier, and factoring in storage conditions. A well-controlled raw material inventory helps run a smooth production line and outputs finished goods inventory on time.
Plan for everything and everyone
Often, when making production plans, some machine or some person is unaccounted for. The problem here is that that machine may go down or the worker may be on leave, or worse, working on something else. Hence, plan for every machine, raw material, workstation, warehouse, and employee.
Once the production plan is final and work orders are handed out, the manufacturing process begins. At this point, things may go wrong, machines pause, or items may get misplaced. Constantly monitoring the factory floor with supervisors or with IoT devices ensures that all the pieces are moving as planned.
Despite your best planning, things go wrong on the factory floor. Anything can happen from suppliers making late deliveries to workers falling sick to machines failing. It’s important to be flexible and adapt to these changes quickly so that the planned quantities can be delivered on time. Ideally, you should also plan for any such risks beforehand.
KPIs for production planning
A few key performance indicators to track in production planning are:
- Production cost: This is essentially the monetary cost involved in producing the item. Costs include raw materials, electricity, fuel, worker salaries, rent, etc.
- Capacity utilization rate: It’s the percentage of actual manufacturing output against the total possible manufacturing output. If many machines and workers are sitting idle, your capacity utilization is low. Ideally, you want it high but never full.
- Projected versus actual hours: When planning, you may allocate a certain number of hours for completion of the production plan. But, it may take longer due to delays from workers or unexpected tasks. This KPI gives you a picture of how much time it was supposed to take and how much it did.
- Employee utilization (productivity): You want workers to be working properly during the punch in and punch out. Nobody wants to be a machine by working to the dot but working 4 hours out of 8 is also not reasonable.
- Takt time: Takt time is a lean manufacturing concept. It is the time taken to produce a single unit of item.