Production Planning

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Production planning consists in establishing a work plan depending on the quantity of orders or expected sales. This planning is done taking into account:

- Available materials or their delivery times.
- Number of workers.
- Production capacity of machines and employees.

With planning, companies can begin the production of new products in a logical and orderly manner. Also, thanks to this planning you can calculate when you can order materials and schedule the transportation of products.

Production planning can be done manually, and the person who does it has to have all the details of the company in their head. However, for most producing companies that's a lot of work, so planning is often found as an ERP system functionality. In this system you'll find all the relevant details for the planning and some fixed rules with which the planning can be carried out. For example, in an ERP system specific to the food sector, it's possible to establish the ingredients that must be used first to manufacture a type of food or, to give certain priorities to some customers.

" Possible " problems involved in production planning

From the traditional point of view, planning is something that's followed in a " very " strict way. However, each company has to try to solve sporadic deviations that vary from the original plan. These unexpected circumstances may arise even when planned in an automated manner.

For example, if a textile supplier can't wear lace fabric for a t-shirt to a clothing factory, the producing company can't continue with the order. Often, when this happens, the solution they choose to " compensate for accumulation " is to start with another order, for example, a belt. However, this may cause more and more semi-finished products. As soon as the lace of the shirt arrives, it must be done. After that, belt production can continue. This continuous interchange between orders implies a great waste of time.

Many companies are tempted to accept longer delivery times in order to control unexpected circumstances that interrupt production. In this way, they hope to build with 'certainty'. However, in practice, this results in greater fragmentation of production. All this leads to a negative spiral that causes the production periods to be longer and longer. This long wait produces customer dissatisfaction. In fact, if a customer compares between his product and that of a competitor and looks at delivery times, this often means that the customer buys the other instead of his own.

Is production planning outdated?

Due to the above mentioned problems, there are some companies that conceive the concept of production planning as unsuccessful. However, there is no company in the manufacturing industry that works completely without planning. In fact, new work methods related to production planning have emerged. For example, rapid response manufacturing, better known for its Anglo-Saxon term Quick Response Management " QRM ", focuses on planning production as late as possible. In this way, expectations about delivery times and capacity are more realistic and the response time is shortened.

Another new trend focuses on the prevention of waste, both of materials and capacity or hours of work. Both new work methods try to ensure that production doesn't hinder, but promotes the fluidity and correctness of the manufacturing industry.

Many manufacturing companies guarantee an optimized process by relocating Excel files with production planning in an ERP system. However, not all systems are equally strong in this regard. Therefore, it's important that the company compare different ERP systems that are specific to its production process and work with those ERP suppliers that have experience in their sector.



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