Any organization that makes a product has to create a plan for what to make, when to make it, how much to make, where to make it, and what is required to make it (resources and materials). The challenge is what tools to use to get the best plan possible and, once you have a plan, how to schedule the production.
The business dictionary defines production planning as, "The administrative process that takes place within a manufacturing business and which 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. A typical large manufacturing business engaging in production planning will aim to maximize profitability while maintaining a satisfied consumer base."
The objectives of a good production planning process can be broken down by the following:
- Effective resource utilization
- Steady flow of production
- Optimal inventory levels
- Coordination between multiple departments
- Labor productivity improvement
- Minimize scrap
- Reduce production cost
- On time delivery
- High customer satisfaction
- High quality products
The method for the "administrative process" can take on various forms and functions from software, to spreadsheets, to T-cards and wallboards. I have seen large automotive suppliers using manually updated Excel spreadsheets to plan production and small job shops using software based material requirements planning to varying degrees of success. There is no "Easy" button for planning production that can be applied to every manufacturing process. Manufacturing processes are as plentiful as there are products on the shelf at your closest big box. There are many methods for planning, such as algorithmic sequencing, capacity planning, material requirements planning, supply chain management, or various combinations of these methods. Selecting the method that works best for your products can be challenging and overwhelming at best when considering that you still have to meet your current customer demand using the methods already at hand.
The key to the selection and implementation of a functional and effective production planning system is a complete understanding of the elements it takes to make your product and capturing that information in your ERP system. This includes:
- Lead times (manufacturing and purchasing)
- Customer requirements
- Purchasing requirements
- Other industry specific inputs (for example, serial or lot control requirements)
All of these elements have to be defined and then captured in your system to allow that system to facilitate planning and scheduling. No matter what method you choose, the success or failure will be in the accuracy of the data used to define the plan or schedule.
Typically, the amount of extra work involved in selection and implementing a production planning system requires external assistance. Algorithm has 20 years of experience in helping customers select the best method for managing their business. We utilize a detailed site assessment methodology to drill down into the requirements of the business and work with the customer to develop a detailed list of prioritized recommendations. The list of recommendations breaks a large complicated process down into smaller projects to efficiently meet the overall goal. Selecting the right partner can be just as important as selecting the best planning method.