Production Planning and Control - Ultimate Guide for SMEs | TranZact

Sep 21, 2021 in Production



Production Planning is one thing that every manufacturing concern tells one of the crucial parts just before production. And if it goes haywire due to any mistake made. Then the whole organization may have to suffer a loss which can ultimately affect the shutdown of the organization. But this is not only the main reason for implementing production planning and production control systems. The reasons are there like through their implementation, the adaption of product design and finalization of a production process becomes easy.

Further, there are many more reasons to discuss, but let's start with understanding the terms.

Meaning of Production Planning?

Production Planning is the process of planning the production and manufacturing operations of an organization. Based on which the optimum resource allocation for building a product is done. This process answers for What to Produce, How to Produce, When to Produce, and How much to Produce.

It helps in outlining the method on the basis of which the whole work order preparation will go on. Like when a work order comes then, what is the next step to do, how to allocate employees, raw materials, which machines to use, and how to deliver it for logistics. And how to determine the total time consumption in this process. Also, the Production Planning process in maintaining and managing the inventories of the organization.

Why do we need Production Planning?

The thing we discussed above, and you might already know that why it is necessary. It helps in creating the Bill of Materials (BOMs). Through which the cost estimation of the whole production process becomes easy to calculate.

Further, Production Planning help in Material Resource Planning. Through the BOM and its other activities, you can determine what all raw material resources are needed and at what time. It helps in creating the Budgets for the organization, ensuring all the things are utilized appropriately. And also help in expanding the capacity of production for the company based on Budgets.

Read More about - What is Bill of Materials – Everything you should know about BOM

What are Different Types of Planning involved in Production?

There are many types of Production Planning used in different industries and in various areas of the world. And right now, we are discussing some of the few examples which are recognized worldwide.

Job-Based Planning

This particular type of planning method is used by small-scale industries. And it comes of use in the places where customize manufacturing processing is required. The planning of each job or project is different from the other. Further, separate BOMs are prepared for specific jobs.

Batch Planning Method

The Batch Planning method helps in manufacturing groups of the same products at one time. This method continues for a long period which helps in the proper functioning and allocation of the resources.

Flow Planning Method

The Flow Production method is often used by Large scale industries that are manufacturing mass-producing goods. It is a demand-driven production process of complex goods. And it reduces the inventory holding costs and bottlenecks and leads time situation. Because the production process goes on continuously.

Material Requirements Planning

Material Requirements Planning (MRP) is a production planning and scheduling process that helps in ensuring the availability of resources and managing the production process. Further, it helps in maintaining the lowest material and product levels in-house. That also helps in low inventory holding costs.

How to perform Production Planning?

The next main concern which businesses has it to How to do Production Planning. And for that, they need to follow these steps-

  • Forecasting Demand of Products - The first step to take in the planning process is to know about the demand for your products. And these numbers are not necessary to be accurate at all times, like matching all digits. But it can provide you all the trend analysis of historical data. The basis on which you can plan out your whole production process.
  • Inventory Control - For starting your production process, you need to know about your inventory levels. And plan out your inventories further that will support your manufacturing process. For that, you need to develop a proper inventory management system.
  • Plan out everything for everyone - In this process, you need to map out an outline for every person that what job he has to do. Further, in a particular situation, when a problem occurs who has to take care of it. So it will be all clear, and no lead time will get wasted in the production time.
  • Monitor Production Process - After all the planning is done and the production starts. You need to monitor the production process closely that everything is going as plan and giving the desired output. And if there is some difficulty, try to fix it out.
  • Adjust the Production Process - Through continuously monitoring you, may know what things are going on. And if you see an opportunity or threat, you must adapt according to it and modify the production plan.
  • Way Forward

    So through this article, manufacturing concerns may know about how to do their production planning. But to do so, they may go for the traditional method of doing it physically on paper. Or go for using a software solution that can ease out this process for them. And it will help them out in preparing all the plans and documents like the Bill of Materials easily. That is the reason they should opt for a software solution. Because using the traditional method has many setbacks which will slow down their planning process. They have an option, and they should use it. While choosing a software solution, they should think about whether it can satisfy all their needs or not.

    And that's where TranZact. TranZact is a digital transformation tool and platform for SMEs to digitize business processes right, from customer inquiry to dispatch. It helps the SMEs in their production planning needs by providing modules for Bill of Materials, Material Requirement Planning, and many others. And SMEs can choose it or any other software only when it satisfies all their needs.


    TranZact is a team of IIT & IIM graduates who have developed a GST compliant, cloud-based, inventory management software for SME manufacturers. It digitizes your entire business operations, right from customer inquiry to dispatch. This also streamlines your Inventory, Purchase, Sales & Quotation management processes in a hassle-free user-friendly manner. The software is free to signup and gets implemented within a week.