Every manufacturer aims to produce products of the best quality. To achieve this goal and stay ahead of your competition, efficient production planning is important. It helps you know about your resource needs, map the production process, schedule the manufacturing procedure, and monitor them. But planning the production process is not easy because it requires digitizing various business processes.
In this blog post, we will understand planning production and effective ways to handle the challenges.
What Is Production Planning?
Production planning is all about planning and designing the step-by-step process of your production. It involves deciding the raw material required and scheduling the production process based on that. It also includes identifying the resources, like labour and machinery.
An effective production planning process is important for the manufacturers to meet the customers' demands. That’s why picking the right production planning software becomes very important. It can help you reduce costs, and errors, and maximize efficiency, and inventory levels.
Why Is Production Planning So Important?
Production planning is a detailed process. It can greatly help you improve your lead time and customer satisfaction. Here is the reason why proper production planning and manufacturing scheduling is important:
1. Customer Demand: Production planning helps you fulfil your customers' demands by producing goods on time. This improves your customer relationship and the brand value of your company.
2. Resource Utilization: The production planning tools allow you to identify the raw materials required for manufacturing. With the information about demand and material availability in hand, you can assign tasks to employees and schedule the production process efficiently.
3. Reduces Cost: Proper resource planning can help you reduce the wastage of raw materials and increase production efficiency. This can increase the profit margin and improve the financial health of your manufacturing business.
Production Planning Process Explained
The primary objective of a production planning strategy is to meet the demand for production. It includes three components:
- Identifying and allocating resources
- Scheduling the production procedure
- Inventory management
These functions allow you to assign specific tasks to your employees and automate the manufacturing process by reducing human errors. You can get these components with software that contains several production planning tools.
Steps Involved In Production Planning Process
Production planning involves several steps, from identifying the required raw material to manufacturing the finished goods. Here are production planning steps that will help you to achieve your manufacturing demand efficiently:
1. Estimating Demand
The first step is to determine the product demand and the resources required for manufacturing. Demand forecasting involves analyzing historical sales data and estimating future sales. This step can help you set your production goals for a specific period.
2. Accessing Need
You also have to keep looking at your inventory needs to identify the available resources. You need an effective inventory management plan to avoid a shortage of inventory and stock overflow. You can use various techniques such as FIFO, LIFO, and ABC analysis to do this.
3. Analyzing Capacity
Determine other resources like workforce or machinery that will be needed for manufacturing. It will help you analyze the current production capacity and understand future demand. With this, you can understand if you need extra staff or machinery.
4. Mapping Steps
Once you know the available resources and production capacity, the next step is to map your production steps. Your production planning steps may involve scheduling, equipment, and production management tools to manage your process. You also need to make a complete multi-level bill for the material.
5. Scheduling Production
The production schedule is the stage where you finally assign tasks. It is one of the complex steps in production planning, as you need effective communication with your stakeholders and plot a timeline for each stage. The ideal production scheduling software can help you with this.
6. Monitoring Production
At this stage, you are all set to start your production process as per your planning. Once production planning is executed, you can further track the performance of your production process. You can use such data to make changes as per the requirements of the production management system.
Common Production Planning Challenges
In the production planning process, one can easily commit mistakes due to various challenges. Some of the common challenges in production planning are:
1. Equipment Maintenance
Outdated machinery and equipment can impact your overall manufacturing process planning. Not maintaining machinery can reduce the quality of the product and affect the supply chain. Effective planning software provides a production management system that allows you to monitor equipment performance and keep them updated.
2. Demand Forecasting
Demand forecasting is one of the most important issues faced by many manufacturing SMEs (Small and medium enterprises). Businesses face problems in estimating the raw materials used in production. Choosing the right production planning software helps you analyze accurate demand forecasting and plan for estimated resources required in the production process.
3. Unexpected Issues
Other than machinery, some unexpected issues can occur in the ongoing production process. It may include your employee performance or inventory monitoring. Here, you must follow risk management strategies in your production planning to tackle such issues. It may include the potential risks that can occur in your production phase and use the plan that can solve them.
What Are The 3 Most Common Production Planning Tools?
The best production planning tools can allow you access to demand forecasting, insightful reporting, and inventory tracking. Let’s find some of the common tools that allow you easy management of production planning.
1. Spreadsheet
Small manufacturing companies can use Google Spreadsheets or Microsoft Excel to keep records of every detail. Alternatively, you can use an ideal inventory management software that has integrated spreadsheets. It allows you to easily enter a step-by-step process and share it with various departments to manage your production.
2. TranZact
TranZact allows you to easily manage your production planning and scheduling process within a production management tool. You can create a bill of material, plan and schedule processes, and categorize your operations into stages. It also provides purchase and sales features that simplify your procurement and sales.
3. Oracle NetSuite ERP
Oracle NetSuite is a cloud-ERP software that allows manufacturers to plan production and manage procurement. Its dedicated modules allow you to analyze raw materials, determine future requirements, and schedule production under one platform. But this software is expensive for most SMEs.
Benefits Of Production Planning
Planning your production can provide a wide variety of benefits that can improve your overall manufacturing process. Here are the benefits that you can gain by designing a strategic production management process.
1. Increases Productivity
Planning resources for production make sure that sufficient resources are available for production. The benefits of production planning also include finding issues that may occur in the future. By scheduling the production process, you can fulfil the deadlines and manage rush orders as well.
2. Customer Relationship
Delivering your product within the targeted time can improve customer relationships. It builds trust among your audience and helps establish a brand in the manufacturing industry. Improving customer satisfaction can allow you to scale your business while maintaining the market demand.
3. Reduces Errors
Effective production planning allows the automation of various manual tasks, like accounting, reporting, and production scheduling. This saves a lot of time for your employees and costs. It also reduces the chances of human errors.
4. Increases Revenue
Automating your production planning through digitizing the process and navigating the valuable insights of workflow can speed up your turnaround time. This means you can deliver your product to customers on time while improving your brand value.
Best Practices For Production Planning
Planning a production process is one of the most challenging tasks that manufacturers face. Production planning may involve analyzing inventory and ordering the raw material in advance. Here are some of the best practices you can implement for production planning processes.
1. Capacity Planning
Capacity planning strategy involves various tools that provide machine availability, and labour visibility and monitor equipment performance. You can prevent overloading or underutilization of production facilities by analyzing the material availability.
2. Lean Production
Lean production is a manufacturing strategy that helps to minimize waste and improves production efficiency. Lean production planning allows the use of various tools like value stream mapping. These tools help you optimize resources and streamline operations.
3. Just-In-Time Scheduling
JIT, or Just-in-Time scheduling, is a part of lean manufacturing that focuses on production only when needed. Through this production planning process, you can easily minimize waste and save money by ordering raw materials at the right time of manufacturing.
4. Demand-Driven Scheduling
Demand-driven scheduling is one of the best practices for production planning and control. It helps you quickly adopt the market condition through demand forecasting and analyzing historical data.
5. Batch Scheduling
Batch scheduling is a common approach to manufacturing, where the changeover time between different products or batches can be minimized. It allows you to manage bulk production and monitor product quality while reducing downtime and increasing productivity.
How Can TranZact Help You With Production Planning?
Proper production management starts with effective planning, which includes production scheduling, resource analysis, and monitoring. TranZact offers production planning software that allows you to digitise your manufacturing process. You can easily determine the raw material required for the production, assign the employee, and get real-time data for each production step.
TranZact is easier to use than traditional ERP software. It is developed with simple features, especially for Indian SME Manufacturing companies. It helps to monitor the performance of your machinery and make a smooth production process for Indian SMEs. Choose TranZact now to easily create your production planning and provide your customers with a sense of satisfaction.
FAQs
1. What are the 5 steps in production process?
The 5 steps in the production process are:
- Demand forecasting
- Inventory management
- Production capacity
- Production mapping
- Production scheduling
2. What are the 6 parts of production planning?
6 parts of production planning are:
- Planning
- Routing
- Scheduling
- Inspecting
- Dispatching
- Following up
3. What are the factors affecting production planning?
The factors that affect production planning are inaccurate demand forecasting, poor inventory management, and ignorance of equipment performance.
4. What are the basic problems in production planning?
The basic problems in production planning are demand fluctuations, resource availability and utilization, and production complexity.
5. What are the benefits of production planning software?
The benefits of production planning software are:
- Better utilization of resources
- Monitor and control production
- Increases the productivity
- Promote customer satisfaction
- Reduces errors
- Increases sales and revenues
6. What are the advantages and disadvantages of production planning?
The advantage of production planning is that it helps in the procurement of raw materials and improves the production process. The major disadvantages of production planning are it’s sometimes a time-consuming process, can be difficult to understand, and lacks flexibility to change later.
7. What are the 6 major planning tools and techniques?
The 6 major planning tools and techniques are:
- Demand Forecasting
- Contingency planning
- Scenarios Planning
- Participative planning
- Gantt Chart
- Benchmarking
