Production planning and the resulting production plan are valuable tools for the company, just as much as a map for the traveler. In fact, they have the important task of guiding the department and the company towards the goal of optimized management of activities and suggesting alternative paths by providing guidance on how to deal with changes and interruptions in the supply chain.
Modern production planning was born in the first half of the 19th century in response to the need for companies to have information and control over processes. At first, the early production plans were much simpler, as the factories were smaller and produced fewer products. The planning was limited to including the list of production orders and the date by which to complete them. A bit like paper maps, which allow you to study the route but require a lot of manual work to calculate distance and travel times.
With the increase in the variety of products, production has become more extensive and complex and consequently also planning, which has begun to look more like satellite navigators, able to give precise information on the routes and the length of the routes. The new type of production has in fact made it necessary to plan in a way that can also optimise processes to achieve a uniform production flow and low costs.
Today the goal of production planning is still this, but it has evolved further as the nature and methods of production have changed, making the monitoring of information ever more precise and complete. Planning has become increasingly similar to smartphone navigation systems: updated in real time, able to give different route alternatives and extremely precise.
What is production planning
Production planning is a typical procedure of manufacturing companies that serves to quantify the production activities to be carried out in the medium to long term. It therefore allows you to organize the production department by defining the quantity and types of products to be produced and consequently establish the resources to be used and the timeframes within which to complete orders.
The goal of production planning is to return the best possible production plan, based on production needs and available resources, so that orders are placed on time and without interruption.
Production planning is not limited to determining which activities will be carried out, but begins by analysing forecasts and sales orders to plan the purchase of raw materials and semi-finished products. It also allows you to monitor the progress of the various processes and the occurrence of critical issues, with the possibility of intervening to correct interruptions or unavailability of materials.
The benefits of production planning
Production planning is a complex and strategically important process, as it allows you to optimize company resources and improve many performance indices. One of them is the level of customer service, which can be maximized by guaranteeing punctuality and speed in delivery dates. Other advantages relate in general to the optimization of processes and the consequent reduction of costs. Specifically:
- Optimal use of resources;
- Reduced inventory;
- Reduced production and purchase costs;
- Ability to process sales forecasts.
Planning production allows you to have control over the production department, in this way you have visibility over the bottlenecks that can interfere with the production lines, intervene and identify the waste that derives from waiting operators or machines, or from all those non-optimized process phases that do not generate value.
Since planning establishes the various production activities to be carried out, it allows you to schedule supplies in such a way as to have the right amount of stock available at all times, reducing the size of the warehouse and costs.
Finally, planning production makes it possible to improve order management, with more reliable delivery dates and greater information sharing to align the supply chain with market demands.
The challenges of production planning
The main difficulties that may emerge from production planning concern:
- Complexity: a common disadvantage for smaller companies. The many variables to manage for production planning take time to devote to operations.
- Implementation cost: linked to the cost of the software and the people to be dedicated to the implementation, as well as the training of the people who will use the software.
- Lack of flexibility: one or more factors of the production process could change at any time, therefore it should be possible to adapt the plan to the new scenario. But an already developed production plan may not be able to adapt quickly to a new process.
- Distortions related to the difficulty in scheduling processes. During production it may be necessary to modify or interrupt the programmed schedule, for example in the event that a machine should stop for an hour. Therefore, you have to be prepared to face possible accidents.
Additional risks may exist when production planning is done manually. This type of planning is typical especially in loosely structured companies that produce few products with a low level of complexity. However, in today’s context, unforeseen events can happen to everyone, and one of the main disadvantages of manual planning is precisely the inability to manage unforeseen events quickly. To this they add poor visibility on data, inability to generate and analyse future scenarios and little collaboration between departments.
Production of this type can effectively be a limit to the department, rather than a concrete support, and it becomes important to evaluate specific software for production planning.
The phases of production planning
Typically four phases of production planning are identified:
- Routing: The first phase of production planning determines how much to produce, the resources needed, the sequence of operations, and the location. Its complexity varies according to the type of production. Its purpose is to determine the best sequence of operations in terms of time and costs.
- Scheduling: in the second phase of production planning, how much work to do is established, each operation is assigned a priority and finally the start and end date and time are established. The goal of scheduling is to optimize the time available, so as to meet delivery times and reduce idle capacity while keeping the workforce engaged.
- Dispatching: the phase of production control in which actual production begins. Orders are issued, the start and end times of operations are recorded and checks are carried out.
- Follow-up: the last step is to evaluate the results by detecting defects, delays and bottlenecks in the production process, to maintain regular production.
Who is involved in production planning
Within a manufacturing company there are several figures involved in production planning.
Production Manager: is responsible for planning and coordinating production with the aim of optimising resources. He is the figure with the most complete vision of the potential of the tools and acts as a point of contact between the various departments to increase productivity. The activities he deals with are very varied:
- Plan the production phases by deciding on times and methods
- Coordinate logistics and warehouse activities by monitoring stock levels
- Check that the machinery and tools are working correctly
- Manages the human resources of the production department
- Contributes to cost containment and assists in budgeting
- Defines the calendar of operational activities
Production Scheduler: Manages and improves production performance. For this reason, it coordinates operations in compliance with the specific qualitative and financial objectives of the department.
Operational roles: there are then a series of figures who play more operational roles that come into action during specific processes. These are for example:
- Material Planner
- Machining Planner
- Production Scheduler
- Job Account Scheduler
What is the difference between production planning and scheduling?
When talking about production, the terms “planning” and “programming” could be understood as synonyms. However, they relate to two different aspects of the process.
Production planning involves more strategic choices. In fact, it allows you to determine what to produce and in what way. Instead, with production scheduling you make more operational decisions related to when to produce what.
More specifically, production planning is the process by which production is organised with the aim of meeting customer demands. Assumes to determine production requirements, resources and sequence of operations.
In the production schedule, the timing for carrying out the planned operations is established. Assign resources to operations, define setup times and establish dependencies between operations. At this stage it is also important to manage priorities and constraints.
Production planning software
Companies approach production planning in different ways.
Some opt for manual scheduling, in the sense that they do not use specific software, but at most use Excel spreadsheets to schedule and track tasks. However, this type of planning has many limitations, because it takes a long time to keep up to date and is not responsive to changes.
Coming to more advanced solutions, many companies use ERP (Enterprise Resource Planning) software. ERP is a management software that, among its functions, collects and centralises data. It is therefore a great advantage to have access to a database that is always up-to-date and shared. Although it is a very useful software for administrative departments and for business management in general, this choice also has limitations when it comes to production planning, since it does not allow the complete management of production processes.
In the current market context where changes and modifications to the supply can also take place very often, it becomes strategic to choose a specific software to plan production, so as to overcome all the limitations of the tools that are not born with this specific function. APS (Advanced Planning and Scheduling) software is specific software for planning production, which, by integrating with ERPs, enhances the ability to analyse and make decisions, adding the possibility of carrying out predictive analyses and simulations to obtain improved and reliable production plans.
CyberPlan for production planning
CyberPlan is the APS that for more than 30 years has helped manufacturing companies create optimized production plans, without wasting time and resources. The software provides the company with the best technologies to fully cover all planning processes, from sales forecasts, to simulated scenario analysis, to detailed scheduling. CyberPlan makes it possible to simplify complex decisions and lighten the work of planners, who can devote themselves to higher-value activities.
For more than 30 years, Cybertec’s mission has been to support companies in improving production processes. If you want to know more about how to improve production planning, fill out the form and one of our experts will contact you to answer your questions.