Production planning is a process, the purpose of which is to organize the production activity so that it is consistent with the business plans that define the economic and financial objectives of the entire company. Production planning in manufacturing companies is therefore concerned with defining production plans or programs and therefore with establishing what, how much and when to produce with different levels of detail, different time horizons and simulation possibilities.
What is production planning
Production planning is a complex process that is carried out by manufacturing companies to organize their production department and to plan production for the more or less near future. This process involves several business functions, numerous resources and tools to think about forecasts that vary from the short to the long term and is also known as production planning.
The production planning process can be divided into two parts: planning and scheduling. The planning in turn can be divided into a tactical one and an operational one, as evidenced by the Hax and Meal Hierarchical Production Planning or HPP model of 1975. Production scheduling deals with programming at the execution level.
The elements that make up a production plan can be divided into two parts: the Master Planning (which includes the aggregate production plan, also called Sales & Operations Planning, and the Main Production Plan or Master Production Schedule with the related feasibility checks) and Detailed Planning (consisting of MRP, or Material Requirements Planning, and production scheduling).
A characteristic of the production planning process is its cyclical nature whereby the same period is the subject of several successive plans with increasing degrees of definition.
Who is involved in production planning
The roles involved in the production planning process are different, and each with its own tasks and responsibilities:
- Production manager – is the one who plans and coordinates the production activity of an organization with the aim of increasing productivity levels. The production manager has the most complete view of the production department and is the link between the various departments. Usually its tasks are to plan and ensure the realization of the production phases based on the needs of the commercial functions (deciding the times and methods), coordinate warehouses and logistics (monitoring stock levels), check the status of machinery and equipment , organize and manage human resources in the production department (in relation to the production plan),
defines the operational calendar (on the basis of which all the sectors organize the activities, the times and the resources to be used). - Production Planning Manager – is the one who plans production activities, from Demand Planning to detailed scheduling, ensuring the achievement of objectives. The main tasks of the production planning manager are to maintain and improve the performance of the production process. Mainly it deals with defining the productivity, quality and work organization requirements, guaranteeing the validation and monitoring plans of tools, machines, plants and processes, planning production, managing the procurement of raw materials and semi-finished products and finished products, perhaps through the use of a DDMRP solution.
- Planners – those who concretely deal with the realization of production plans and which in turn can be divided, depending on the area of competence, into: Materials Planner, Processing Planner, Production Planner, Subcontracting Planner and so on.
Why is production planning useful?
Production planning is an indispensable process for companies of a certain size and for those who want to take a significant step towards a greater and better organization. Correct production planning allows you to obtain numerous advantages, including:
- Check the status of production resources and implement them in time if necessary
- Launch orders for the procurement of materials by making them arrive at the right time
- Keep stocks of raw materials and finished product stocks at a minimum
- Establish reliable delivery dates well in advance
- Govern the plants producing what you need when you need it with maximum efficiency
- Avoid bottlenecks and queues of materials waiting within the production flow
- Respect the delivery dates communicated to customers and reschedule them if necessary
- Make entries for new, unscheduled rush orders
The risks of production planning
The main risk that can be incurred, in the planning of production, is that of using inappropriate tools and in particular Excel spreadsheets, which give the temporary illusion of being able to plan without expenses, but present hidden costs and risks, due to technical constraints of the product that cannot be overcome. We explain these dangers in the article 5 risks of planning production with Excel. Other risks may be that of not having up-to-date data, of not having visibility of what is happening in the various departments or of having software that is not able to take into account the constraints. The most advanced tools able to overcome these problems are APS, or software for Advanced Planning and Scheduling.
CyberPlan and production planning
CyberPlan, Cybertec’s APS, presents itself as the best of these tools, thanks to the most modern technologies used and over 30 years of experience serving Italian and foreign supply chains. The companies that replace the numerous Excel with CyberPlan, have found numerous advantages in a short time, such as:
- Increase of the service level up to 33%;
- Stock reduction up to 50%;
- Productivity increase up to 10%;
- ROI within the year.
These benefits are possible thanks to Cybertec’s strong investments in R&D and innovation, and above all thanks to the close collaboration with hundreds of Italian and foreign companies, from small businesses to large multinationals. This commitment has allowed us to create complete, powerful and simple solutions that are used effectively all over the world.
How to improve production scheduling and increase factory efficiency?
Contact our experts who will be happy to answer your questions and advise you on how to improve the way you plan and schedule production today thanks to a software solution for production scheduling. Request a demo of CyberPlan, one of our professionals will answer your questions and support you in understanding how powerful tools like CyberPlan can support you and your company.