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The cross-functional process of devising an aggregate, family-level plan for a month or quarter based on management targets for production, sales and inventory levels. It meets operating requirements for fulfilling basic business profitability and market goals, and provides the overall desired framework in developing the master production schedule and in evaluating capacity and resource requirements.
Its a function of setting the overall level of manufacturing output (Production Plan) and other activities to best satisfy the current planned level of Sales (Sales Plan and/or Forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc., as expressed in the overall Business Plan.
The Sales and Production capabilities are compared and a business strategy that includes a production plan, budgets, pro-forma financial statements, and supporting plans for materials and work force requirements, etc., is developed.
Production planning is probably the least understood aspect of Manufacturing Planning and Control Systems, but the benefits gained from a well designed and executed Production Planning system are enormous.
One of Management's objects should be to develop an Integrated "game plan" for the Company of which the manufacturing portion is the Production Plan.
The Production Plan provides the primary communication link between Top Management and Manufacturing and becomes the basis for focusing the manufacturing resources.
Production Planning should precede and drive other Manufacturing and Planning Systems.
Inputs to the plan are primarily demand management.
Your Production Plan should project out into the future at least as far as the lead time to significantly change your capacities.
When should the Production Planning Process be Implemented?
Normally, this process in implemented during an implementation of an MRP II project. However, if you are currently not using Production Planning and are not just about to embark on an MRP II implementation project, their is no need to wait, you can start today.
How to go about implementing a Production Planning system
The first thing to do is to set up a Production Planning Committee. This must consist of top executives from the Company with responsibilities in Marketing, Manufacturing, Materials, Operations/Logistics, Master Scheduling and be chaired by the Managing Director. This team should meet on a monthly basis with a fixed agenda.
A typical Agenda could be in the form:-
1. Minutes of the previous meeting
2. Previous months performance against plan
3. The proposed Production Plan
4. Marketing comments on demand
5. Manufacturing comments on supply
6. Material comments on Inventory Levels
7. Agreements on the plan 8. Date and time of next meeting
What data is required to construct the Production Plan?
Categorize your products and determine units of measurement.
Aggregate monthly sales, production and month end inventories.
Forecast expected demand.
Plan available capacity, days to be worked, hrs available etc.
Constructing the Plan
Tracking the Plan
An Improved Planning System
The Arrisals Plan
The Resource Requirements Plan
CONCLUSION
Production Planning is an essential part of MRP II and must precede all other Planning and Control Systems.
It is not essential to have an MRP II system running before you can start Production Planning.
If you are running an MRP system and you are not Production Planning, then you can not class yourself as an MRP II Class of user.
You don't need sophisticated systems to start Production Planning and spreadsheets are more than adequate as a starter.
The Production Plan provides a "game plan" for the whole Organization and authorizes employees to buy, sell, stock and manufacture up to the agreed levels.
The Production Plan provides management with their handle on the Business. They are only alerted and are required to make an input if the plan is not being achieved.
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