Production planning is the comprehensive process of planning the production of goods in a manner which produces the least amount of Downtime / highest plant up time, highest FTT rate, waste and makes sure customers receive their goods on time within the specified lead time. The aim is to produce products efficiently by managing production costs, inventory control and inventory costs, available capacity also allowing a smooth operation of the production process. This can also apply to the delivery of services to customers in service oriented industries.
Production planning requires a cross functional approach, this simple but highly important characteristic is sometimes missed by many organizations by allowing their sales & distribution departments dictate the production schedule with little input from the manufacturing and engineering/maintenance department.
An efficient production planning process has the following inputs:
-Raw material stock and availability
-Market Demand and projected sales volumes
-Availability of resources such as labour and tools
-Current Inventory levels including Work in progress
-Capacity and limitations of the production process
-product shelf life
The production planner must collect input data and balance these inputs by managing the interest of different departments appropriately in order to make sure the customer's demands are met on time and in full. The EOQ inventory management model uses these inputs.
The production planner shall liaise with the following departments effectively in order to contribute the efficient operation of the production process and organization:
-Sales and Marketing; this department will provide a view on what products and services are needed, when they are needed and in what specification.
-Manufacturing; this department makes the products or delivers the services, they will know the plant and its capacity very well including optimal running conditions, potential bottlenecks and best changeover scheduling.
-Engineering/maintenance department; this department is usually in charge of providing technical support and maintaining the plant in optimum running condition. In order to achieve this they need to know when the plant will be down and for how long as accurately as possible in order to organize any maintenance activities. Production planning is sometimes, and should be included in strategic planning
All of these stakeholders will have different needs and objectives, which makes the production planning process a complex one.
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