Production Planning Overview

Study Notes

Production planning involves decisions about the resources needed for manufacturing operations, selecting these resources to produce goods at the right time and cost.
Key objectives include:
- Determining workforce, material, and equipment requirements.
- Arranging production schedules based on market demand.
- Coordinating various production-related departments
- Achieving cost and time economy in production.
- Ensuring efficient plant operation.
- Meeting production targets on time.
- Maintaining adequate stock for contingencies.

Master Production Schedule (MPS): Defines the start time, quantities, and products for production runs. Aims to ensure on-time delivery and minimize overstock.
Materials Requirement Planning (MRP): Ensures raw material availability, maintains low inventory levels, facilitates inventory control, and aids in planning purchasing activities.
Capacity Planning: Determines the production capacity required to meet customer orders and changes in demand. Balances expenses and resources with demand and supply.
Workflow Planning: Defines the sequence of operations performed during the production process. Tracks work progress, assigns responsibility, and helps monitor task status.

Production control directs the flow of production to ensure goods are manufactured efficiently, on schedule, and to the required quality.
Key objectives include:
- Implementing production plans by issuing orders.
- Ensuring the availability of inputs.
- Meeting production deadlines.
- Maintaining production standards and quality norms.
- Implementing cost-effective production policies.
- Establishing a quality control system.
- Minimizing inventory of raw materials and finished products.

Production planning and control coordinates various functions to ensure efficient use of plant facilities and smooth movement of goods through the entire manufacturing cycle (from material procurement to finished goods shipping).
Key characteristics:
- Planning and control of a manufacturing process.
- Determining what to manufacture, when to manufacture it, etc.
- Efficient use of all inputs to maintain manufacturing process efficiency.
- Integration of production factors to achieve efficiency and cost-effectiveness.
- Work center workload management to avoid overworking or underworking any area.
- Regulation of work from raw material acquisition to finished goods.

Enhanced Material Procurement: Accurate sourcing and allocation of materials.
Improved Production Time: Proactive identification of potential problems and bottlenecks to meet deadlines and demands.
Reduced Production Costs: Efficient and effective use of resources due to well-planned and monitored production.
Minimized Resource Waste: Optimal inventory levels and minimized discrepancies between supply and demand, reducing waste.
Streamlined Production Process: Enables identification of inefficiencies, prevents delays, and supports growth opportunities.

Assumptions: Planning relies on assumptions; if proven incorrect, planning and control effectiveness can be compromised.
Rigidity: Pre-determined plans can lead to rigidity in employee behavior, potentially inhibiting smooth workflow.
Difficult for Small Firms: Time-consuming and costly to implement, particularly challenging for small businesses.
Costly: Requires dedicated personnel for planning, dispatching, expediting, etc., making it cost-prohibitive for small businesses to utilize specialists.
Dependence on External Factors: External factors, such as natural disasters, technology changes, or government regulations, can reduce effectiveness.

1. Planning: Defines materials, workforce, manufacturing techniques, resources, and other initial details needed for production, ensuring efficient resource utilization and clear production schedules.
2. Routing: Determines the path goods take from raw materials to finished products. Specifies the most efficient sequence of operations and identifies machines used in each step. Ensures continuity and addresses potential bottlenecks.
3. Scheduling: Manages the timing element of production. Establishes the order and timing of production tasks, including start and end times.
4. Loading: Determines the appropriate workload distribution among employees and machines based on their capacity.
5. Dispatching: Implements the plans created in previous steps. Can be centralized (orders from a specific authority) or decentralized (instructions from each involved unit).
6. Expediting: Also known as follow-up, this step evaluates the effectiveness of the entire production process. Compares initial plans to actual production results.
7. Inspection: Ensures consistent implementation of planning and control methods. Regular or random inspections reinforce quality assurance and strengthen the company's reputation.
8. Correction: Identifies areas for improvement and makes changes to the production process. Enables businesses to constantly enhance their planning and control techniques.