What Is Production Planning, Why Is It Important and how to do it?

Production planning and control are the manufacturing support systems concerned with logistics problems within the production function. Production planning is anxious with planning what products are to be produced, what quantities, and when.
It also considers the resources required to accomplish the plan. Production control determines whether the resources to execute the plan are provided and, if not, takes the required action to correct the deficiencies.
The problems in production planning and control are different for various types of manufacturing. One in all the important factors is that the relationship between product variety and production quantity. At one extreme is job shop production, within which different product types are each produced in low quantities. The products are often complex, consisting of the many components, each of which must be processed through multiple operations. Solving the logistics problems in such a plant requires detailed planning—scheduling and coordinating the massive numbers of various components and processing steps for the various products.
At the opposite extreme is production, during which one product (with perhaps some model variations) is produced in very large quantities (up to scores of units).
The logistics problems in production are simple if the merchandise and process are simple. in additional complex situations, like the assembly of automobiles and major appliances, the merchandise is an assembly consisting of the many components, and also the facility is organized as an assembly line. The logistics problem in operating such a plant is to induce each component to the correct workstation at the correct time so it will be assembled to the merchandise because it passes through that station. Failure to unravel this problem may end up in stoppage of the whole line for lack of a critical part.
To distinguish between these two extremes in terms of the problems in production planning and control, the design function is emphasized in a very job shop, whereas the control function is emphasized in production of assembled products. There are many variations between these extremes, with accompanying differences within the way production planning and control are implemented.
The activities are often divided into three phases:
(1) aggregate production planning,
(2) detailed planning of fabric and capacity requirements, and
(3) purchasing and workplace control. Our discussion of production planning and control during this section is organized around this framework.


Any manufacturing firm must have a business plan, and also the plan must include what products are produced, how many, and when. The manufacturing plan should take into consideration current orders and sales forecasts, inventory levels, and plant capacity. The mixture production plan indicates production output levels for major product lines instead of specific products. It must be coordinated with the sales and marketing plan of the corporate. Aggregate planning is therefore a high-level corporate planning activity, although details of the look process are delegated to staff. The combination plan must reconcile the marketing plans for current products
and new products under development against the capacity resources available to make those products.
The planned output levels of the foremost product lines within the aggregate schedule must be converted into a selected schedule of individual products. This can be called the master production schedule (or master schedule, for short), and it lists the products to be manufactured, after they should be completed, and in what quantities.
Three categories of things are listed within the master schedule:

(1) firm customer orders

(2) forecasted demand, and

(3) spare parts.

Customer orders for specific products usually obligate the corporate to a delivery date that has been promised to a customer by the business department. The second category consists of production output levels supported forecasted demand, within which statistical forecasting techniques are applied to previous demand patterns, estimates by the staff, and other sources. The third category is demand for individual component parts—repair parts
to be stocked within the firm’s service department. Some companies exclude this third category from the master schedule because it doesn’t represent end products.

The master production schedule must consider the lead times required to order raw materials and components, fabricate parts within the factory, then assemble and test the ultimate products. Looking on kind of product, these lead times can run from several months to quite a year. it’s usually considered to be fixed within the near term, meaning that changes aren’t allowed within a few six-week horizon. However, adjustments within the schedule beyond six weeks are possible to deal with shifts in demand or new product opportunities. It should therefore be noted that the mixture production plan isn’t the sole input to the master schedule. Other drivers that may cause it to deviate from the mixture plan include new customer orders and changes in sales over the near term.

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