As the creation of products and services has become more extensive and varied, the manufacturing industry has become more competitive. There are many things to keep an eye on such as material requirements planning, supply chain management and inventory control. Operations continue to become more complex, and this means manufacturing companies require more thorough production planning.
A production plan is the best way to guarantee you deliver high-quality products/services as efficiently as possible.
What Is Production Planning?
Production planning is the process of deciding how a product or service will be manufactured before the manufacturing process begins. In other words, it is how you plan to manage your supply chain, raw materials, employees and the physical space where the manufacturing process takes place.
Production planning is very important for manufacturers as it affects other important aspects of their business such as:
- Supply chain management
- Production scheduling
- Material requirements planning
- Production lead time
- Capacity planning
ProjectManager is a project management software that helps manufacturers cover every aspect of production planning. Plan with Gantt charts, execute with kanban boards and manage your resources along the way. No other software offers sophisticated project and resource management features in one intuitive package. Get started today for free.
Why Is Production Planning Important?
If a manufacturing operation wishes to expand, that evolution demands careful production planning and production scheduling. Someone must take on the responsibility of managing resources and deciding how they will be allocated. This process is a big part of capacity planning—how much can be made in a certain period of time, with the available resources?
Without production planning, it is easy to use too much of a resource for one product and not leave enough for another, or fail to schedule your resources properly, which results in delays that affect your overall production management process. It’s just as easy to let resources go to waste. These issues indicate a lack of efficiency in your production planning process.
No matter the product or service or the size of the operation, production planning is the best way to ensure resources are used appropriately, products and services are high-quality and nothing goes over budget.
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Master Production Schedule Template
Use this free Master Production Schedule Template for Excel to manage your projects better.
Types of Production Planning
Every operation is unique, and the same production plan isn’t right for everyone. In order to get the most from project planning, you need to decide which method is best for your manufacturing process. That said, here’s a quick intro to the different types of production planning.
The job method is often used when manufacturing a single product, for which a unique production plan is created. This production planning method is generally used in smaller-scale productions, but it can also be applied to larger manufacturing facilities. The job method is especially advantageous when a product or service requires specific customizations.
Batch Production Method
Batch production consists in manufacturing goods in groups, instead of being produced individually or through continuous production. This method is useful when manufacturing products on a large scale.
The flow method is a demand-based manufacturing model that minimizes the production lead time by speeding up the production line. The manufacturing process starts based on work orders, and once it starts, it doesn’t stop until all finished goods are produced. This is called continuous production and it’s achieved by using machinery and little intervention to minimize waiting time.
The process method is more or less what most people picture when they think about production—an assembly line. With the process method, there will generally be different types of machinery completing separate tasks to put together the finished goods.
Mass Production Method
The mass production method is primarily focused on creating a continuous flow of identical products. It’s similar to the flow method, but at a much bigger scale, which cuts production costs. When uniformity is just as critical as efficiency, you need to use “standardized processes” to guarantee all products look exactly the same.
What Is a Production Plan?
A production plan is a document that describes how production processes will be executed, and it’s the final outcome of the production planning process. It describes the human resources, raw materials and equipment that will be needed and the production schedule that will be followed.
The person responsible for production planning must also be very familiar with the operation’s inner workings, project resources and the products/services they produce. This usually entails collaborating with people on the floor, in the field or in different departments to create products and deliver services.
How to Make a Production Plan
When you set out to create a production plan, make sure to follow these steps to make it as robust as possible.
1. Estimate/Forecast Product Demand
Understanding product demand planning is the best way to decide which product planning method is the best choice for your operation. You’ll need to use diverse sales forecasting techniques to better understand what will be the future demand for your product. From here, you’ll be able to estimate which resources are required and how they’ll be used in the manufacturing process.
2. Access Inventory
Accessing inventory is about more than simply taking stock: you should make an inventory management plan so that you don’t experience shortages or let things go to waste. For this step, focus on the inventory control and inventory management techniques you can use to handle inventory in the most efficient way possible.
3. Create a Production Budget
A production budget is a document that’s used to calculate the number of units that should be produced by a company to meet the customer demand for a period of time such as a month, quarter or even a year.
Creating a production budget involves doing an assessment of the current product inventory, the production capacity, sales forecasts and the ending inventory that should remain at the end of the time period. Once you analyze these variables and use the production budgeting formula, you’ll know what’s the required level of production for a given time period.
4. Resource Planning
A successful production plan requires you to be familiar with the resource planning details of the manufacturing process. Note the minimum number of people and raw material requirements necessary to create a product or execute a service. You need to also consider what machines and systems are essential for executing your production plan.
5. Estimate Production Costs
Once you’ve determined what the required level of production is and the resources that will be needed, you’ll need to estimate the cost of production. It’s important to make sure the production process will be profitable before creating a production schedule.
6. Create a Production Schedule
Now it’s time to create a production schedule based on the sales forecasts, production capacity and production budget that you’ve outlined. Making a production schedule is key to making sure your manufacturing team delivers products on time, but also guides efforts in other areas such as supply chain management and logistics management.
7. Production control
As production takes place, monitor how the results compare to the production schedule and resource management projections. This is something that should continually take place and be documented during the production process. Production control is especially important for the fifth step in the production planning process.
8. Adjust the Plan to Make Production More Efficient in the Future
The final step of production planning is to reflect on the information you gained in step four and strategize what can be done to make the production plan run more smoothly in the future. Production planning is about manufacturing a product or service, yes, but it should also be a learning experience for creating even better production plans for next time.
Production Schedule Template
This free production schedule template helps you keep track of the status of your production orders, starting and ending production inventories, due dates and more.
Common Production Planning Mistakes
As you go through the production planning process, you must stay vigilant of common missteps. Here are three mistakes often made during production planning. Luckily, they can be prevented.
Not Expecting the Unexpected
This means having risk management strategies in place if things go awry. The goal is to never have to employ them, of course, but it’s better to have them and not need them. Production planning is not complete if it doesn’t anticipate risks, issues and changes. When you plan for them, you’re ready to problem solve if and when they happen.
Getting Stuck Behind the Desk
You should work with intelligent production planning tools, but that doesn’t mean you should only rely on enterprise resource planning software for production planning and not oversee resources and manufacturing operations in person. When production planning is only done from behind a screen, the end result will not be as informed as it could be. The best production planning is active and collaborative.
Regardless of the product or service, manufacturing means using tech. In order to get the most from your equipment, you need to take care of it. This means tracking usage and keeping up with regular maintenance. This looks different depending on the industry and product or service, but the principle is the same: continually take care of your equipment before it becomes a problem that will slow down production.
Production Planning Best Practices
No matter what product or service is being manufactured, there are many tried-and-true best practices to increase your operational efficiency. When creating a production plan, keep these two in mind.
Make Accurate Forecasts
When you don’t properly estimate the demand for your product or service, it is impossible to create a detailed production plan. Demand planning is never static. You need to consider buying trends from previous years, changes in demographics, changes in resource availability and many other factors. These demand planning forecasts are the foundation of skillful production planning.
Know Your Capacity
Capacity planning means knowing the maximum capacity your operation can manage—the absolute most of a product or service it can offer during a period of time. This is the only way to anticipate how much of each resource you will need in order to create X amount of products.
When you don’t know the production capacity, your production planning is like taking a shot in the dark.
Use ProjectManager for Production Planning and Scheduling
As the nature of manufacturing goods and services changes, you need modern tools to plan production and make schedules. ProjectManager is an award-winning project management software that offers all the tools you need for excellent production planning and scheduling. With it, you can plan projects, create schedules, manage resources and track changes with one tool.
Plan with Gantt Charts
Manage your product manufacturing across a timeline with our Gantt chart view. With it, you can view your resources to help you track your cost of production to make sure you’re never overspending. You can then link any dependent tasks to avoid bottlenecks in your manufacturing.
Get a Birds-Eye-View
To keep your production plan on track, you need to have a high-level view so that you can pinpoint setbacks before or as they occur. Our real-time dashboard collects your data and converts it into colorful graphs and charts that give you at-a-glance analytics.
Easily Measure and Report Your Progress
Any operation will have stakeholders, and they want to be kept in the loop. ProjectManager’s project status reports make it easy to share key data points. They can be generated in a single click, making it simple to generate them before important meetings.
Related Production Planning Content
- Production vs. Manufacturing
- How to Make a Production Flow Chart for Manufacturing
- Production Schedule Template
- How to Create a Master Production Schedule (MPS)
- Production Schedule Template
Manage every detail of your operation with ProjectManager’s powerful cloud-based project management tools. Our suite of tools is trusted by tens of thousands of teams, from NASA to Volvo, to aid them in the planning, scheduling, tracking and reporting on the progress and performance of their production plans. Our software makes lets you get out from behind your desk and make adjustments on the go. Try it for yourself for free for 30 days!