Every company, to maximize its productivity, will need a good production plan. One thing to keep in mind is that it is a complex process to execute effective planning. This process covers many different activities to ensure that equipment, human resources and materials are available where and when they are needed. Production planning can be described as a roadmap that will help your business know where you are going and how long it will take to get there.
Advantages of production planning
• Eliminate wasted time
• Reduces labor costs
• Improves process flow
• Reduces inventory costs by greatly reducing work-in-progress inventories and the need for safety stock
• Increases capacity and optimizes equipment usage
• On-time deliveries of services and products are improved
Key factors of production planning
• Market expectations: In order to plan effectively, your business must be able to estimate potential sales. Most companies will not have a firm number for future sales, but should be able to forecast sales based on established order or market trends.
• Inventory Control – A business must have a robust inventory system along with establishing a reliable inventory level.
• Availability of human resources and equipment: Good production planning will help a company manage its open time, which is the period of time allowed between processes. This time will allow all orders to move smoothly within the service or production line. It means that you will have enough employees to work on the production line so that the products that customers need are available. It is not a good idea to plan the total capacity on the production line. The company must leave room for any changes and unexpected priorities.
• Standardized time and steps in the progress map: the company must map the processes as they happen to determine the production steps to complete the work. Then, they will need to enter the approximate time it took to complete the job. The company must remember that many of the steps can happen at the same time and often do not happen in sequence. Once the business completes the process map, it will help them understand how long it took to complete the process. Standardizing the time and labor involved in doing similar or repeated work will help speed up the business planning process significantly.
Production planning must also address certain key elements prior to production to ensure uninterrupted workflow. They must ensure that the necessary material is ordered so that it is available when needed. If any special equipment is needed, they should be purchased in advance, especially if it needs to be installed. The company must ensure that its employees are trained on any new equipment.