Production Planning Techniques

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Production is an art and a science. Done well, it can make your operations smooth and your business profitable. Done poorly, it can cause ongoing headaches for staff and customers. Production planning techniques help you to facilitate work flow and make sure that work is performed on time and according to specifications. This process benefits the company, its customers and its employees, creating a beneficial feedback cycle.

Production Scheduling Techniques

Production scheduling involves coordinating the logistics of the manufacturing process so work is completed on schedule while wasting as few resources as possible. To schedule production effectively, you first need to make sure you have all of the materials you need to proceed. If you're missing the items you need to complete a particular step in the process, you may end up shutting down your entire production operation until they arrive because other steps may depend on the one that cannot be completed.

You must also have personnel scheduled effectively for your production to proceed smoothly. There should be enough staff on the floor for each stage in the process, and they must be trained and skilled to perform the work that needs to be done. Although you must have enough employees scheduled to get the job done, you should also avoid scheduling too many because this is a waste of resources, and having too many workers on-site can actually cause congestion and interfere with productivity.

Your production scheduling should also cover the equipment necessary to perform manufacturing tasks. Machinery that is shared by different parts of your operation should be available when it's needed for a particular process, and maintenance should be scheduled so it is in good working order. If equipment is shared among different departments or for production of different product lines, managers and schedulers should communicate to make sure there is no overlap or competition for resources.

Master Production Scheduling

Production planning involves logistics specific to manufacturing, such as orders, inventory and availability of personnel. However, your production planning occurs within the larger context of scheduling and planning for your entire company. Master production scheduling is a long-range approach to planning that integrates the timing for manufacturing each product into a larger plan that also takes into account product mix, capacity and availability of raw materials.

For example, your business may be working on a long-term plan to phase out some product lines that show consistent demand but earn relatively low margins. Rather than discontinuing these products all at once and alienating the customers who depend on them, you may instead choose to do a production run that uses up materials inventory devoted exclusively to these products, such as custom-printed packaging.

Your master scheduling plan might look for an opportunity to complete this production during a time of year when seasonal demand for other products typically declines. This will allow you to absorb excess staffing capacity and also use extra capacity on your production line while using up materials you would otherwise discard. This approach would also benefit loyal customers, giving them fair warning and an opportunity to shop around for a replacement product rather than cutting them off all at once.

Implementing Detailed Scheduling

Detailed scheduling, or manufacturing scheduling, gets down to planning and scheduling week by week, day by day and even hour by hour. This process works in tandem with master scheduling, filling in the details and working out the logistics of what will get done and when it will take place within the longer-term schedule that has been set.

Unlike master scheduling, which creates broad timelines over an extended period, detailed scheduling syncs with specific orders. These include both customer orders to be fulfilled and inventory orders that must be on hand before manufacturing can commence. Because it is nearly impossible to know many of these details far ahead of time, detailed scheduling works to connect puzzle pieces as specifics unfold.

Detailed scheduling is especially critical with a lean or just-in-time production orientation, which is based on agile adaptations and skillful timing to make the most of both material and human resources. To practice lean manufacturing effectively, your business must plan its inventory purchases and employee schedules with an eye toward throughput, or filling specific orders as they arrive, while minimizing bottlenecks.

Forecasting Techniques for Production Planning

Forecasting is necessary for effective production planning because it gives you the necessary information to create action steps. Of course, there is no way to forecast future orders with complete certainty. However, these techniques of production control can help you develop as complete and accurate a picture as possible of how much you will need to produce and when you will need to produce it.

  • Forecasting orders. If you can forecast upcoming orders reasonably closely, you can have the materials on hand and the necessary staff scheduled to meet demand. Order forecasts can be based on seasonal fluctuations and patterns from previous years. They may also be tied to planned promotions that will foster interest in your products.

  • Forecasting staff. Staffing forecasts depend on order forecasts. Having a reasonably accurate idea of how much you will need to produce during an approaching time frame will allow you to calculate how many staffing hours are necessary to get the job done and to make sure that the necessary personnel are scheduled.

  • Forecasting production time. The better you understand your manufacturing processes and the amount of time they take, the better you'll be able to keep your customers satisfied by creating realistic expectations for order delivery. Base timeline forecasts on past performance and factor in variables such as improved processes or supply chain difficulties.

Forecasting Inventory Process

If you have the inventory you need on hand, you'll be able to start production right away once your customers place their orders. However, having too much inventory on hand can tie up working capital that you may need for more urgent expenses, such as rent and payroll. In addition, if you make large inventory purchases and your customers' order patterns don't sync with your forecasts, you may waste money and get stuck with items you can't use.

A just-in-time approach to inventory planning involves cutting it close and ordering as late as possible relative to when you need to have the items in stock. This approach has many advantages, such as reducing waste and improving efficiency. However, it takes skill and practice to truly understand the rhythm of orders and purchasing. It is sometimes better to have some extra inventory on hand to avoid running out than to risk running your stock down too low and missing the opportunity to fulfill an important order.

The process of forecasting inventory will depend on the time it takes between ordering and receiving a particular material and also whether that item is available from multiple sources. You have a lot more flexibility with a part or component that you can order one day and receive the next than with one that takes several weeks to arrive. In addition, if you can only get a critical item from a single vendor, you should order extra proactively, keeping with that vendor's delivery timeline.

Planning Your Personnel

Unlike your inventory and your machinery, your workers have personal lives that they need to coordinate with their work schedule. You need to plan when to schedule worker hours for optimum production efficiency, and your workers need to know their schedules so they can plan how their work hours will integrate with their family obligations and recreational needs.

In theory, it would be most efficient for your business to wait and see what orders come in and then plan employee schedules at the last minute to avoid short staffing and redundancies. In practice, however, your employees need advance notice and some degree of consistency so they can plan their nonwork activities and count on your company for a reliable income.

If your business needs to have employees available and ready to work when important orders arrive, it makes sense to find other tasks for them when work is sparse, such as making infrastructure improvements or building skills and knowledge. This approach will cost you extra money in the short term because you'll be paying for hours that aren't strictly tied to current production. However, the benefit of having a trained staff that is ready to work may easily outweigh the short-term expense.

The Big Picture

Your approach to production planning will depend on your company's longer-term and bigger-picture objectives.

  • Customer service. If your company takes special pride in going the extra mile to meet customers' needs, your production planning orientation will focus on being able to pivot when an urgent order comes in or reconfigure for special circumstances. In this case, your production planning will depend on building flexibility into your systems so you can make these changes when necessary.

  • Profitability. If your business is geared toward cutting costs and maximizing profitability, your production planning will emphasize efficiency. Whether this takes the form of following lean manufacturing principles or building up finished inventory when you have the capacity, you should gather data diligently and continuously to assess whether you are meeting your financial goals.

  • Lifestyle choices. You may choose to organize your production planning to maximize quality of life for your employees. This approach makes particular sense for a worker-owned company. Even if you plan your processes with an eye toward interfacing work processes with employee personal needs, you'll still need to make a profit, or you won't be able to sustain this approach over the long term.

Benefits of Production Scheduling

Effective production scheduling makes your business run more smoothly and profitably. When this planning is done well, your staff will have the materials they need to work efficiently without unnecessary down time from supply chain interruptions or overlapping demand for equipment. Your bottom line will benefit from the reduced waste, especially in personnel costs, as your activities are more carefully coordinated.

Your customers will also be happier if you do a good job of scheduling your production routines. They'll receive their orders on schedule with fewer wild cards due to missed deadlines and costs due to inefficiency that you may pass along. Satisfied customers lead to repeat orders, making your business more profitable overall.

Production planning also benefits your employees, who can count on more predictable schedules. Advance planning and notice without unwelcome surprises make it easier for them to coordinate their job responsibilities and personal lives, and smooth production runs prevent unnecessary, unscheduled overtime that interferes with family time. Effective production scheduling can even lead to higher pay if your company becomes more profitable and opts to invest in its workforce and increase retention of skilled and experienced personnel.

References

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.