To stay competitive, manufacturing companies engage in production planning, the systematic design of production processes in order to achieve the greatest possible efficiency and productivity. If a company implements an effective production planning system, it can produce products more quickly and precisely, and at a lower cost. Production planning systems generally share a set of common objectives.
TL;DR (Too Long; Didn't Read)
The objectives of production planning include:
- Analyzing the Market and New Products
- Minimizing Production Time
- Reducing Costs
- Using Resources Efficiently
- Improving Customer Satisfaction
Analyzing the Market and New Products
Before a company invests limited resources in the production of a new product, it must first find out whether a market exists for that product. While market research is part of effective production planning, it’s also an objective of the planning process. By analyzing a new market, the proposed product and its manufacturing lead time, the company can better marshal its raw materials and workforce to maximize productivity and minimize the disruption to the company’s other product lines and teams.
Minimizing Production Time
Another essential goal for production planning is making sure production is completed in as little time as possible. This helps free up corporate resources for additional production lines. To improve efficiency, production managers use a variety of tools, such as the Gantt chart. Gantt charts are simple visual timelines, or calendars, that show multiple tracks, or projects, at a glance. This approach lets businesses simultaneously view and track multiple needs and goals. Gantt charts can be created using Excel or other spreadsheet programs, as well as specialized software.
Gantt charts and similar tools help production planners figure out the most efficient times to start and end each part of the production schedule. These tools also help you identify when specific production tasks experience natural down periods. That, in turn, helps busy production managers utilize their resources to full capacity, thereby increasing the company’s productivity and efficiency.
By using sound supply chain management, or SCM, principles in their production planning efforts, companies can ensure a leaner approach to production and shipping. The principles of lean manufacturing are increasingly popular with managers who rely on just-in-time inventory methods that rely heavily on interaction with suppliers and transparency throughout the supply chain. Efficient supply chain management and scheduling helps reduce a manufacturer’s costs by making sure raw materials are delivered just in time to meet production and delivery needs.
Using Resources Efficiently
Another goal of production planning is maximizing the efficient use of a company’s resources. One way production planners accomplish this goal is through capacity requirements planning. CRP is a method of minimizing the amount of raw materials inventory a company keeps on hand to just what’s needed at a given time. In a sense, CRP works in tandem with supply chain management to help make sure there are exactly enough resources on hand when needed – neither too many (CRP) nor too few (SCM). By employing both strategies, a manufacturer can reduce the costs associated with inefficient allocation of company resources.
Improving Customer Satisfaction
Finally, production planning seeks to increase the level of customer satisfaction and improve the overall customer experience, albeit in a slightly indirect way. Production planning creates a leaner, more cost-efficient production system. When a company fully implements that improved production system, it minimizes product defects and streamlines production times. As a result, the company can make improved, more reliable products at lower prices and get them into the hands of its customers more quickly.
By being more responsive to its customer’s desires and needs, a company implementing production planning becomes more vital to its market and improves its bottom line as a result.
Annie Sisk is a freelance writer who lives in upstate New York. She holds a B.A. in Speech from Catawba College and a J.D. from USC. She has written extensively for publications and websites in the business, management and legal fields.