Production Planning Steps

by Bradley James Bryant; Updated September 26, 2017

Production planning is the lifeblood of any manufacturing company. It involves finding the delicate balance between satisfying customers and managing suppliers. A company can have a dynamic business model and waste hours of time and dollars on redundant processes. While no two production plans are alike, mapping out the process is a common way production engineers look for areas of opportunity.

Map the Process

From sales and marketing to research and development, the product cycle is the most critical process in a manufacturing firm. Sales and marketing need to know the timing of additional output, targets and estimated lead times for customized orders. Operations identifies the necessary resources and procurement finds the best prices. The result is an effective production plan with three major steps: buy at the lowest price for the best quality, produce the best quality using an optimal level of manpower, and sell materials at a higher price than cost. The better a manufacturing company is at these three things, the more successful it will be.

Look for Value Opportunities

Form a process engineering team to analyze and create process flow diagrams for all major processes in the production cycle. Look for common and/or redundant processes. Depending on the type of business, you may want to segment your product groups. Determine if certain product groupings are easier to forecast in terms of sales. See what trends you can find by looking at the data from different perspectives.

Capacity Planning

Focus on capacity planning. This is the process of identifying resources. Capacity Planning, as a department, is usually the group that must create the balance discussed in the introduction. At some point, depending on your sales cycle, customer orders must be replaced with forecasts and accuracy becomes a primary concern. Determining capacity is a function of historical trends and information about production development cycles. Timing is critical since bottlenecks can have future effects and require additional manpower; that is, bottlenecks are not static. The right system will look for opportunities to extend both capacity and queue time. Creating this bubble can greatly increase operational flexibility and responsiveness to changes in the demand cycle.

About the Author

Working as a full-time freelance writer/editor for the past two years, Bradley James Bryant has over 1500 publications on eHow, LIVESTRONG.com and other sites. She has worked for JPMorganChase, SunTrust Investment Bank, Intel Corporation and Harvard University. Bryant has a Master of Business Administration with a concentration in finance from Florida A&M University.