Production Plan

Production planning, often known as a production plan, determines an overall output level. The procedure includes any actions required to fulfil expected sales levels while satisfying the firm’s overall business plan targets for profit, productivity, lead times, and customer happiness.  

Production planning’s managerial goal is to create an integrated game plan in which the operations element is the production plan. As a result, this production plan should relate the firm’s strategic goals to operations (the production function) and synchronise operations with revenue targets, material availability, & financial budgets.

What is the Production Planning Process?

In addition to the actual production schedule, the production-planning process needs a comparison of sales objectives and productive capacity. It also requires the inclusion of budgets, pro forma financial statements, and supporting plans for materials and personnel requirements. 

The production plan’s primary goal is to generate output rates to meet management’s goal of meeting consumer demand. One can achieve demand satisfaction by maintaining, increasing, or decreasing inventories or backlogs while retaining a reasonably stable workforce. If the company has adopted a just-in-time attitude, it will employ a chase strategy to meet client demand while keeping stockpiles to a minimum.

Production planning is critical for manufacturers since it influences so many other parts of their business, including:

• Management of the supply chain
• Scheduling production
• Planning for material needs
• Lead time for production
• Planning for capacity

What are the Key Factors of Production Planning and Control?

Here are the critical factors of production planning and control.

• Forecast market expectations

To plan well, you’ll need to predict anticipated sales with some accuracy. The majority of businesses do not have firm sales projections for the future. You can, however, forecast sales based on historical data, market trends, and existing orders.

• Availability of human resources and equipment

Production planning aids in the management of open time, ensuring that it is well-utilised while avoiding delays. Planning should optimise but not surpass your operating capacity. It is also a good idea to avoid planning for maximum capacity and make room for unforeseen priorities and adjustments.

• Inventory management

Maintaining reliable inventory levels feeding the pipeline and a robust inventory system is necessary.

• Availability of equipment and human resources

Production planning aids in the management of open time, ensuring that it is well-utilised while avoiding delays. Planning should optimise but not surpass your operating capacity. It’s also a good idea to avoid planning for maximum capacity and make room for unforeseen priorities and adjustments.

• Standardised steps and time

The most efficient method for determining your production stages is to map processes in the order they occur, then factor in the average time it took to accomplish the work. Remember that one need not complete all procedures in order; several may coincide.

What are the Different Types of Production Schedules?

Every business is different, and the same production strategy won’t work for everyone. It would help if you first decided which system is ideal for your manufacturing process to get the most out of project planning. 

Therefore, here is a quick rundown of the various sorts of production planning.

• Job method: 

It is common to use the job method when producing a single product with a unique production plan. 

This form of production planning is most widely utilised in smaller-scale enterprises, although it can also help bigger manufacturing plants. When a product or service requires unique changes, the task technique is advantageous.

• Production in Batches: 

Batch production refers to items in groups rather than individually or in continuous production. When producing things on a huge scale, this strategy comes in handy.

• Method of Flow: 

The flow method is a demand-driven manufacturing methodology that reduces production lead time by speeding up the manufacturing line. 

The manufacturing process begins with work orders and does not end until the production of finished goods. This procedure is known as continuous manufacturing. One can accomplish it through the use of machinery with minimal human intervention to reduce waiting time.

• Method of Procedure: 

The process approach is similar to what most people envision when manufacturing: an assembly line. Different machines will often complete various tasks to assemble the finished goods using the process method.

• Method of Mass Production: 

The primary goal of mass production is to produce a constant stream of identical products. It works the same way as the flow method but is much larger, lowering production costs. When uniformity is as important as efficiency, “standardised processes” must be used to ensure that all products are the same.

Conclusion

In the above notes, we have learned about the production plan. 

One of the essential steps in processes in supply chain management is production planning. A firm’s production plan considers the overall picture rather than the level of each product or item, projecting a level of manufacturing output based on expected sales and other organisational goals and restrictions. 

This chapter is one of the most important in business studies for the CBSE class 12 board examination. It is advisable to go thoroughly through the notes to understand the concept.