Production planning, all about it and how to optimise it
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Production planning, all about it and how to optimise it

Production planning all about it and how to optimise it production process production planner supply chain operations logistics production plan kanban pull

Production planning is a key process that involves several operations to organise production resources and meet customer orders on the other hand, maximising the level of service in terms of

  • Speed
  • Flexibility

In a context where market conditions are changing day by day, the production planning process is becoming increasingly strategic in order to be able to meet consumer needs and to efficiently and effectively manage the steps and timing to make products available for sale.

The main activities of production planning are:

  • Analysis of sales forecasts;
  • Analysis of orders placed for sale;
  • Scheduling the purchase of materials, semi-finished products and work accounts;
  • Controlling the progress of production in relation to the schedule;
  • Supervision of the production department and identification of any criticalities;
  • Monitoring compliance with agreed delivery dates.

All these operations are supervised by the production manager, or production planner.

He or she plans, controls and coordinates all the activities related to production progress, optimising the use of resources. In particular, he or she must verify that the correct quantity is produced to be supplied to customers and that production operations meet budgeted costs.

The production manager is therefore responsible for integrating the areas of production, logistics and warehousing, so as to align the?supply chain?with market demand, optimising the processes and tools used on the production lines, managing procurement, changes in the order portfolio and market trends.

Production planning

How to organise a production plan

The production planning process starts with the definition of when and how the company decides to satisfy its target market, i.e. the sales model.

The first phase consists of a continuous exchange of information that allows the transfer of any perceived market needs from the Sales area to Operations, which will turn them into specific actions involving the entire Supply Chain.

In fact, the objective of production is precisely to serve consumers, and companies that have problems meeting delivery times must start by planning the production process and procurement in the best possible way.

The structuring of a production plan therefore starts with an analysis of the criteria, tools and sales methods, in terms of product or service and delivery time.

This analysis requires the involvement of the sales function to be able to define the sales model.

Once the sales model has been defined, it must be verified whether or not the production and planning system is actually able to meet it.

Here, the technical area or production manager, based on the analysis of customer demand, proceeds with the evaluation of the necessary resources to be produced and elaborates a feasible and realistic production strategy according to the available resources.

This is done using production schedules developed for a single article or product family, which the plan schedules into production indicating the resources to be involved and the timeframe within which the various production operations are to be carried out.

An efficient production plan enables companies to achieve the following objectives:

  • optimise the use of resources ( labour and machinery)
  • reduce inventories
  • improve customer service quality
  • reduce production costs
  • reduce purchasing costs
  • prepare sales forecasts
  • plan the right industrial investments
  • reduce waste

Production planning

How to monitor and optimise production planning

Production planning must therefore be complete, feasible, stable and flexible.

This is the only way to satisfy the customer and make efficient use of resources.

Some tricks to optimise and make the production plan efficient are:

1 – Improving resource management

Operators and machinery must be able to work efficiently and effectively.

Analysing bottlenecks along production lines and reducing them is essential in this sense. By identifying areas for improvement, planners can optimise the entire production process and eliminate activities that do not add value.

Analysing bottlenecks enables the production manager to:

  • Identify waste due to waiting from one process to another: Every time an operator, or a machine, does not perform any activity while waiting for an input to start producing, the company incurs waste;
  • Identify waste during handling: All time spent handling material or documents does not create value for the market, and therefore amounts to waste;
  • Identifying waste within the production process: Where processes, badly designed or implemented with sub-optimal technology, carry out steps that do transform the product, but do not generate value appreciated by the market, there is waste.

Production planning

2 – Improve materials management

Scheduling supplies so that the correct quantities are available at the correct times and reducing stock.

One tool that can be adopted here is?Kanban. From a simple tag to an electronic system, it helps to organise the flow of materials in a facility. Kanban helps to visualise the progress of materials, helping to eliminate some of the main wastage, such as:

  • Overproduction: Every time production does not follow demand, and produces parts not required by the market, the company makes waste;
  • Inventories: Wherever there are inventories, and especially where they exist without a management logic that aims to create them on purpose, there is also waste.

Kanban Flow Racks

3 – Improve order and project management

This means defining reliable delivery dates and controlling time compliance in the execution of production steps.

Excellent production planning relies on two fundamental levers:

Sharing of information between the commercial area and production, in order to be able to deal with new market requirements, guaranteeing optimum service for the end customer:

Alignment and coordination of the entire supply chain to market demand. Every process within production planning must be matched: from material procurement to final delivery, via internal production departments and third-party suppliers.

In this respect, it is increasingly necessary to define objectives that are SMART, in order to be able to plan in the right way and make production management more effective.

Specifically, a SMART objective must be: Specific, Measurable, Achievable, Relevant and Time-specific.

  • Specific: Targets must be clear and not too extensive or vague, as it would be difficult to measure and achieve them. By using specific KPIs, the path can be defined even more precisely, with reference points so that everyone knows exactly where they are.
  • Measurable: In addition to being specific in your goals, you need to be able to quantify the data or indicate where you are in relation to the goal to be achieved. In addition, by defining measurable goals, everyone involved in the project can evaluate their own performance and be aligned.
  • Achievable: Goals must be achievable and realistic as well as ambitious and challenging.
  • Relevant: In addition to being attainable, objectives must be relevant and pertinent. KPIs must measure corporate objectives with reference to short- and long-term strategies, objectives that must be neither inaccessible, as they will not increase the team’s commitment, but on the other hand, targets that are not too easy either, as they will not foster improved results.
  • Time-specific: It is crucial to establish a time frame for one’s objectives. A time-specific objective may have a start and an end point, or a series of time parameters or intermediate milestones.

In the case of production planning, the entire process is in fact guided by a date, that is, when the customer expects to receive the requested product or service. It therefore becomes the guideline for the entire production planning process, from the procurement of raw materials and assembly to the fulfilment of the order.

Conclusions

Production planning is an articulated and complex process, which cannot be managed in an improvised or approximate manner. Product personalisation, portfolio expansion, supplier articulation, and the complexity of production lines are just some of the challenges that companies face today in order to compete in the markets.

A production plan must include:

  • A production process management that includes first of all an analysis of the real needs of the customer, structuring production in pull logic, optimising and reducing costs
  • Using solutions that are simple and effective to visualise and make planning activities sufficiently flexible to meet rapid changes in market demands.

Sources

Marco Rotondo

Da sempre interessato agli aspetti organizzativi delle imprese, ho fondato Bg Log nel 2003, un’azienda che si occupa di Lean Manufacturing e Lean Logistics.

2 年

Andy Coles Alan Hargreaves

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