Production planning is the planning of

production Production may refer to: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (goods and services) * Production as a stati ...

and

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to ...

modules in a company or industry. It utilizes the

resource allocation In economics, resource allocation is the assignment of available resources to various uses. In the context of an entire economy, resources can be allocated by various means, such as markets, or planning. In project management, resource allocati ...

of activities of employees,

materials Material is a substance or mixture of substances that constitutes an object. Materials can be pure or impure, living or non-living matter. Materials can be classified on the basis of their physical and chemical properties, or on their geolog ...

and

production capacity Productive capacity is the maximum possible output of an economy. According to the United Nations Conference on Trade and Development (UNCTAD), no agreed-upon definition of maximum output exists. UNCTAD itself proposes: "the productive ''resources' ...

, in order to serve different customers.Fargher, Hugh E., and Richard A. Smith. "Method and system for production planning." U.S. Patent No. 5,586,021. 17 Dec. 1996. Different types of production methods, such as single item manufacturing,

batch production Batch production is a method of manufacturing where the products are made as specified groups or amounts, within a time frame. A batch can go through a series of steps in a large manufacturing process to make the final desired product. Batch prod ...

, mass production,

continuous production Continuous production is a flow production method used to manufacture, produce, or process materials without interruption. Continuous production is called a continuous process or a continuous flow process because the materials, either dry bulk ...

etc. have their own type of production planning. Production planning can be combined with production control into production planning and control, or it can be combined with

enterprise resource planning Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of business management software—typically a sui ...

Overview

Production planning is the future of production. It can help in efficient manufacturing or setting up of a production site by facilitating required needs. A production plan is made periodically for a specific time period, called the planning horizon. It can comprise the following activities: * Determination of the required product mix and factory load to satisfy customers needs. * Matching the required level of production to the existing resources. *

Scheduling A schedule or a timetable, as a basic time-management tool, consists of a list of times at which possible tasks, events, or actions are intended to take place, or of a sequence of events in the chronological order in which such things are ...

and choosing the actual work to be started in the manufacturing facility" * Setting up and delivering production orders to production facilities.Bertrand, J. W. M., and W. G. M. M. Rutten. "Evaluation of three production planning procedures for the use of recipe flexibility." European journal of operational research 115.1 (1999): 179-194. In order to develop production plans, the production planner or production planning department needs to work closely together with the marketing department and sales department. They can provide sales forecasts, or a listing of customer orders." The "work is usually selected from a variety of product types which may require different resources and serve different customers. Therefore, the selection must optimize customer-independent performance measures such as cycle time and customer-dependent performance measures such as on-time delivery." A critical factor in production planning is "the accurate estimation of the productive capacity of available resources, yet this is one of the most difficult tasks to perform well". Production planning should always take "into account material availability, resource availability and knowledge of future demand".

History

Planning department bulletin board, 1911

Modern production planning methods and tools have been developed since late 19th century. Under Scientific Management, the work for each man or each machine is mapped out in advance (see image). The origin of production planning back goes another century. Kaplan (1986) summarized that "the demand for information for internal planning and control apparently arose in the first half of the 19th century when firms, such as textile mills and railroads, had to devise internal administrative procedures to coordinate the multiple processes involved in the performance of the basic activity (the conversion of raw materials into finished goods by textile mills, the transportation of passengers and freight by the railroads." Herrmann (1996) further describes the circumstances in which new methods for internal planning and control evolved: "The first factories were quite simple and relatively small. They produced a small number of products in large batches. Productivity gains came from using interchangeable parts to eliminate time-consuming fitting operations. Through the late 1800s, manufacturing firms were concerned with maximizing the productivity of the expensive equipment in the factory. Keeping utilization high was an important objective. Foremen ruled their shops, coordinating all of the activities needed for the limited number of products for which they were responsible. They hired operators, purchased materials, managed production, and delivered the product. They were experts with superior technical skills, and they (not a separate staff of clerks) planned production. Even as factories grew, they were just bigger, not more complex.Herrmann, Jeffrey W.
A history of production scheduling
." Handbook of Production Scheduling. Springer US, 2006. 1-22. About production planning Herrmann (1996) recounts that "production scheduling started simply also. Schedules, when used at all, listed only when work on an order should begin or when the order is due. They didn't provide any information about how long the total order should take or about the time required for individual operations ..." In 1923 ''Industrial Management'' cited a Mr. Owens who had observed: "Production planning is rapidly becoming one of the most vital necessities of management. It is true that every establishment, no matter how large or how small has production planning in some form; but a large percentage of these do not have planning that makes for an even flow of material, and a minimum amount of money tied up in inventories."

John Robertson Dunlap John Robertson Dunlap (1857 – June 5, 1937) was an American journalist, editor and publisher of engineering magazines and books."John Dunlap dead: Long a publisher", ''The New York Times'', June 6, 1937: He is known as founder of the ''Engineerin ...

Arthur Van Vlissingen Arthur Van Vlissingen Jr. (November 22, 1894 - October 20, 1986) was an American writer and bureau chief for '' Business Week'' and ''Newsweek,'' noted as editor of the ''Factory and Industrial Management'' journal."Writer Arthur Van Vlissingen : He ...

John Michael Carmody John Michael Carmody (November 1, 1881 – November 11, 1963) was an American administrator, noted as editor of '' Factory and Industrial Management,'' and as administrator of the Rural Electrification Administration and the Federal Works Agen ...

. eds. ''Industrial Management,'' Vol. 65-66, p. 182

Topics

Types of planning

Different types of production planning can be applied: *

Advanced planning and scheduling Advanced planning and scheduling (APS, also known as advanced manufacturing) refers to a manufacturing management process by which raw materials and production capacity are optimally allocated to meet demand. APS is especially well-suited to env ...

Capacity planning Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context of capacity planning, design capacity is the maximum amount of work that an organization ...

Master production schedule A master production schedule (MPS) is a plan for individual commodities to be produced in each time period such as production, staffing, inventory, etc. It is usually linked to manufacturing where the plan indicates when and how much of each produ ...

Material requirements planning Material requirements planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, but it is possible to conduct MRP by hand as well. An MRP system ...

MRP II Manufacturing resource planning (MRP II) is defined as a method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning, and has a simulation capability to a ...

Workflow A workflow consists of an orchestrated and repeatable pattern of activity, enabled by the systematic organization of resources into processes that transform materials, provide services, or process information. It can be depicted as a sequence o ...

Related kind of planning in organizations * Employee scheduling *

Enterprise resource planning Enterprise resource planning (ERP) is the integrated management of main business processes, often in real time and mediated by software and technology. ERP is usually referred to as a category of business management software—typically a sui ...

Inventory control Inventory control or stock control can be broadly defined as "the activity of checking a shop's stock". It is the process of ensuring that the right amount of supply is available within a business. However, a more focused definition takes into acco ...

Product planning Product Planning, or product discovery, is the ongoing process of identifying and articulating market requirements that define a product's feature set. It serves as the basis for decision-making about price, distribution and promotion. Product pl ...

Project planning Project planning is part of project management, which relates to the use of schedules such as Gantt charts to plan and subsequently report progress within the project environment. Project planning can be done manually or by the use of project m ...

* Process planning, redirects to

Computer-aided process planning # Computer-aided process planning (CAPP) is the use of computer technology to aid in the process planning of a part or product, in manufacturing. # CAPP is the link between Computer-aided design, CAD and Computer-aided manufacturing, CAM in that it ...

Sales and operations planning Sales and operations planning (S&OP) is an integrated business management process through which the executive/leadership team continually achieves focus, alignment, and synchronization among all organization functions. The S&OP process includes an u ...

* Strategy

Production control

Production control Within supply chain management and manufacturing, production control is the activity of monitoring and controlling any particular production or operation. Production control is often run from a specific control room or operations room. With invento ...

is the activity of controlling the

workflow A workflow consists of an orchestrated and repeatable pattern of activity, enabled by the systematic organization of resources into processes that transform materials, provide services, or process information. It can be depicted as a sequence o ...

in the production. It is partly complementary to production planning.

References

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