Production Planning in Manufacturing

Planning

According to Principles Of Management planning is the function that determines in advance what should be done. It is looking ahead and preparing for the future. It is a process of deciding the business objectives and charting out the methods of attaining those objectives.

Henri Fayol, the father of modern management and the author of General and Industrial Management, identifies planning as one of the most difficult of all managerial functions. For Fayol, planning is about looking ahead. It is about connecting now to the future.

The planning stage is about making a roadmap that takes you from here to where you want to be in your manufacturing production.

Production

Production is the process that leads to the creation of goods and services. In manufacturing, the production process uses labor, material, machinery, and other resources to reach its outcome.

Production Planning

Production planning is about making detailed plans to optimize the production process and make it reach its production goals. The production planning process is about making the production process efficient and effective.

Production planning is a bridge that connects the current state of production to its efficient and more beneficial version in the future.

To sum up, production planning is about making plans in advance to make sure your production meets its best outcome.

Goals of production planning

The goal of production planning is different for each industry. And it is closely tied to a company’s vision for its future production.

This commonly translates to meeting customer demands, optimizing the use of resources, minimizing production costs, improving product quality, adopting changes, minimizing inventory costs, etc.

To summarize, effective production planning makes sure a manufacturing process reaches its full potential.

Production Control

In Operations Management in the Supply Chain by Roger G. Schroeder and Susan Meyer Goldstein, “Production control refers to the management activities that are used to monitor and control the production process, including the scheduling of production, monitoring the progress of production, and taking corrective actions as needed to ensure that production goals are met.”

The idea of control in production planning and control (PPC) is about making sure that the planning is on track. The control process refers to the monitoring, evaluation, and reporting process. The goal of the control phase in production planning and control (PPC) is to make sure that the production is followed and improved according to the plan.

Production planning meaning in manufacturing

Production planning in manufacturing is about planning ahead and putting control measures in place to ensure that production is done right. Here, production planning helps manufacturers keep the process working as envisioned (planned) to meet their future target.

This usually means efficient manufacturing, optimizing resources, reducing inventory costs, meeting quality standards, meeting customer demands, reducing idle time, reducing bottlenecks, and much more.

One of the best ways to describe production planning is mentioned in Production Planning and Control. Here, D.R. Kiran describes (PPC) as the brain and nervous system of the production program.

This system makes sure that the right quantity of materials is available when and where they are needed.

This nervous system is in place to make sure the big operation will progress according to the schedule. And it will produce the right quantity, with the right quality, price, and of course at the right time.

Types of Production Planning and Control

The design and type of production planning and control system are determined by a few factors. Three of these factors are product volume, variety, and customer demands.

Volume and variety: Volume is the number of products in a production process. High-volume products are mass-produced. Productions with high-volume products focus on very few lines of product.

The type of production planning depends on how many products and what quantity of each you want to produce in the manufacturing process.

Here is an example to see the volume, variety, and different types of customer demands in two productions:

At a gourmet restaurant, you expect to sit and wait for your dinner to arrive. On the other hand, at a drive-thru burger place, you hope to receive your order under a few minutes.

In this example, the fast-food place will have only a small variety on the menu. And instead, it makes a high volume of the same product all day long.

As opposed to a gourmet restaurant that offers a large variety on its menu but expects a low volume of orders for each item.

Furthermore, the type of production planning and control depends on the type of product and how it is created.

Production Planning Categories

Broadly speaking, the types of production planning in job shop and manufacturing depend on:

• Product Design and Production Environment
• Process Design and Process Categories

Let’s look into each of these in more detail.

Product Design and Production Environment Categories

Generally, the production design varies based on the finished product and the customer demand. In manufacturing such differences lead to separate production environments. Each category addresses the different levels of customer demands.

Here are the different environment categories based on product design:

• Make-to-Stock (MTS): This type of production makes the toaster that comes to the shop near you. It’s pre-made and shipped to stores for sale to customers.
• Assemble-to-Order (ATO): This type of production has options to choose between different predesigned options. For example, you choose the color or the type of seat covering when you purchase a car.
• Make-to-Order (MTO): This type of production accepts special orders from customers. This could be a custom bicycle store that makes bikes according to your special order. The options might be limited, perhaps you might not be able to purchase a bicycle that flies as you pedal.
• Engineer-to-Order (ETO): This type of production allows customers to have a complete choice over the design and type of product. This type of production can have an engineering design department to help design the order, choose the material, and make the final product. So, you might be able to find an ETO shop that can make a flying bike for you.

Source: The Fundamentals of Production Planning and Control by Stephan N. Chapman

Process Design and Process Categories

The volume and variety discussed above, and the type of manufacturing outcome determine the type of processes that are required for production.

In The Fundamentals of Production Planning and Control, Stephan N. Chapman divides the processes in production into five categories:

1. Project-based planning
2. Job-based planning
3. Batch Processing
4. Flow Processing
5. Continuous Processing

Now, let’s look at each processing category and some of their examples.

Here are the five process categories in manufacturing with more details and examples:

1- Project based planning:

This process assumes one-of-a-kind as its production output. The project-based process is large and managed by teams. An example of a project would be building a new house.

2- Job Process:

These types of processes are used in job shops. Job processes are about flexibility and variety.

The equipment in this type of process is multipurpose, for example, a CNC machine, or an oven.

The workers in this type of process are usually highly skilled in a job process, for example, a welder, a machinist, or a baker.

Typically, a job shop makes a large variety of special products. Just like what we discussed in the MTO or ETO design environment above. An example of a Job Shop is a general-purpose machine shop or a servo motor repair shop.

3- Batch Processing:

This category is also called intermittent processing and falls in the middle. The machinery in batch processing is more specialized than a job shop. But there is still some flexibility to produce design variety.

Similarly, workers don’t need to be as specialized as in a job shop.

As the name says this type of production works in batches. Batch processing could make a few hundred of one model products. Then they change their setup and make another batch of a slightly different model.

Some batch processes can produce some make-to-order (MTO), some make-to-stock (MTS), and of course Assemble-to-Order (ATO).

An example of a manufacturing process is a furniture store that allows you to choose the type of cushion, fabric, or wood for your sofa.

4- Flow Processing:

This process is about repetition and large volume. The ranges of products is quite narrow in this type of process.

Equipment is highly specialized. This type of process relies less on labor.

The goal of repetitive processing is to lower the cost per item and make the products price competitive.

The products are typically designed for make-to-stock (MTS). An example of repetitive processing is making washing machines, fridges, or other electronics.

5- Continuous Processing:

This process is about mass production. It’s designed based on a highly specialized process. The machinery is precise and little labor is needed. High-volume chemical processing plants fit in this category.

To summarize, the complexity and type of production planning and control techniques required in an operation depend on the volume and type of production.

For example, production with Make-to-Order (MTO) and Engineer-to-Order (ETO) processes will need a more complex production planning and control system in place. This ensures the quality and cost of their operation are done right. As opposed to mass production and flow processing that requires a simpler PPC.

Stages of PPC

In the classic book on production planning, Elements of Production Planning, Samuel Eilon divides activities in PPC into three stages.

Here are the 3 stages of production planning and control in manufacturing:

• Planning
• Operation or Execution
• Control

Here is more detail on each of these stages:

1- Planning: This step is about looking at data and setting targets for production. It is about creating a detailed production plan that specifies what should be produced, and how and when it should be produced. The planning stage also involves planning resources such as labor, materials, and equipment.

2- Operations or Execution: This step is about scheduling and performing according to the production plan. In this stage, the resources are assigned and the process is monitored.

3- Control: This control phase is about supervision, measuring, and monitoring the operation. Additionally, disparities between the plan and the actual production are identified and reported back for further progress.