In this post, you will get a complete idea on, what are production plan, production planning, and production planning ERP module.
A Production plan is derived from the detailed sales forecast, it balances market demand with company resources.
Production planning is the cross-functional process of devising an aggregate, family-level plan for a month or quarter based on,
- Management targets for production.
- Sales and inventory levels.
It meets operating requirements for fulfilling basic business profitability and market goals. And it provides the desired framework in developing the master production schedule.
What does it actually mean?
Production planning in simple terms is the first and foremost planning and estimation that any production and manufacturing firm would organize. Things like,
- what will be the production capacity of the unit
- how much raw material is needed to generate that amount
- what must be the process of production
- whether it is economical or not
- how much labor is needed
- what kind of skills they may possess
- whether there is any wastage
- And if yes, then how to reduce it so herein comes the plan B of production- any alternate method of production.
All these concepts and questions should arise whilst in production planning, to overcome the glitches and generate a continuous workflow.
A sound production plan must consider all the aspects of manufacturing an item from scratch. It must be able to predict where things might go wrong, and how to get through it without harming the smooth functioning of the firm, once it begins.
Hence, the production plan is designed far ahead in time, even before the firm starts manufacturing properly.
Objectives of Production Planning
Let’s now get into the detailed description of the objectives of production planning that need to be kept in mind while designing the production plan for an organization,
- Determining the production capacity: The first and foremost thing to be planned out is the full capacity that your firm is targeting to produce. This is a crucial step for all production planning strategies. A lot of other things are to be considered like availability of raw materials, proper infrastructure to handle every procedure, good and efficient labor, the time required to process one batch of finished goods without any setbacks, and so on.
- Forecasting the demand and specifying the audience: This objective is a very important one. Only when you have a targeted audience for whom you are producing, you can assess the market demands of the product you are generating and how long will the demand keep you running. It takes a really good planner to assess all this properly but once done it’s a failsafe against production hazards.
- Proper inventory control: Any organization trying to make it big, and targeting a smooth, uninterrupted workflow must stock p its inventory on time. Detailed computer-generated programs are used like MPS and MRP in high-end firms for production planning and scheduling. These help to properly manage and synchronize the inflow of materials, and also on time to not hinder the work process.
- Generation of waste: Any well-managed firm would generate some waste. The target must be to keep a tab on the amounts of waste generated and to try and reduce them by any parallel process. The waste generated can be used up as raw material in some other process through the production line, which improves the stability of the firm as well as makes it an economical project.
- Risk Assessment and proper control: A production plan must have a risk assessment done. This procedure highlights all the glitches in the plan, what could go wrong, and how. It studies historical projects of a similar dimension and tries to forecast the risk areas that need to be tackled carefully.
This requires setting up a control system, which highlights the production line without the risky spots, and assesses the results to grasp the magnitude of the risk, properly. This type of study is very common in manufacturing firms.
Production planning types
You may find several types of production planning that concentrate on various aspects of the production process.
- Master Production Schedule (MPS): It helps to schedule the particular material or product to produce in a given time. They are created by the software and customized by the user.
- Material Requirement Planning (MRP): This system is useful for production planning and scheduling. It helps to know about the availability of raw materials. This system can be handled fully manually or automated by software.
- Capacity Planning: It helps to find out the capacity of the organization to manufacture the products as per the demand.
ERP Production planning module
ERP production planning module handles the business process related to the production of a company.
Production planning optimizes the use of manufacturing capacity, parts, components, and material resources. It is done by using historical production data and sales forecasting.
The evolution of manufacturing requirements planning (MRP) II into ERP happened. In this process, vendors have developed more robust software for production planning. Consulting firms have accumulated a vast knowledge of implementing ERP production planning modules.
ERP production module will handle a tiny part of the production. The module begins with Product creation. There will be a component master and stage master.
This module is designed to track day-to-day production progress. On completion of any work order information will be sent for delivery. Reports on the delivery schedule will be available in this module.
Production Planning helps an organization in planning production. Planning with the best use of all available resources.
Material requirement planning is done based on the advice generated by the sales department.
The feasibility of production is evaluated using details like
- Raw material availability and procurement time.
- Machine availability and capacity.
A production schedule is generated for all machines. Scheduling is done in an optimized fashion based on the priorities of production.
Features of the ERP production planning module
- Process definition with inputs, outputs, by-products, and overheads
- Definition of Bill of Materials (BOM) for all products up to any number of levels.
- Planning based on customer-wise production advice and sales forecast.
- Material requirement planning: MRP based on machine capacity and availability. Machine efficiency, raw material availability, lead time. It gives a workable quantity for production.
- Production plan for machines with the best use of all available resources. Resource like raw materials and machines.
- Option to revoke production plan to change input parameters, production priority, or quantity. This is done using fresh production advice.
- Generation of the production schedule for machines detailing inputs and outputs.
- Analysis of machine efficiency and utilization.
- Automatic generation of MRS and purchase requisitions on finalization of the plan.
- Generation of process requisition for processes that have to be subcontracted.
- Reserving quantity for production.
- Automatic generation of job orders for production.
- Option to make daily plans for production.
- Generating reports related to production.
What are the advantages of an efficient production plan?
- Maintaining a smooth workflow improves the work environment due to a reduction in labor and production costs.
- A properly designed production plan will reduce inventory costs and risks of misinterpreting and running a huge loss.
- Increased customer service level due to on-time and high-quality deliveries.
- .Increase in production capacity due to synchronized functioning of the production line and thus increased sales rate.
Hence, an efficient and smart production plan is like the groundwork for success. Using the production planning module in ERP makes this process better.