What is Production Planning? – Process Flow, Types & Tools

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What is Production Planning

Stepping into the world of production planning is like conducting a well-orchestrated symphony in the world of business. It’s the meticulous planning and coordination that transform ideas into tangible products, ensuring efficiency and success.

It helps to control and manage the production of goods. It includes the steps needed to make the products.
There are different types of production plans called production schedules or manufacturing schedules.

This blog post will explore production planning and related terms. We will discuss creating the production plan and the tools and software used.

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What is the production planning, and what are its objectives?

Production planning is a process that creates a plan for producing products. The production plan is a document that explains what will be produced and when it will be produced.

The objectives of production planning are to make sure the right products are made at the right time and in the correct quantities.

Uses of Production Planning

The production process

There are a few critical steps to producing a product. The first step is acquiring raw materials. Next, you need to turn them into a finished product. Finally, once finished, it needs to be packaged and shipped.

Production processing

Production processing is when you turn raw materials into another product. For example, if you have a production line that takes in unprocessed ingredients and makes finished goods, or if it brings in finished goods and creates a different type of product.

Manufacturing process

A manufacturing process is a series of steps followed to make a product. The first step is getting unprocessed materials, and the last is finishing the product.

There are three main parts of the process:

  1. Collection of raw materials
  2. Manufacturing of the product
  3. Packaging and shipping of the product

Ingredients are collected and brought to the manufacturing plant. The manufacturing process begins with the production of the product. The product is then packaged and shipped to the customer.

You can divide the process into two sections:

  1. Inward processing
  2. Outward processing

Inward processing refers to the manufacturing of products from basic materials. Outward processing refers to the manufacturing of products from semi-finished products.

Manufacturing can be divided into the following steps:

  1. Receiving and inspection of ingredients
  2. Cutting and shaping of ingredients
  3. Assembling of components
  4. Finishing and testing of products
  5. Packaging and shipping of products

It is a long, complex series of steps followed to create products. Therefore, manufacturing companies have departments dedicated solely to production planning. A good production planning process ensures a smooth manufacturing process in an organization.

Production scheduling

Production scheduling is the process of organizing production in a factory. This includes creating a plan and determining the resources needed for each step.

Scheduling is essential to make the factory run smoothly and efficiently. It is crucial to think about the availability of human and machine resources and the order of products.

Companies can use production scheduling software to help create and manage a production schedule. This software can automate creating a plan and track the status of each step in the process. In addition, scheduling software is often used with other manufacturing software, such as quality control or inventory management software.

Production line

A production line is a set of machines, tools, or workers who produce something. A production manager oversees it to ensure everything runs smoothly and that the workers do what is wanted. In addition, the production manager makes sure the workers are doing their job right. 

The most common type is the Assembly line. Each worker does one step of the process, making it more efficient. Another is called a Job shop. Each worker does the whole process in a Job shop, which is not as efficient as an Assembly line but allows for more flexibility and creativity.

The production line can be under conventional or lean production models. Conventional production is when the workers do their jobs the same way they have always done them. Lean production is when the workers are more flexible and can adapt to changes in the production process. 

The production line is responsible for taking unprocessed materials and turning them into finished products. So it needs to be organized in a way that allows it to be efficient and effective in creating products from raw materials.

Raw materials

Raw materials are the components that are used to create a product. They can be divided into primary raw materials and secondary raw materials.

Primary are the basic components of a product. These materials, such as minerals, plants, or animals, are usually extracted from nature. Primary raw materials are used to make the basic parts of a product. For example, they can use aluminum for the body of a phone.

The secondary is made from primary basic materials. These materials are usually created in a factory or other manufacturing environment. Secondary raw materials are used to create finished products, such as a car’s body or a phone’s screen.

The basic materials must be available in sufficient quantities to ensure the finished products’ efficient and effective creation. Therefore, raw materials must be managed carefully so that the production line can always obtain enough resources to allow for production.

Capacity planning

Capacity planning is assessing and anticipating the number of resources needed to produce the desired output level.

What is Capacity Planning? (Strategies, Tools, and Process)

The production process provides three possible outcomes of this determination:

  1. It can identify enough resources
  2. Not enough resources
  3. Or more resources than desired

Production control

First, production planning and control regulate the production of goods and services to meet the market’s demand.

Production control also includes ensuring that the resources are available when needed, monitoring production to ensure that it meets the schedule, and making changes as required to ensure that production meets the forecasted demand.

Planning Process

Production Planning is organizing and managing the production of goods and services to meet customers’ needs.

The main goal of production planning is to ensure that the right products are made in the right quantities, at the right time, and at the right price.

Production planning involves three key steps:

  1. Planning: In this step, managers determine what products must be made and identify the necessary resources. They also develop a schedule for producing these products.
  2. Manufacturing: In this step, workers make the products.
  3. Distribution: In this step, managers ensure that the products are delivered on time and at the right price. This step is closely related to supply chain management.

The production planning process is crucial because it helps businesses to:

  • Meet customer demand
  • Control costs
  • Maximize profits
  • Improve quality and efficiency

Outcomes and outputs of production planning

Outcomes of Production Planning

The outcomes of a better production planning process are:

  • A well-organized and efficient production process
  • Improved quality of the final product
  • Increased productivity and efficiency
  • Reduced manufacturing time
  • Reduced waste and scrap
  • Reduced production costs
  • Increased customer satisfaction and reduced lead time.

These outputs are achieved by an effective Production Planning Process, which is responsible for taking inputs from the various functions involved to accomplish these outputs.

The inputs required include,

  • Market requirements
  • Competitor analysis
  • Product design specifications/drawings & product specifications
  • Available resources & production facilities
  • Schedule for product development

Outputs of a good production planning process are:

  • A well-organized and efficient process flow diagram
  • Detailed work instructions/operations manuals to support the process flow diagram
  • Product cost estimation by activity or operation as per BOM (Bill Of Materials)
  • Output schedule comprising the production start date, due dates for all activities, and finished product delivery dates
  • Capacity requirement calculation based on the Output schedule
  • Raw material availability check & purchase plan preparation

Types of production planning and the time horizons

There are three types of production planning: short-term, medium-term, and long-term.


It is used to plan and schedule the production of goods for the near future. For example, this type of planning is used when there is a known demand for a product, and the manufacturer must ensure that they have enough stock to meet that demand.


It is used to plan and schedule the production of goods for the medium term. For example, this type of planning is used when an estimated demand for a product is estimated, but it is not yet known how much stock will be needed.


It is used to plan and schedule the production of goods for the long term. This type of planning is used when there is an expected demand for a product, but exactly when the need will occur is unknown.

The production plan

The production plan is a document that details the specific steps to produce a product. For example, the production plan includes production, manufacturing, scheduling, line, and production costs.

The production plan ensures that the product is produced according to specifications. The production plan is also used to ensure that the product is made on time and low cost.

Types of production plans

Types of Production Plan

A business can use several production plans to optimize its schedule since multiple processes are involved in its operation. The most common types of production plans are as follows:

The production planning department typically creates these plans. However, depending on the company’s structure and needs, they can also be delegated to a project manager or line supervisor.

In some cases, planners could even combine these plans into one document to make it easier for all parties involved to understand what is needed from each section. First, however, it is essential to note that each of these plans serves its unique purpose in production.

How to create a production plan

There are a few critical steps in creating a production plan:

1. Establish the goals of the production plan – What is the purpose of the production plan? For example, is it to meet customer demand, reduce manufacturing time, or control costs?

2. Determine the necessary resources for production – What resources are needed to produce the product? This includes human resources, machines, and raw materials.

3. Create a manufacturing process – What steps are needed to produce the product? This process should be detailed and easy to follow.

4. Schedule production – When will the product be produced? What are the due dates for all activities, and when will the finished product be delivered?

5. Control production – How will the process be monitored to ensure it proceeds as planned? What steps need to be taken if there are deviations from the plan?

Types of production planning tools

  • Production planning software is designed to help businesses plan, schedule, and manage their production. It can provide various reports on how the process is proceeding and alerts if there are any deviations from the plan.
  • Production planning templates – A template is a pre-determined format for creating a document. Production planning templates can help ensure that all the necessary information is included in the production plan and that the document is easy to follow.
  • Gantt chart – A Gantt chart is a graphical tool to schedule and track tasks. For example, it can display the relationship between tasks and their start and finish dates.
  • Production planning tools online provide standard features and let you collaborate with others.
  • Production planning PDF allows you to print and use them as hard copies.
  • Production planning excels
  • Production scheduling software enables you to track the progress of each step in the process and alerts you if there are any delays.
  • Production line design software allows you to design and simulate the process before producing the product.
  • Raw material inventory management software helps you track how much of each raw material is needed for the process and order more if necessary.

List of production planning software

  • Microsoft Excel – Microsoft Excel is one of the most common and popular software for production planning. Small and medium businesses widely use it because it is easy to use and versatile.
  • Oracle Primavera – Primavera is a production planning software used by larger businesses. It offers more features than Microsoft Excel, such as creating Gantt charts.
  • SureTrak Project Manager – SureTrak is another production planning software used by larger businesses. It has more features than Primavera, such as tracking inventory and costs.
  • Microsoft Project – Microsoft Project is a project management software used for production planning. It has more features than Microsoft Excel, such as creating timelines and tracking costs.
  • Workfront production planning software – Workfront is a cloud-based software that helps businesses manage their production planning. It has features such as the ability to track tasks and costs and to create reports.

Most modern ERP solutions include a production planning module in them.


Why is production planning important in supply chain management?

Production planning is essential in supply chain management because it allows for the smooth and efficient flow of goods from the supplier to the customer. Production planning also helps ensure that the correct quantities of goods are produced and produced on time. Production planning also helps to keep costs down and minimizes waste.

How do you plan human resources in production?

When planning human resources as part of manufacturing production planning, it is vital to consider its needs and the available workforce. Some factors to consider when planning human resources include:
– The number of employees needed
– The types of positions needed
– The skills and experience required for the positions
– The geographical location of the employees
– The availability of qualified employees

What is Production Planning and Inventory Control?

Production planning and inventory control (PPIC) is a process that determines the number of products to produce, when to make, and what resources are needed.
PPIC also determines the types and quantities of materials from suppliers and the need for finished goods inventory. As a result, PPIC helps companies ensure they have the right products on hand to meet production orders while minimizing costs.


Production planning is critical for all businesses, whether you produce physical or digital products. By correctly understanding the process and scheduling your production, you can minimize waste, optimize resources, and ensure that your customers are happy with their products.

In this comprehensive guide to production planning, we’ve outlined the steps involved in creating an effective plan and some best practices for streamlining the manufacturing process.