Production Planning

AGRIB 140
Production and Operations Management
Definition of Terms
Production
• An organized activity of converting raw materials into useful
products
• Uses economic input or resources, like labor, capital equipment or
land, to provide goods and services to consumers
Production planning
• Done to anticipate possible difficulties and to decide in advance as
to how the production process should be caried out in a best and
economical way to satisfy customers
Production Control
• Management takes all possible steps to see that plans chalked out
by planning department are properly adhered to and the standards
set are attained
Production Planning and Control
• direction and coordination of firms’ resources towards
attaining the prefixed goals
• helps to achieve uninterrupted flow of materials through
production line by making available the materials at right
time and required quantity
Production planning*
• Means to organize the manufacturing process
• A manufacturing strategy that outlines the step-by-step
process of creating the product from conception to
completion
• Helps identify the raw materials needed to produce a
product and allocate resources
Production planning
• refers to the various types of planning techniques used to
maximize production and profitability
• Aspects:
• Long term – focus on major decisions that influence capacity
• Medium term – focus on adjustments like hiring, firing, layoffs,
increasing inventory, etc.
• Short term – focus on using resources more efficiently
Benefits of Production Planning
• Organization
• identifies which materials a manufacturing project requires and
improves the process of allocating the correct resources
• Communication
• enables manufacturers to communicate with suppliers about
which raw materials they need, the amount and when they need
the materials
• Efficiency
• organizing plans to get and disburse the products often allows
your production process to run more efficiently
Benefits of Production Planning (cont’d)
• Resource Allocation
• Having an effective production plan allows to decide how to use
the company's resources.
• Cost-effectiveness
• You can plan to use cheaper resources and eliminate waste in
the production process
Requirements of Production
AGRIB 140
Production and Operations Management
Production planning vs. production scheduling
• Production planning determines what the business
produces and how much product to make, while
production scheduling determines who production
involves and when they complete production tasks.
• Production scheduling uses the production plan to
decide which employees fill the customer orders and
provides a deadline for the tasks to be completed.
4 steps in production planning
• Determine the sequence
• also known as routing
• involves planning what you want to sell.
• quantity, the resources and the method to use
in production process.
• consider the following:
• Type of production
• Manufacturing setting
• Employees
4 steps in production planning
(Cont’d)
• Develop a timeline of operations
• includes scheduling how much work
professionals need to accomplish and setting a
deadline for that goal
4 steps in production planning
(Cont’d)
• Allocate resources
• includes ensuring each manufacturing
professional has the materials they need to meet
their production goals
• When allocating resources, consider the
following:
• Materials
• Work instructions
• Employees
4 steps in production planning
(Cont’d)
• Evaluate the strategy
• evaluate its efficiency and success
• When evaluating your production strategy,
consider the following:
• Expected performance
• Actual performance
• Production issues
Phases of Production Planning and Control
Prior Planning
• means pre-production
planning
• includes all the planning
efforts, which are
taking place prior to the
active planning
Prior Planning (cont’d)
• Product development and design is the process of developing a
new product with all the features, which are essential for effective
use in the field, and designing it accordingly.
• Forecasting is an estimate of demand, which will happen in future
• Aggregate planning aims to find out a product wise planning over
the intermediate planning horizon.
• Material requirement planning is a technique for determining the
quantity and timing
Active Planning
Process planning and routing
• complete determination of the specific technological process steps and their
sequence to produce products at the desired quality, quantity and cost.
Material planning
• determines the requirements of various raw materials/subassemblies by
considering the trade-off between various cost components like, carrying cost,
ordering cost, shortage cost, and so forth
Tools’ planning
• determines the requirements of various tools by taking process specification,
material specifications and equipment
Loading
• process of assigning jobs to several machines such that there is a load balance
among the machines
Scheduling
• time phase of loading and determines when and in what sequence the work will be
carried out
Steps in Planning the Physical Facilities
1. Determine the products/services to be provided
2. Each product/service will need to be broken down into its
constituent parts
3. It is now necessary to determine how long it takes to perform
each of the operations involved.
4. The times obtained are then used to determine the capacity
requirements in terms of both processes and people.
5. Having determined the capacity requirement, this will serve as
the basis for establishing the other non-processing facilities
which need to be accommodated.
Steps in Planning the Physical Facilities (cont’d)
6. The next step is to decide on the best arrangement for the
main functions involved. This will provide a general overall
layout for the site and will need to take into account the
restrictions imposed by the existing building
7. Next it is necessary to prepare alternative detailed layouts
within a department. To do this the sequence of operations
involved to complete each product/service will need to be
established and reviewed.
8. It is important to remember, especially in the final two steps,
to prepare alternatives from which you can choose, and also
to involve those concerned in the analysis and final decision.
9. Finally it is essential to review legislative considerations
Capacity vs Throughput
• Capacity – how much can an equipment hold
• Production rate
Amount of product produced per month
# of production rate per month

• Throughput – how fast can an equipment effectively produce

Amount of products sold per month
(# of production days per month)(# of hours worked per day)