Production Planning Overview
Production planning is central to the success of any manufacturing company. It involves generating a plan to satisfy your customers in a manner that results in a reasonable profit. A good production plan includes the timing of customer requirements and identification of the resources necessary to satisfy those requirements. Resources include machine and equipment time, tooling, labor, materials, and engineering support.
Capacity Planning is the subset of Production Planning that compares customer requirements with available capacity. Depending upon the time frame involved, and whether or not bills of material have been exploded, more specific terms used to describe the process include resource requirements, rough-cut capacity, or capacity requirements planning.
Finite or Infinite Production Planning Software?
Should you generate your production plan finitely or infinitely? It depends upon the time horizon. Given enough time, all capacity is infinite as you can eventually add unlimited amounts of people, machines, and even production facilities. However, in the real world, most production planning occurs in time periods where at least some resources are finite.
Infinite capacity planning involves dividing the time horizon into “buckets”. In these buckets, it compares hours of requirements (or load) to available hours of capacity and looks for imbalances. The timing of loads is determined by backward scheduling from required dates using lead times. Lead times are based to a large degree on estimates of how long operations will wait in queue due to capacity constraints.
Unfortunately, queue time estimates, and therefore lead time estimates, can be wildly inaccurate depending upon the interplay between customer demand / product mix and capacity. The result can be unusable production plans. Since capacity can’t always be added or subtracted instantaneously, plans that mismatch capacity and requirements needlessly add cost, and jeopardize your ability to satisfy customers.
Is there a better way? Yes, Advanced Planning and Scheduling Software (APS) allows you to generate your production plan finitely (i.e. explicitly consider capacity constraints). APS software will:
- show the time phased cost and profit impact of a particular plan
- precisely and dynamically calculate queue time based on the natural capacity limits of your operation.
- provide accurate visibility into when requirements will finish
- identify capacity mismatches (excess capacity or bottlenecks that will delay production) and suggest corrective action
- allow you to simulate and compare different alternatives
- let you easily flip between planning finitely or infinitely