PRODUCTION & PRODUCT PLANNING

What is Production Planning? Planning is a process for accomplishing purpose. Production planning is one of the planning functions that a firm needs to perform to meet the needs of its customers.

What is Production Planning? A production plan is the portion of your intermediate-range business plan that your manufacturing operations department is responsible for developing.

Production Planning and Control’s Main Functions Forecasting to predict customer demand on various products over a given horizon. Aggregate Planning to determine overall resources needed. Materials Requirement Planning to determine all required components and timing. Inventory Management to decide production or purchase quantities and timing. Scheduling to determine shop-floor schedule of various components.

Why is it important to have a carefully developed production plan? Firms need to have a production planning strategy to ensure that there is sufficient capacity to meet the demand forecast and to determine the best plan to meet this demand.

A carefully developed production plan will allow your company to meet the following objectives: Minimize costs / maximize profits Maximize customer service Minimize inventory investment

A carefully developed production plan will allow your company to meet the following objectives: Minimize changes in production rates Minimize changes in work-force levels Maximize the utilization of plant and equipment

The Product Planning Process The product planning process is one of the most controversial within any company. Everyone wants a hand in new product definition and almost everyone will have contributions that will make a new product successful.

What is product planning? What is product planning? Product Planning is the ongoing process of identifying and articulating market requirement that define a product’s feature set.

This system also needs to incorporate customer feedback, assure that important new product ideas are approved, and that development of them initiated immediately. What follows is a product planning system that works well for most companies.

MARKET REQUIREMENTS REFINED  Once the product is approved you can refine the market requirements, adding more detail on the desired features of the product and how the customers will use the product.  There will be two types of MRDs, one for new products and a second for new releases of a current product. DEVELOPMENT INITIATED  Once the MRD is complete, the developers can start to work on a functional specification and prototypes.  Some companies combine the MRD and Functional Specification into one document to help them decrease time to market.  To do this, you must work very closely with engineering to make sure that the functional design of the product will indeed meet customer requirements.

THE DECISION If the product fits into the company strategy, but the resources are unavailable to work on it, it may be a good idea to put it on hold until some determined future time. The decision should take into account the following criteria:  Does the project fit into the company's long term strategy?  Does the target market for the project align with the company strategy?  Will there be sufficient revenue from the product to justify the work required?  If there is not sufficient revenue, are there other highly compelling reasons to justify the work?  Are the resources available to do the work?  If the resources are not available, should this project take precedence over another?