The Importance Of Effective Production Planning

Effective production planning is the key to successful operations in a production system. The production planning hierarchy in manufacturing is as follows:

1. Long-Range Capacity Planning

2. Aggregate Planning

3. Master Production Scheduling

4. Production Planning and Control Systems

Long-Range Capacity Planning is used to develop facilities and equipment, major suppliers and production processes and become constraints for medium and short range plans. Executives such as vice-president of operations makes long-range plans. This plan is for a long time operation.

Eg:- All Ford trucks

Aggregate Planning is used to develop medium range production plans such as employment, aggregate inventory, utilities, facility modifications and material

The aggregate plan for the two products would be the total labour-hours for each time period required to produce the forecasted quantity of two products.

Framework for Aggregate Production Planning:

The following diagram shows a simple framework for the aggregate production planning. The forecasting module indicates the likely demand for its product or service during a period. It does not consider the availability of sufficient capacity to meet the demand. The aggregate production planning begins by exploring alternative ways of modifying demand and arriving at the period-by-period net demand during the planning. (as shown in the figure below)

The second step is to explore the possibilities of modifying the supply so that at the end of the planning, the demand and supply are matched on a period-by-period basis. Based on this, various decisions on the level of inventory to be carried during every period and the rate at which goods are produced and the number of people to be engaged and arrived. At last, each and every decision with respect to capacity is taken through aggregate production planning.

Alternatives for Managing

To avoid over loading and under loading the production facility so that production capacity is efficiently utilized.

2. To schedule end items to be completed promptly.

Time Fences in Master production Schedule:

Master production schedule can be divided into four sections, each section separated by a point in time called time fence. The first section includes the first few weeks of the schedule called as frozen, the second section includes next few weeks is called as firm. The next section of few weeks is called as full and the last section of few weeks is called as open.

Frozen means that this early part of master production schedule cannot be changed except under extra ordinary circumstances. Firm means that changes can occur in the second section of the schedule, but only in exceptional situations. Full means that all the available production capacity has been allocated to orders. Open means that not all the production capacity has been allocated, here new orders are placed.

Master production planning makes use of actual customer orders for the purpose of capacity planning and resource allocation to specific customer orders. It is the process by which disaggregation of varieties is done. Here, planning for the material required for production during each period is done. Master production planning is required