Planning for manufacturing and supply chain operations
Distinction between planning and scheduling
Planning is the process of creating and maintaining a plan.
“Plans are Nothing; Planning is Everything”
Dwight D. Eisenhower
The process of operations planning is a critical cycle of decision-making and execution.
The business plan carries the set of business goals. It unifies shareholders and management with the resources required to meet them.
“Planning is bringing the future into the present so that you can do something about it now”
Alan Lakein
Operations planning determines the actions required to meet the business plan. It is an exercise in effectiveness.
Operations planning ties the functions that typically reside in operations: manufacturing, supply chain, purchasing and customer service. It is usually tied with demand in a Sales and Operations Planning process. It translates the financial sales and cost-of-goods forecasts into volume figures for monthly output.
“Unless commitment is made, there are only promises and hopes; but no plans.”
Peter Drucker
Production planning drives the manufacturing aspects of operations planning to the level of daily activity in the factory. It is usually tied with a materials planning to ensure the right parts and met with resource capacity.
Production planning is critical because it most directly meets the actual customer requirement. Customer orders are accepted with a due-date that is the key driver to the production plan.
Production Scheduling takes the production plan and creates a sequence of tasks and jobs that are to be filled with constraint resources. This is where the limitations of resources and material will define the performance of the production plan. As such, production scheduling is usually linked to a capable-to-promise function that can perform “what-if” calculations to validate the performance of a future order to a due-date based on current commitments.