Production Planning is the process of creating a plan to meet demand for manufactured products in production.
The production plan sits at the core of the manufacturing business process. Decisions are made here that commit materials and capacity to manufactured parts and finished products.
Production Planning in the Planning Cycle
Production planning begins with a source of demand. Traditionally, this is the Master Production Schedule – an attempt to represent orders and forecast demand for manufactured items. More recently, the Sales and Operations Planning process is seen to be a more appropriate input, tied more closely with sales drivers and customer requirements.
The traditional producer-driven manufacturer relied on a Master Production Schedule to define the supply that will be “pushed” towards the market. The customer-driven manufacturer ties the planning process closer to actual customer orders and inventory replenishment. This step may create a more responsive fulfillment capability that drives manufacturing more directly to the needs of the customer.
Production Planning and Scheduling
The production plan answers the questions like: What are we going to produce? With what resources? What is the signal to produce? How will we release work orders to production?
Production scheduling is the next level of detail. If the production plan defines how resources and material are allocated to product demand, production scheduling details how work centers are allocated to production tasks and operations.
Production scheduling answers questions like: What is the sequence of work orders to be released? What time will each work order complete, given a starting time and date? What is the latest time for each work order to start, given a due time and date?
Production Planning in Excel
A production planning tool in Excel will define the following:
- Demand. A source of demand from open customer orders, stock orders or the output from a demand planning process.
- Supply. The material supply will either come from a Material Requirements Planning (MRP1) module or directly from on-hand inventory, open purchase and work orders.
- BOM. The material relationships between products and components needed to generate dependent from independent demand.
- Process Routing. The standard operations at each work-center that are needed to manufacturer each produced item.
- Capacity. The available times for each of the work centers, based on the shift calendar.
Resources for Planning with Excel
Here are some key articles to help you build a planning tool using Excel:
The Biggest Production Planning Mistake with Excel
Is MRP Your Business Constraint?
Seven Habits for Effective Excel Planning