Posted in Operations and Supply Chain Terms, Total Reads: 790
Definition: Production Planning
Production planning is deciding how to go about producing a particular product. This includes deciding what product to produce, when to produce it, what resources are required for producing it, scheduling these resources for production, etc.
This involves making a detailed production schedule. It also involves deciding from where to obtain the raw materials, how much raw materials are required, when should the resources be made available for production, planning the sequence of activities, etc. The main aim is maximizing profits, minimizing costs and meeting the customer requirements. Production planning also aims at predicting the possible glitches in production and ensuring smooth execution of operations. Production planning can be done at three levels – factory, process and operation.
Eg – In case of a soft drink manufacture factory, production planning will involve
Factory level planning – Planning the activity sequence (buying raw materials like sugar, carbonated water, etc, producing the drink, bottling, etc)
Process level planning – Planning the operations on inputs to convert them into desired output (preparing the concentrate, mixing carbonated water, etc)
Operation level planning – Planning each operation (what equipment have to be used, how much soft drink has to be filled in the bottles, etc)