Production Planning | Characteristics | Importance | Phases | Pre-Requisites
What is Planning?
Planning may be defined as the determination of a course of action to achieve the desired results. Planning involves the determination of objectives and planning of operations in terms of policies, plans and budgets which will establish the most advantageous course for the organization. Planning is the determination of what is to be done, how and where it is to be done, who is to do it and how results are to be evaluated.
What is Production Planning?
Production planning is a pre-determined activity. It is the pre-determination of manufacturing requirements such as manpower, materials, machines and manufacturing process.
Ray Wild defines
production planning is the determination, acquisition and arrangement of all facilities necessary for future production of products. It represents the design of production system. Apart from planning the resources, it is going to organize production based on the estimated demand for company’s products, and establish the production programme to meet the targets set using the various resources.
In the words of Samuel Eilson
Production planning may be summarily defined as the direction and coordination of the firm’s material and physical facilities towards the attainment of pre-specified production goals in the most efficient available way.
Characteristics of Production Planning
The analysis of the above definitions of production planning reveal the following characteristics:
1. Production planning is a universal production activity.
2. Production planning is the basis and pre-requisite of production control.
3. Production planning includes routing of production activities and layout production facilities such as building, machines, etc.
4. Production planning is related to planning, directing and controlling of production methods for the manufacture of product.
5. Production planning may be short-term or medium-term or long-term.
6. Production planning can be done at three levels viz., factory planning, process planning and operations planning.
Importance of Planning for Production Process
The necessity for careful planning of production operations arises from four important factors:
1. Modern production has become increasingly complex, requiring systematic “thinking through” of the process in advance.
2. Production processes always involve the element of time in varying degrees. In the initiation of production anticipation of probable future, utilities and calculation of probable future costs are essential.
3. The element of probable change must always be taken into account.
4. Successful production aims at the most economical combination of resources, which requires planning as a means of effecting cost control.
Phases in Production Planning Process
The production planning process includes three phases:
1. Research and exploration: Concerned chiefly with the definition of issues to be included within the scope of the plans and the determination of various possible alternatives which may be employed in achieving the desired ends.
2. Choice of resources, facilities, methods and procedures to be employed.
3. Codification of plans: Including formulation of specifications covering products and materials, tools and manufacturing facilities which are necessary for performing the job; objectification of plans including drawings, models, layout charts, and similar devices which are required in delivering the plans to those who will carry them out; formulation of procedure and instructions as to how plans are to be placed in execution.
Pre-requisites & Information Requirements of Production Planning Department
The production planning department can proceed with its planning function if it is fully equipped with the following information. This information is required for planning in both favorable and unfavorable conditions.
1. Data regarding product-engineering, product-design, basic type of process and operations, assembly and sub-assembly methods.
2. Sequence of operations — What is most advantageous with minimum production cost.
3. Material specifications and standardization and the quantity of raw materials required.
4. Economic lots and economic order quantity which will be used in inventory decisions.
5. Rate of output per hour, per day, per week and per month.
6. Materials cost, labour cost and overhead cost per unit, labour and overhead costs per hour.
7. Customer’s order on hand and their expected date of delivery.
8. Information regarding fixtures, tools, jigs and dimensional gauging instruments that are required for production.
9. Normal, maximum and average production capacity of the plant.
10. Quantity required immediately for stock purposes and for delivery purposes.
11. Full particulars regarding operating personnel and personnel policy of the enterprise.
12. Information regarding job analysis, merit-rating, type of training to workers for the effective performance of different jobs.
13. Full knowledge about the sources of raw materials, power generation systems and internal transport system.
14. Information regarding time fixed for each operation, rate of obsolescence of the plant and loss in storage, etc.
15. Up-to-date knowledge of modern development in the field of production process and techniques.