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What is Production Planning in Manufacturing ERP ?

  • ERP Software plays the most important role in handling manufacturing processes. The process behind the production of any items involves a series of complicated tasks to form a final product. This product is not produced as a single one but a huge number of items or goods are being manufactured each and every day against the sale order they receive. Hence obviously there should be a clear planning on what we are producing, how much quantity and what are all the raw materials required. In this blog, let’s discuss what exactly is a Production Planning in Manufacturing ERP.

    Production Planning :

    After getting the sales order the next step would be to set a clear plan to produce the required goods. To define this, let us consider the following simple questions.

    • How much quantity of goods needs to be produced ?
    • How much raw materials or other resources should be allocated for the production ?
    • What is the production capacity of the shop floor unit ?
    • What are the processes involved for the production ?
    • How economical is the job done ?
    • How many laborers are required for the operation ?
    • What will be the machine run time and the complete schedule for this project ?
    • Will there be any waste or scrap materials ?
    • How to reduce those wastages and make the maximum use of raw materials ?

    Now with all the above questions one might be sure about the operations and delivery date of the product. In order to prevent any bottle neck moments like running out of materials, lack of knowledge on the process flow, breakdown time of machines and other labor related problems a production planning is the most appropriate business solution which can be done effectively using an ERP Software.

    What are the objectives of planning ?

    Objectives of Production Planning

    Continuous Production Flow :

    The Production planning helps ensure that a steady operation is being carried on, preventing any breakdown or interruptions in the process flow. The planning is done utilizing all the resources and making maximum use of machines to provide a continuous supply of goods.

    Optimum Inventory Levels :

    More the inventory then more the investment being idle at the store. It is important to reduce the inventory levels and maintain them to its optimum level. This can be achieved by proper planning that could use inventory at the right time and reduce excess storage.

    Effective Utilization of Resources :

    The production planning is made so as to ensure that each and every resource in terms of raw materials, machines & tools, labors and purchases are all done with maximum utilization thus resulting in lower waste and high returns for the company.

    Provides a better work environment :

    Since the work is planned and operated as per schedule without any interruptions the laborers are able to complete their tasks on time ensuring they have provided with all necessary holidays and week offs. This is a result of a healthy working environment.

    Minimize Waste :

    Every project, every task and every production obviously results in waste generation. But it is important to keep track of those waste materials and can be used for upcoming processes. Thus monitoring the wastage can help maximum usage of the raw materials further reducing the generation of waste metals.

    Types of Production Planning :

    Types of Production Planning

    There are five major types of production planning in the manufacturing industry.

    1.Job based Production Method : The job based or project based production planning is something that focuses on producing a single product handled by a small team depending on the customer’s requirement.

    2.Batch Production Method :  Batch method of production planning is used when producing the goods as a batch of numbers. For example, food processing uses a batch method.

    3.Flow Production Method : This method is used when you are manufacturing a collective group of items which are assembled together to form a final product. The flow of tasks will be in sequential order, not interrupted by any means.

    4.Mass Production Method : This is very similar to the flow method but here a large number of single items are being manufactured within a short duration.

    5.Process Manufacturing Method : The process manufacturing is opposite to a discrete manufacturing type, where the final product quantities are not counted but measured. This type of production planning is used in chemical manufacturing where the final product is liquid, gas or food processing.

    Benefits of Production Planning in Manufacturing Industry :

    • Idle Time Reduction : Idle time is nothing but the unproductive time that occurs when a machine or labor is not at work. This is caused due to the lack of proper planning. But using an ERP system this can be avoided and efficiently make use of the resources.
    • Enhanced Customer service : Once the productivity is enhanced then it automatically results in timely delivery of the products. This in turn helps to gain customer’s loyalty. Sustaining among the competitors requires a lot more skill and consistency which an ERP could help you achieve. 
    • Smooth workflow : Once you implement ERP systems for your business, then you can streamline your business processes which further help you to see continuous improvements in the operations. The ERP tool eliminates unnecessary tasks, avoids longest processes and eradicates repeated tasks and errors. A smooth running business helps sustain your customers for a long period. 
    • Quality Improvement : The quality inspection is a mandatory process while it comes to the ERP system. The production planning involves a regular production check up that facilitates quality consciousness among the employees, also through various quality and safety programs.
    • Capture the Market : With all the above benefits, it is clear that an ERP system with production planning results in a smooth running of business with assured quality products and timely delivery. As these are the main features that customers expect from a company and hence you could win the competition and be ready to face any market fluctuations.

    Production Planning in manufacturing industry

    Conclusion :

    It is so evident that production planning could ease all the complications of a business process especially in a manufacturing sector. This can be achieved by adapting to an ERP system for your company. Choosing a software with the right features is still a challenging task but we could help you in that part. For more queries feel free to contact us.

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