Product Code Database
Production planning is the planning of production and manufacturing modules in a company or industry. It utilizes the resource allocation of activities of employees, raw material and production capacity, in order to serve different customers.Fargher, Hugh E., and Richard A. Smith. "Method and system for production planning." U.S. Patent No. 5,586,021. 17 Dec. 1996.
Different types of production methods, such as single item manufacturing, batch production, mass production, continuous production etc. have their own type of production planning. Production planning can be combined with production control into production planning and control, or it can be combined with enterprise resource planning.
In order to develop production plans, the production planner or production planning department needs to work closely together with the marketing department and sales department. They can provide sales forecasts, or a listing of customer orders."August-Wilhelm Scheer (1984) Scheer, A-W. "Production control and information systems." Methods and Tools for Computer Integrated Manufacturing. Springer Berlin Heidelberg, 1984. 138-178. The "work is usually selected from a variety of product types which may require different resources and serve different customers. Therefore, the selection must optimize customer-independent performance measures such as cycle time and customer-dependent performance measures such as on-time delivery."
A critical factor in production planning is "the accurate estimation of the productive capacity of available resources, yet this is one of the most difficult tasks to perform well".Solberg, James J. "Capacity planning with a stochastic workflow model." AIIE Transactions 13.2 (1981): 116-122. Production planning should always take "into account material availability, resource availability and knowledge of future demand".
Herrmann (1996) further describes the circumstances in which new methods for internal planning and control evolved: "The first factories were quite simple and relatively small. They produced a small number of products in large batches. Productivity gains came from using interchangeable parts to eliminate time-consuming fitting operations. Through the late 1800s, manufacturing firms were concerned with maximizing the productivity of the expensive equipment in the factory. Keeping utilization high was an important objective. Shop foreman ruled their shops, coordinating all of the activities needed for the limited number of products for which they were responsible. They hired operators, purchased materials, managed production, and delivered the product. They were experts with superior technical skills, and they (not a separate staff of clerks) planned production. Even as factories grew, they were just bigger, not more complex.Herrmann, Jeffrey W. " A history of production scheduling ." Handbook of Production Scheduling. Springer US, 2006. 1-22.
About production planning Herrmann (1996) recounts that "production scheduling started simply also. Schedules, when used at all, listed only when work on an order should begin or when the order is due. They didn't provide any information about how long the total order should take or about the time required for individual operations ..."
In 1923 Industrial Management cited a Mr. Owens who had observed: "Production planning is rapidly becoming one of the most vital necessities of management. It is true that every establishment, no matter how large or how small has production planning in some form; but a large percentage of these do not have planning that makes for an even flow of material, and a minimum amount of money tied up in inventories."John Robertson Dunlap, Arthur Van Vlissingen, John Michael Carmody. eds. Industrial Management, Vol. 65-66, p. 182
Related kind of planning in organizations
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