Answer to Question #241830 in Marketing for Penny

Question

Why production planning is important?

Answer 1

Discussion

Production planning is the act of developing a guide for the design and production of a given product or service. Production planning helps organizations make the production process as efficient as possible. Production planning originated to optimize the manufacturing process, and today its general logic is applied in various forms to design, production and delivery of software as well.

For many manufacturers, the techniques and strategies used in production planning have been extremely beneficial in improving their operations. Some of the most important features of production planning include the following:

• Customer Service Enhancement - The production planning component of pay-per-click ensures that the organization can deliver a finished product on time.Customers can benefit from having high-quality products being delivered promptly due to improved scheduling and optimized production. These improvements ultimately win customers over and can persuade them to establish a profitable and ongoing relationship with the manufacturing organization.
• Inventory Control - Proper inventory management can be a challenging thing to achieve as planners must balance holding enough inventory to satisfy customer demand while minimizing the risks and costs of holding too much inventory. With a promising production planning system, inventory planning becomes much easier. These types of systems allow planners to only purchase enough materials to fulfill orders which reduces the need for holding a lot of raw materials. In addition, they can provide the tools for utilizing a just-in-time scheduling strategy, which further reduces the need for holding finished goods or large quantities of work-in-process items.  
• Equipment Improvement - Production planning will ultimately unveil areas and machines that are not able to meet their production targets. These could signal a lack of productivity due to faulty equipment which can be remedied by scheduling regular maintenance and cleaning for the under-performing resources. This will enable the organization to have equipment that is able to meet the targeted production outputs and ensure that the resources are being used efficiently. In addition, the capacity planning aspect of production planning and scheduling will ensure that all resources are being utilized to their full potential. 
• Plant Morale Improvement - Stress can be a tremendous hindrance in manufacturing as it increases the likelihood of errors and defects on the shop floor. A production planning system that ensures a systematic workflow through the production flow allows planners to better quote lead times. The overall outcome is that activities are properly coordinated and there is no need to rush orders to meet deadlines. The shop floor personnel are then able to know what needs to be done and are able to meet their production goals without the stress of rushing orders due to a disorganized plan. 
• Idle Time Reduction - In manufacturing production, idle time refers to the paid time where an employee or machine is unproductive. Idle time is usually due to workers waiting for materials to begin production or on various machine repairs. These periods of low productivity can be costly for manufacturers. However, production planning is a viable solution to minimize downtime as it can effectively coordinate the purchasing and release of materials to ensure that every production step can start when scheduled. 
• Quality Improvement - High-quality products must be able to meet industry standards at various checkpoints in the manufacturing process. As production planning overlook all aspects of production from materials planning to resource optimization, this ensures that the quality of the finished goods is maintained. Having quality products is critical nowadays to ensure the satisfaction of customers. The customers will be more likely to choose and endorse the brand if they know that the products are consistently reliable and durable.

 

Reference

Dauzère–Pérès, S., & Lasserre, J. B. (2002). On the importance of sequencing decisions in production planning and scheduling. International transactions in operational research, 9(6), 779-793.