FAQs (Frequently Asked Questions)On Production Planning and Optimisation
Following are some of the frequently asked questions (FAQs) on Production Planning and Optimisation that we have encountered in our speeches, workshops, seminars, and other forums. Feel free to ask more questions if your particular question is not answered below.
Why we are qualified to write this list of FAQs on Production Planning And Optimisation?
VERY FEW PEOPLE KNOW SUPPLY CHAINS LIKE WE DO - retail, beverages, food, milk, dairy, meat, livestock, explosives, chemicals, cotton, rice, graphite, solar power, natural gas, crude oil, fertilizers, electronics, packaging, glass manufacturing, machine parts, automobiles, industrial goods, mining, etc are just some of the industries where boards and executives have benefited from our proprietary knowledge of the supply chains.
Click on our project methodology above to see how Production Planning and Optimisation is an integral step in each and every project that we have undertaken in the last three decades.
Since when no one had heard of supply chain, our co-founder Vivek Sood has been considered one of the most authoritative professionals in the field when it comes to the subject of supply chain analytics in Australia, Asia, North America, South America and Europe.
He has written four seminal books about restructuring supply chains to gain massive advantage in business. He also regularly delivers keynote speeches at business schools and conferences such as University of Technology Sydney, Supply Chain Asia, Asian Bankers Forum, APEC Business Advisory Council.
He has been quoted in the authoritative business press and over 100 academic papers written by supply chain researchers around the world. Vivek and his team have examined thousands of supply chains during their projects over the last three decades and helped hundreds of executives build safe, cost effective and sustainable supply chains and careers.
FAQs (Frequently Asked Questions) on Production Planning and Optimisation
Why Do Some Of The Smartest Production Engineers End Up Being Sent To Production Planning?
Production planning is difficult - it entails complex mathematical calculations, balancing of production line utilisation against customer order fulfilment, and the availability of the labour against inventories and sales force pressures. Not only do you need to be able to balanace competing requirements from a diverse set of stakeholders, you need to be able to maximise profitability at the same time. A small decision in production planning can have a huge ramifications for a company, both in terms of the profits, and in terms of the supply chain risk. That is why some of the best supply chain personnel come out of production planning.
What Is So Hard About Production Planning?
Production planning is essential for assuring cost minimisation, ultilisation maximisation and labour deployment. A small wrong decision in production planning can easily sink an entire company. What is worse is that most of the time no one on the board is any wiser about the risks and costs of the wrong production planning decisions - otherwise they would have been watching the production planning team with an hawks' eye all the time.
Explain The Rough Stages Of Production Planning And Optimisation?
The key rough stages in the traditional production planning and optimisation process are shown below:
What Is Meant By Drafting The Plan?
It is a primary step in production planning that produces rough draft taking into consideration the optimum utilisation of the following:
- Raw materials and supplies
- Team members - regular shift time and overtime
- Workstations and production lines
- products and product families
- customers, orders, backlogs, filling rates, SLAs
What Is Meant By Production Routing?
In some manufacturing units routing is so clear and pre-defined that there is no need for any discussion on the topic. In others routing is the key to drafting.
Routing is the route to be followed during each step of the production process. The manufacturing route defines the way from raw materials through to the manufacturing of a finished product.
When done correctly, you'll know at what stage your item is at and which machine, tool, or work center it needs to travel to next.
What Is Meant By Scheduling?
Production scheduling takes a well drafted and routed production plan and takes it to the next stage - of shift by shift, production station wise scheduling of the tasks in the production plan.
It takes it to the next stage of granularity and increases the detail and reduces the scope of time frame covered. When an unusually big order comes in, you don't have to estimate, as you have the recipe for everything your businesses produces at your disposal. This recipe is vital in your bill of materials (BOM) and is a cornerstone of your Master Production Schedule (MPS).
What Is Meant By Execution?
The Execution is the final step - it is when you issue supporting orders or instructions to enable actual production in the plant.
Explain The Importance Of Production Planning And Optimisation?
Let us imagine what the world would look like without a production planner. You would have customer orders piling up and unhappy customers screaming in the ears of the sales staff and customer service because they are being fed to the line in a haphazard manner. those customers who are more influential would be screaming in the ears of your CEO, or even your board members.
But those are not the only people who would be screaming.
You would also have your CFO, finance department and your shareholders screaming because of the costs that are way out of line with the industry average. Even if you deploy the same machinery and technology, if you waste the machine time and manpower, your costs would be much higher than the norm.
Finally, even your staff would be screaming because of haphazard loading of the lines and work schedules.
If you want to avoid all this screaming, get good production planners, good production planning tools and good training in production planning.
What Is The Role Of The Production Planning Software?
In large scale plants, or in complex manufacturing operations production planning can easily become a very complex set of calculations - similar to voyage loading planning for a ship. An optimum plan can take several hours to create and an equally long time to recreate every time one of the key parameters - inputs, outputs or constraints - changes.
A good production planning software can be heaven sent tool which mimics the same manual calculations that a production planner would do without the tool, but much faster. Some of them automate the process, sometimes at the cost of introducing assumptions or simplifications that are untenable.
Cost of production planning software, and the additional complexity introduced by such software are other factors that are major considerations when assessing its potential role.
What Are Some Of The Key Considerations In Production Planning?
- Raw materials and supplies - do we have all the supplies for the production plan or do we need a rush order to work the plan?
- Team members - regular shift time and overtime - will we utilise regular shift time for all the crew? Can we reduce the overtime pay by adjusting the plan?
- Workstations and production lines - are all the work stations and production lines fully utlilised? Is there too much downtime due to change over or some other reason?
- Processes - are all processes under control and working to optimum quality level?
- Products and product families - are we manufacturing the right products and product families?
- Customers, orders, backlogs, filling rates, SLAs - will this plan result in happy customers?
- Inventories - will we keep inventories under check while maximising customer happiness?
- Cost - is there a way to reduce the total cost of production even more (without jeopardising the revenue)?
There are more considerations under each of the above headline - and there are people under each of them acting as a pressure centre (or stakeholder in the production plan) all the time.
I Am The CFO/COO Of My Company - How Can I Make Sure That The Production Plan Is As Good As It Gets?
If you have production planning skills yourself - you can recreate your own production plan with the same parameters, and compare your plan with the current production plan a few times.
However, if you do not have production planning skills there is no way of checking up on the production plan. All you can do is make sure that the production planning process and skills levels are robust enough, and are fit for the purpose.
Besides that, all you can do is furnish appropriate tools and trust the professionals to do their job as best as they can.
Some companies have tried comparing one tool against another but that strategy is fraught with danger due to multiple assumptions built into every tool.
How Can I Make Sure That As A Production Planner, CFO And COO Are Happy With The Production Plans?
You cannot. As a production planner your job is not to make anyone happy - it is to make the best plan you can under the circumstances and keep adjusting it to the best of your abilities with the changing realities.
There are far too many competing interests to look after, and almost everyone will be unhappy with you almost all the time. Pandering to any one special interest group (SIG) willl only get you in more trouble in the long run.
What Is The Role Of The Shop Floor, And Its Supervisors In Production Planning?
Effective production planning helps you get the most out of your company's people. Shop floor supervisors are some of your best allies in production planning.
Your people are the key asset for your business. They play a crucial part in the manufacturing process optimisation.
Make it your business to know your people, including their abilities and weaknesses. This way, you can help the supervisors assign each of them to the most practical tasks.
What Can You Do When Your Production Is Already Running At Full Capacity?
Try pushing the boundaries a little bit at a time - within safe limits. You never know what your plant is capable of till you try. Many production parameters - such as standard times, and set up times are not set in stone as they initially appear.
However, make sure safety is your first priority.
Why is raw material so often a problem for Production Planners? What is the solution to this problem?
Raw material becomes a problem when:
- Finance is tight and you are skating on thin ice to keep the supply chains running
- Vendors are scarce due to the quality requirements
- Imports are not allowed and local vendors are unavailable
- Vendors are far and supply chain is too long to be reliable
- Logistics is slow and unreliable
This problem is difficult to solve. You need a root cause/s analysis and work on the root cause elimination.
How can logistics act as a saviour for Production Planning?
Both - on the input, and the output side - fast and reliable logistics can save a product plan in trouble. They can bring rush order of supplies from the vendors by chartering planes, trucks or ships and have raw material available when you had no hope of getting it in time for your production run.
Similarly, on the outbound side they can get last minute production to the customers just in time for them to use it when they want.
It is hardly a surprise that most production planners try and stay on the good side of their logistics departments and vendors.
How important is mathematics In Production Planning?
Sooner, or later, mathematics is going to enter the discussion in any consideration of production planning. You can probably do it all in Excel, if you do not have a specialized production planning tool in your company, but having solver or optimiser type of function is very helpful for linear programming and its associated methodologies that are frequently deployed in production planning.
What are some of the best books to learn the mathematics involved in production planning?
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Notes on FAQs
Production planners success depends almost as much on their ability to think and calculate, as on their ability to communicate clearly even when they feel reticent. Comment below if you are a production planner - which points you agree with, and which points you disagree with. Help others to help yourself.
Clearly, any such list of frequently asked questions (FAQs) about supply chain can never be fully exhaustive. Neither is anyone, including us, the final authority and arbitrator on this or any other topic.
You will have your own opinions on many of these topics, and will have many other questions.
We throw open the comments section to you for your opinions and questions. We will try to address all of these, and the best ones will attract a reward in the form of one of our books, or publications.