What is Production Planning & Its Types

What is Production Planning & Its Types

Production is a vital activity within an enterprise involving transforming raw materials into finished products. The manufacturing process requires critical evolutions to produce essential products. As a result, production planning forms an integral part of modern manufacturing operations.

What is Production Planning?

Now let’s understand what production planning is. Product planning refers to fixing the manufacturing plan by providing information for its execution, collection, recording of data, a timeline of the process, etc. It enables the entire team to work efficiently. Carrying out production planning occurs by speculating the market share, trends, sales and marketing, and overall profits.

Production planning is also beneficial while curating retail merchandising strategies. Product merchandising and product sampling are part of this strategy, too. Planning in any type of production system helps identify the loopholes in business, efficiency, and the scope for business success.

There are Five Main Types of Production Planning to Choose From:

  • Job-Based/Project-Based Planning:

A production type in which only a single product is manufactured at a time and handled by either one individual or a group of people is job-based planning. Small scale businesses that do not require intense execution stages, this method of production plan can be employed.

In addition, large customized orders and complex production projects like building a personalized house can also be a part of job-based planning. Make-to-order projects and special customer requests are generally handled personally with individual assistance provided by highly skilled and expert professionals. For instance, designing and manufacturing a jewelry piece, getting a haircut, or renovating an apartment come under job-based planning.

The advantage of job-based planning in a retail setting is that businesses can tailor their retail product merchandising strategy according to their needs and consumer study. Product promoters are employed in retail stores depending on the product to be sold and the business goals. Customer satisfaction increases while workers stay motivated.

  • Batch Method:

The batch method refers to the production of similar items in groups. These items go through different stages in batches. Primarily, the manufacturing type requires machinery; however, it does not eliminate the need for human resources. Also, the type of product determines the degree of manual intervention required in this process. Usually, workers are only part of the beginning and end of the production process.

The cost of producing each unit reduces as it generates more significant numbers of products. Moreover, when raw materials are bought in bulk, the production cost becomes less expensive. However, the business might incur higher set-up costs in the initial phase. A challenge in batch method planning is the requirement for extra storage space to store raw materials.

  • Flow Method:

The flow method is a demand-driven manufacturing method and is similar to the batch method. It seeks to improve the material flow and the workflow. Moreover, the continuous movement of units characterizes the flow method through the product line.

The distinction between the two methods is that production can happen continuously as an assembly line in the flow method. Finished products are delivered faster to the consumers. Materials move smoothly from one production stage to another without interruptions or lags. The need for labor is further reduced as most of the process is machine-based.

An advantage of this planning method is that finished goods are delivered faster without holding inventory for longer durations. Product promoters will be on their toes at the retail stores, selling and restocking the shelves without any lag. The process ensures reduced production costs and saves up on time.

  • Mass Production Method:

The mass production method is best employed when large numbers of the same product need to be manufactured quickly. The planning process is very similar to the flow production method. Mass production is primarily an automated process with facilities dedicated to specific purposes.

The changeover time involved in manufacturing is reduced in this method. The overall production output increases and manufacturers can win more profits since the production costs are reduced drastically. Canned products, household appliances, over-the-counter drugs are examples of mass production.

The best part about this method is that the labor and raw material costs reduce. However, machinery costs are higher, and the set-up becomes expensive. The production lines are difficult to change and aren’t very flexible. Moreover, the maintenance costs are very high.

  • Process manufacturing Method:

The process manufacturing method is similar to the last two methods discussed- Mass Production and Flow Method. However, the process manufacturing method uses specific sophisticated machinery at every step of the production process. However, process manufacturing ensures continuous automatic movement of items, including labeling, packaging, and circulation within the factory.

The finished product obtained through this production method is not considered a discrete unit. Production of liquids, gases, chemicals, etc., are examples that are included in this production method. Waste or by-products are commonly generated when the process manufacturing method is employed.

Production Planning vs. Production Scheduling

Production planning and production scheduling are two essential functions of manufacturing. Planning is developing a comprehensive strategy to meet the goals. On the other hand, production scheduling is that operational plan that helps execute the production plan. It involves determining the start and end dates for each task to ensure timely completion of production activities. Read the detailed operations of production planning below.

Production planning process

It involves –

Setting targets

– Your production planning first concern should be the target audience. Which age group are you targeting? If you know the answer to this, you can start with the further steps.

Determining the production capacity required

– Now that you have known which are you targeting, what are their needs and how much they need, you need to start planning with the manpower. In production of products we require man power whether for operating the machinery or delivering the goods.

Forecasting the demand for the products

– Research about your market and develop a plan for resource allocation, including labor, materials, and equipment.
The primary goal of production planning is to create an effective and efficient production process that can meet customer demand and maximize profitability.

Production Planning KPIs

Key performance indicators (KPIs) of production plans are –


– It helps track the time during which production is not in force during scheduled operating hours.

Setup time

– The time it takes to switch between duties, including changes to the equipment, raw materials and workforce.

Production rate

– It is the number of units produced during a specific period. By comparing the actual production rate with the planned rate, identifying strengths and weaknesses is easy.

Overall equipment effectiveness (OEE)

– It measures overall manufacturing productivity, such as quality, performance and availability.

5 Steps to Make a Production Plan

Production planning can be made better if you incorporate these five steps:

Forecast product demand

– Know how much of each product you’ll need. You can gather the data that can help you with forecasting. And market trends and the economic situation will also help in this.

Map out production steps and options

– This step determines the processes, steps and resources needed.

Choose a plan and schedule production

– Select the cost, time required and risks for the production process.

Monitor and control

– Once production has started, track performance and compare it against the targets.

Adjust accordingly

– We can plan events but there are some things that are not in our hands, such as equipment failures and worker illness. In such situations you need to plan accordingly and use the back-up plan.

Production Planning Tools

There are types of production systems, and these tools include:

Gantt charts

– Among the different types of production system it is a detailed visual timeline that schedules tasks.


– To track simple production plans using spreadsheets is the best option for you in production planning.

Production planning software

– Many use enterprise resource planning (ERP) applications among different types of production systems, as they include production planning software and give a single solution for managing the entire business.

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