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:

Five types of production Planning system

  • 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 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.

Frequently Asked Questions

What Is a Production Plan?

A production plan is developing a manufacturing plan by implementing various targets, using multiple data points, and setting an execution plan. A production plan helps the manufacturing team perform efficiently and carry out their duties within the estimated timeline. Developing a production plan also involves studying the market and understanding its needs to ensure the retail firm adheres to it.

Why is production planning important?

A production plan is a detailed plan of the manufacturing process. It can help workers perform their assigned tasks with a clear goal. Thus, a production plan can help retail firms avoid confusion in the manufacturing process and operate efficiently. Overall, a production plan can help companies achieve their goals faster and in an organized way.

What are the 5 steps of production planning?

Product planning involves the following steps:

  • Estimating the demand for a product. Assuming the demand can help firms produce neither excess nor deficit number of items.
  • Look for suitable production options to implement the most efficient mechanisms.
  • Ensure efficient utilization of resources.
  • Monitoring and regulating the production process to ensure it sticks to the production plan.
  • Bringing about alterations in the previous production plan, if required.

What makes a good production plan?

A good production plan can have several features. For instance, an inefficient production plan must be cost-effective and ensures proper utilization of limited resources. Additionally, a good production plan also maximizes the employees' efficiency in completing the production process within or before the estimated time.

What are the things to consider in production planning?

One needs to consider the following factors during production planning:

  • The overall time and resources used in the production process.
  • The demand for a specific item
  • The capacity and efficiency of the employees, which must precede the allocation of tasks
  • Estimating the expected revenue to use resources accordingly
  • To weigh the risk factors and devise risk management strategies.