Production Planning System Each business that is started does not Just begin with an idea and some money to invest into their future endeavor. There are several steps before entering a new project that requires some type of production. One of those key steps is developing strategies. In this paper, I will discuss the different steps that are taken to create a strategic production plan from start to finish for a company and illustrate how developing these strategies, is an important factor of the outcome of how successful an organization will be and how they can continuously provide for their customers.
Below is a visual chart off what The first steps in developing a production planning system first begin with asking some of the basic questions about the actual ending product. We need to know what we want to make. What does it take to make it? What resources are available, which ones do we need to get to produce the item and how much do we need? These questions at hand are considered to be priority. This is what my partner and I had to do when we started our clothing line business.
After those questions are answered, we then need to have a realistic view of the capacities f the business and if it would be able to produce what is needed when it’s needed. If there is a difference between the companies’ priorities and capacities, it’s important to work at resolving the conflict. The key is to match the two as close as possible to avoid problems with losing money or manufactures that could have been avoided in the beginning. This first approach of question asking is taken for each level of major planning and control which begins with the strategic business plan.
This level is generally where the Coo’s and other high level managers of companies guru out a way to build obtain funds to pay and get the materials required. If materials are needed to be purchased, a purchasing plan must be developed. In my case, we started off with buying the garments from one place and sent it to a printing shop. After that level has taken care of their part, the focus then shifts to the second level of planning and control which is the production plan. In the production plans, also known as the operations plans, we once again have to ask ourselves some questions.
Some of these questions involved the quantities of each product group and how many would be produced each period. We need to have a projection and desired inventory level that satisfies the company. The best way to do so and stay organized would be to make a chart displaying the information. Do we have the proper equipment, labor, or material for the Job? And also, are the resources we have available to the point that they will benefit the overall process? This is what we call the material requirements plan.
If my clothing line manufactured the printing of the shirts, we would have needed a screen printing machine along with ink, proper lighting, software and somebody that was capable of using the machine properly. Afterwards we must implement the execution plan which includes a list of the materials required to produce the orders. For my clothing line we also used the same method. We ourselves wanted to start with a large quantity of shirts, but the cost was too high for all the specifics we asked for.
So we had to sacrifice the amount of inventory and lower it and also we our projection level because our brand was new, so we began we twenty-five shirts. After we approved on the plan, we went into the next level which was developing the master production schedule. Our master reduction schedule displayed the quantity of each item that was to be made for each period. Since it was our first time, we only made a schedule for two periods which were six month intervals. Capacity management at each level in conjunction with resources must be made right or else the plan must be changed to better fit the firm.
Poor resources will result in poor results which meaner missed production schedules. If the resources of the company surpass its production plan considerably, then it can lead to wasteful resources that can end up costing the company, so the reflect balance is important. If we began with a large inventory, we may have lost a lot of money due to the shirts being at a standstill because we were a new brand. We didn’t have enough money to promote and advertise like we wished to, so the inventory had to be based off the following we were getting via the internet and our local area.
For my clothing line, I had to hire a subcontractor to print the designs I made to the fabric. Before we choose the company to work for us as an outside resource, we had to make sure that the printing company was flexible. We had to be ere that if we needed a small quantity of orders that they could be handled instead of printing one hundred extra shirts. We had to figure out a way to close the gap between what was priority and the capacities. These are all ways of developing the production plan. There are three strategic plans that managers can use.
The first basic production plan strategy is chase. The chase method is used when inventory cannot be used or when resources are flexible and inexpensive to change. An example of this would be a method that my clothing line took when we couldn’t order our clothes in bulk. We went to a third party and got the shirts made one by one, but the cost to make a single t-shirt was much more. But in order to continue having the company run smoothly without customer complaints and issues, we took that chance. It was our way of closing that priority and capacity gap until a better solution could be produced.
Another type is called level. Level establishes a demand line that is averaged out and sets the production rate to that point. This comes after a firm has been around for two or more quarters. This level of production is based off the emend of the last quarter and if it was successful, the production level is raised. If it seemed to lack or the company barely sold its inventory, then the level of production will be dropped or maintained. The level method is normally used when resources become too expensive to change.
The best way to find the production rate is by using the formula which is when we subtract the sales minus the open inventory plus the end inventory and divide that by the number of production periods (Sales – Open NV + Open NV / # of Production Periods). Whenever the demand is lower than the level f production, then that is the time when the company needs to create new inventory. If the demand is above the level production then we are to use that extra inventory. The last type is a combination of the level and chase methods called hybrid.
There are special occasions where some firms would make custom, or make to order products. My clothing generally does that, we print custom deigns or style shirts for an extra fee. If we were to wholesale our t-shirts, then we for those instances we would print our personal tassels design indicating what size it is. From there we would send n t Nair too third party to get printed and sent to the customer. We aim for the process to be Just a quick as purchasing a normal tee so that the customer does not have to wait.
After the production plan specifics are clear and a plan has been put in action, the firm must now figure out the most efficient way to sell their product. This is where the sales and operations planning starts. The sales and operations planning can be used in various ways such as updating the strategic plan. It can do so by the results of the previous quarter and how much was sold previously. It gives managers a chance to see if the demand matched the projected inventory and physical inventory that was left over.
This method of planning also enforces functional plans to be realistic and coordinated so that shipments are on time. It represents a plan to achieve company goals and objectives. Strategies should be put in place to keep the company in the right direction to become more successful in the future. It also provides the management with visibility of production, inventory and backlogs. In conclusion, I have learned that the planning in an organization is important to the success of the company.
Utilizing the company’s’ resources, balancing the capabilities and the priorities can all take a business to the next level of a corporation. Having the edge on the competition is also important to find the most reliable and cheapest source to produce the finished product. Making sure you don’t spend too much money on unnecessary inventory but to be sure to use production planning depending on the demand of the product. It’s important to remember that we have three ways to do so with the level, chase or hybrid method. Overall if these methods are utilized to its best ability, then a company should surly be successful.