Planning activities matters in every area, both in business and in personal life.
Although this idea is accepted, or at least understood, by virtually anyone doing work where cost matters, conviction does not always turn into action.
Things get more complicated when several people are involved. Then, beyond individual conviction, techniques, information and the planning system must also be shared.
When it comes to production planning, companies often have little culture around it, both in setting it up and in day-to-day operations.
In the digital transformation of the factory, an integration tool that governs planning is increasingly necessary.
The goal of the production planning process
The main purpose of production planning is to guarantee the customer:
- the agreed delivery dates - On Time Delivery (the goal is to exceed 90%)
- the quality and quantity specifications of the product itself (Quality Assurance), with particular attention to non-standard products (Special Products)
and to keep under control:
- budget
- milestones
- outsourced activities
- unexpected events and their solutions
How the production planning process is implemented
Production planning is implemented through an activity plan that defines:
- the operating sequences and the relationships between activities (carried out in parallel, in sequence or linked to activities of other departments)
- the assignment of the resources and/or plants responsible for carrying out the activities
- milestone monitoring
- timely communication of changes to the plan (delays, over-allocations)
The role of a production planning system
Here are some key components of a production planning system:
- Sales & Operations Planning – The collaborative planning process starts from the interaction between Sales and Operations, both when setting it up and in day-to-day operations. Since this phase is difficult and crucial to building a good plan, it is essential that the system makes it significantly easier
- Planning and control - Planning is useless without knowing, well in advance, whether what is planned is actually feasible (above all, material availability and production capacity), and the actual progress of what is already in production. Our planning system must therefore talk to the other business systems (ERP, MRP, MES)
- “Closed Loop” interaction means reacting quickly to feedback from the field while creating value along the entire product life cycle
- Planning reports – Lists must always be up to date, automatically linked to changes in the activity plan, to make clear the real priorities, what needs to be done, by when and who is responsible. This is also where the digitalization of information comes in: the keywords here are “paperless & seamless”
- Data updates: this activity, needed to ensure that planning information is correct and timely, must be automated as far as possible and/or drawn from other company information sources:
- Sales Forecasts and Orders from ERP
- Work Orders, Purchase Orders and Goods Receipts from ERP
- maintenance of MRP parameters
- information from Bills of Materials and Work Cycles
- reports of production shortages
- progress from the connected machines on the production line through IIoT protocols (such as MQTT)
- other information linked to events recorded in the company’s business systems / ERP (such as work order issue or goods receipt)
The gradual evolution from unstructured management to a shared tool
Especially in small and medium-sized companies, the first choice tends to be “home-made” planning solutions built with the personal productivity tools at hand (a spreadsheet or a Project Management tool).
Although the result is not ideal, this approach still lets the company take action and gradually become aware that it needs an increasingly advanced tool.
How to choose a planning tool
From our experience, combining our specific skills with what we hear from our customers and prospects, we can point to the following key factors to consider when selecting a planning tool:
A well-designed user interface, clear and requiring as few interactions as possible for the most common operations (every extra step is a cost)
Agility in setting up and updating plans (quick reaction to changes, with planning information updated accordingly)
A simulation environment for the company’s current and future state
Integration with the company information system and the production line, to ensure timely, automated processes and data flows between departments (Production, R&D, Procurement, Sales) and toward customers and subcontractors
An archive of historical planning and actuals data and of technical documents for:
- qualitative analysis of processes (through reporting tools and Machine Learning algorithms)
- replicating (reusing) standard planning scopes or those already tried in the past (especially for the production of Variants and Special Products)
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