Production Planning

Why it matters in an ERP context

Planning inside the ERP gives real-time visibility into operations, which is what makes decisions defensible and responses to demand quick. Planned outside it — in a spreadsheet beside the system — the plan and the stock position drift apart within days.

The workflow

1. 01

   Demand forecasting

   Estimate future demand from historical data and predictive analysis.

2. 02

   Material requirements planning

   Determine the materials and components needed to meet the schedule.

3. 03

   Capacity planning

   Assess the production capacity needed to hit the goals in the timeframe available.

4. 04

   Scheduling

   Schedule production tasks in detail against available resources and constraints.

5. 05

   Execution

   Initiate and monitor production, holding to schedule and specification.

6. 06

   Review and adjustment

   Evaluate performance against plan and adjust schedules, capacity or material plans.

The review step is the one most often skipped, and it is the one that makes the next forecast better. A plan nobody reviews is a guess that repeats.

What you need in place

• Demand management: Capturing and analysing demand signals to build forecasts worth acting on.
• Resource allocation: Assigning machines, labour and lines to production optimally rather than by habit.
• Production order management: Creating and managing production orders.
• Product data management: Products defined, including structures, components and the bill of materials.
• Resource master data: Machine, labour and production line information held as data.
• Inventory parameters: Stock levels, safety stock and reorder points set deliberately.

Implementing it

1. 01

   Define objectives

   Identify what the module is for — shorter lead times, lower inventory cost, or both.

2. 02

   Process mapping

   Document current production processes to find the gaps worth closing.

3. 03

   Configuration

   Tailor the system to the planning approach and integrate it with existing workflows.

4. 04

   Data migration

   Move product, inventory and resource data across.

5. 05

   Training and testing

   Train staff and test that planning behaves as intended.

6. 06

   Go-live and monitoring

   Launch, watch performance closely, and adjust.

Questions to ask

Metrics and KPIs to track