As a small manufacturing company, it’s extremely common to face challenges regarding production planning and scheduling.
Coordinating all the raw materials, equipment, and staff that create your products, and then - on top of it all - also ensuring timely delivery to customers can be a daunting and almost impossible task.
Implementing efficient production planning and scheduling for your small business can save time and money, reduce wastage and errors, increase productivity and profits, and improve customer satisfaction.
In this guide, we will explore production planning and scheduling best practices for small manufacturers.
What is production planning?
Production planning is the process of creating a detailed roadmap for producing goods or services. It involves determining what needs to be produced, when it needs to be produced, and how it will be produced.
This includes identifying raw materials needed, estimating production time and costs, and coordinating all resources involved in the production process.
Effective production planning helps manufacturers stay on top of their operations by ensuring that production is aligned with customer demand, inventory levels are optimized, and resources are utilized efficiently.
Free Download: Production planning template for Excel and Numbers
What is production scheduling?
Production Scheduling involves creating a timetable for production activities based on the production plan (known as a Master Production Schedule or MPS).
It includes assigning tasks to specific machines or employees and setting start and end times for each task.
A well-defined schedule helps manufacturers meet deadlines, track progress, and make adjustments as needed to avoid delays and bottlenecks.
Now that we better understand the concepts behind production scheduling and planning, let’s take a look at how best to implement them in a small manufacturing company via several best practices.
Make to order production planning vs. batch production planning
There are slightly different considerations when production planning for make-to-order situations.
This type of planning involves producing goods based on specific customer orders rather than forecasting future demand. Make-to-order production requires a flexible and customizable approach to ensure that customer’s needs are met efficiently. Software solutions are typically the best approach to take as orders can be imported from multiple sales channels and matched to manufacture records.
Production Planning & Scheduling Best Practices
Analyze demand and capacity
The first step in production planning and scheduling is to analyze demand and capacity. This includes forecasting demand, evaluating available resources, determining lead time, and identifying constraints.
A demand forecast helps you to estimate the production volumes needed to fulfill customer orders. Evaluating available resources such as raw materials, equipment, and personnel helps you to confirm your ability to meet customer demands.
Determining lead times is essential to ensure that you meet customer requirements within the promised delivery time. Identifying constraints such as time, cost, and resource availability can help you to identify areas where operational improvements are needed.
Set your production planning metrics / KPIs
Production planning metrics or key performance indicators (KPIs) are essential for monitoring and improving production processes.
These can differ based on your particular business structure and market, so it’s wise to take some time to consider the KPIs that will represent your production process.
Some common metrics used in production planning include on-time delivery, cycle time, lead time, and inventory turnover rate.
Create a production schedule
Once you have analyzed demand and capacity, you are ready to create a production schedule. As we discussed earlier, a production schedule details the sequence of activities, resources required, and timelines for each operation involved in producing a product.
It is important to consider lead times, available resources, machine time, and personnel availability when creating a production schedule.
You should also consider the critical path, which is the longest sequence of dependent activities that must be completed within a given timeframe to meet customer demands.
How to create a production schedule
- Identify all operations involved in producing the product - this includes creating a bill of materials for the product, and also any documentation on how to produce the product (i.e. SOPs or guides)
- Determine the sequence of operations based on any dependencies and constraints - this involves mapping out any sub-assemblies you have in your production process and ensuring that these sub-steps are completed in a timely manner to ensure the final product can be delivered.
- Estimate the time required for each operation, taking into account setup times, processing times, and downtime. Analysing manufacturing logs and averaging the labor time can be a good way of generating this information.
- Allocate resources such as team members and equipment to each operation based on availability and capability. Create or use a system that can assign team members to specific manufactures to see them through to either sub-assembly or finished production completion.
- Create a timeline for each manufacture, taking into account lead times and any potential bottlenecks
- Continuously monitor and update the production schedule as needed, based on changes in demand or resources.
Create ownership of your production schedule
While it can feel great to have a series of well designed production plans and schedules done and dusted, assigning a dedicated person or team to own the production schedule is crucial in ensuring its success. This person should have good communication skills, be detail-oriented, and able to prioritize tasks effectively.
Their responsibilities may include coordinating with different departments, tracking progress against plans, and addressing issues that may arise during production. This role is usually called a Production Planning Manager,however can also be referred to as a Production Manager, Operations Manager or Warehouse Manager.
In smaller manufacturing situations this role may be performed by a responsible member of the shop floor or (in the very early days) the founder of the business.
Communicate and collaborate
Effective communication and collaboration between different departments is essential for successful production planning and scheduling. This includes regular meetings to discuss priorities, progress updates, and addressing any issues or bottlenecks that may arise during production.
Having open communication channels can help ensure that everyone is on the same page and working towards the same goals.
Collaboration also extends to involving employees in the production planning process, as they often have valuable insights and suggestions for improving processes.
Create a realistic schedule
When creating a production schedule, it’s essential to be realistic.
Avoid overloading your production schedule and setting unrealistic deadlines for tasks, as it can lower team morale due to the production team’s inability to meet or deliver these objectives.
An accurate understanding of your capacity, lead times, and constraints will help you create a feasible schedule that can be consistently met.
Implementing Production Planning and Scheduling Software
Small manufacturers often rely on manual methods or simple spreadsheets for production planning and scheduling when getting started. However, as the business grows, managing production using these methods may become more challenging, so it’s wise to investigate a software solution as early as possible.
A production planning and scheduling software (PPS) solution helps small manufacturers to streamline their production planning and scheduling processes. A PPS automates repetitive tasks such as data collection, demand forecasting, production scheduling, and inventory management.
It enables real-time monitoring, alerts, and updates of your production progress, inventory levels, and resource utilization.
Using a PPS can help small businesses to reduce time, errors, and costs associated with manual processes and increase efficiency, accuracy, and profitability.
A PPS can be either a standalone product or, in most cases, a suite of tools available in either an MRP or ERP product.
Investing in a production planning tool can help streamline your processes and provide visibility into your operations. There are many affordable options available that cater specifically to small businesses.
Craftybase is a cost-effective small business production planning tool tailored toward small-scale manufacturers and offers a full suite of reports and data to set KPIs and monitor their progress. Try us for free today!
Monitor and review progress
Monitoring and reviewing progress are essential to ensure that your production planning and scheduling processes are on track. Real-time monitoring using software like the ones we discussed above enables you to detect and address issues before they become major problems.
Regular reviews also allow you to identify areas for improvement, measure performance, and adjust your plans as needed.
Why is production planning important?
Production planning is crucial for small manufacturers to meet customer demands, optimize resources, reduce costs, and improve efficiency and quality. It enables businesses to balance supply with demand by creating realistic schedules that can be consistently met.
Small manufacturers who invest in production planning tools or software can gain a competitive advantage by streamlining their processes and improving overall performance.
By implementing lean principles and utilizing production planning best practices, small manufacturers can achieve their goals and grow their businesses successfully.
What is MPS in Production Planning?
MPS stands for “Master Production Schedule” and is a key component of production planning. It details the specific quantities and schedule for each product to be manufactured, taking into account factors such as lead times, available resources, and customer demand. The MPS serves as a guideline for creating the production schedule and helps manufacturers prioritize production tasks to meet customer requirements effectively.
Production planning and scheduling is a critical activity for small manufacturers who want to be competitive, profitable, and customer-centric.
By analyzing demand and capacity, creating a production schedule, using production planning and scheduling software, implementing lean manufacturing principles, and monitoring progress, small manufacturers can optimize their resources, reduce errors, and improve efficiency.
Remember that production planning and scheduling is an ongoing process that requires continuous improvement and adaptation to changing customer demands and market conditions. With the right approach and tools, small manufacturers can excel in production planning and scheduling and achieve their business objectives.