What is production planning?

Production planning or production scheduling is a term which is used to cover all the aspects of operations, starting from workforce activities to product delivery. Production planning is most often seen in manufacturing environments, but many of the involved techniques can also be used by service oriented businesses. Efficient use of resources is the prime focus of production planning. Sometimes it may be called operations planning as well, but the distinguishing factor is that production planning is focused on the actual production whereas operations planning looks at the operations as a complete whole. Production planning can be called a subset of operations planning.

Static and Dynamic Planning

You will find two types of production planning, static and dynamic planning. Static planning carries the assumption that all the steps in a process are definable and will not change. Dynamic planning on the other hand, assumes that the steps in the process will change, hence nothing is planned until demand is received. Dynamic planning is best for those environments where there is a high degree of customization.

Forward Incremental Planning

This is a dynamic planning method. FIP is implemented from the initial receipt of the order. All the actions required to fulfill the order are prioritized. The most important goal of FIP is to decrease lag time. While it is quite effective, it’s only limitation is that it assumes that no other actions are in progress, something which is not realistic. This may be a great limitation for some industries, but for those companies which have products with a high degree of customization, it works very well and is a powerful tool.

Backward Incremental Planning

This is also called BIP and is the other side of the coin of FIP. Backward Incremental Planning looks at the requirements from the due date backwards, and it organizes the process accordingly. BIP works exceptionally well where the deadline is more of a requested completion date and where completing the order in a shorter span of time has no additional benefits.

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