Production Planning is the systematic process of determining what to manufacture, when to manufacture it, and which resources to use, translating customer demand and forecasts into executable manufacturing schedules that balance delivery commitments, resource capacity, inventory levels, and operational efficiency. Effective production planning operates at multiple horizons: long-term planning (6-18 months) establishes capacity requirements and makes strategic decisions about equipment investments, medium-term planning (1-6 months) develops master production schedules and coordinates material procurement, and short-term planning (days to weeks) creates detailed shop floor schedules assigning specific work orders to machines and operators. The goal is ensuring production has everything needed (materials, capacity, labour, tooling) to meet customer requirements whilst minimising costs, inventory, and lead times.
The production planning process integrates multiple inputs and constraints. Demand management combines customer orders, sales forecasts, safety stock requirements, and inventory replenishment needs to determine what products need producing. Material requirements planning (MRP) explodes product bills of materials, calculating component and raw material needs. Capacity planning assesses whether available resources (machines, labour, facilities) can handle required production volumes, identifying bottlenecks or excess capacity. Rough-cut capacity planning provides high-level feasibility checks, whilst finite capacity scheduling creates detailed plans accounting for real-world constraints like setup times, maintenance windows, and operator availability. Advanced planning systems optimise schedules considering multiple objectives simultaneously (minimise lead times, maximise utilisation, reduce changeovers, meet due dates), producing plans that human planners would struggle to achieve manually.
Modern production planning systems integrate tightly with ERP, receiving demand from sales orders and forecasts, accessing real-time inventory and work-in-progress data, considering material lead times and supplier reliability, and generating actionable plans in the form of work orders, purchase requisitions, and dispatch lists. What-if simulation capabilities allow planners to evaluate scenarios (What happens if we add a shift? Can we accept this rush order? How does prioritising this customer affect others?) before committing to decisions. Real-time rescheduling responds to shop floor disruptions like equipment breakdowns or quality holds by automatically recalculating optimal sequences. Integration with MES systems provides feedback on actual performance versus plan, enabling continuous refinement of planning assumptions. As customer expectations for shorter lead times intensify and product variety increases, sophisticated production planning transforms from administrative scheduling into strategic capability enabling manufacturers to deliver faster, more reliably, and more efficiently than competitors relying on manual planning methods.
