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2014/04/17

What Makes a Good Production Plan?

What makes a good production plan

With recent research showing that over the past three years, one in six companies are “reshoring” and moving production back to the UK, boosting supply chain and production efficiency is becoming a huge focal point.  Indeed, it has been recently announced that the UK government is offering £100 million worth of support to companies to increase their supply chain performance, especially those companies reshoring their manufacturing to the UK.  This is vital for our economic recovery.

With this in mind, producing an effective production plan with the ability to plan within multiple finite capacity constraints (factories, lines, shifts, resources and subcontractors) is fundamental for boosting supply chain efficiency and sustainability.  So what really makes a good production plan?

1. It needs to be SMART

As Benjamin Franklin once said ‘By failing to prepare, you prepare to fail’ and as with all best laid plans, they must be SMART (Specific, Measurable, Achievable, Relevant, Time Bound) in order to be truly effective.  Is your production plan meeting these goals?  Is it truly achievable?

2. It needs to be in line with your organisations objectives

Your organisation has priorities, whether it be reduced cost, hitting inventory targets or making sure production is in line with S&OP goals, it is these priorities that a production plan needs to support.  Indeed, the ability to utilise company knowledge, take into account multiple constraints and generate simple scenario simulations can quickly show you the best route to achieving your objectives.

3. It needs to be based on a good sales forecast

What is a production plan without an accurate demand plan?  Having flexible and intuitive forecasting software, managing trends, seasonality and an ever increasing number of promotions is the first step to obtaining a reliable forecast.  The ability for sales, marketing, finance and supply chain to collaborate effectively, using a common software platform, is the next step.

4.  It needs to combine short, medium and long term horizons

Many businesses create plans based on short, medium and long term horizons but fail to integrate them effectively.  Usually these plans are created independently from each other and so lead to a whole host of issues further down the line such as poor service levels, incorrect inventory, increased waste and failure to meet business objectives.

Through integrating short, medium and long term horizons it is possible to create a well constrained plan for all horizons which all ultimately act as part of the same plan.

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