ERP Functions: Planning 4

With the victory of Anti Corruption movement of Anna Hazare we ended the last week along with IPL Season 4 inauguration. In previous 3 weeks of our ERP journey we understood the various functionalities of Planning department. Lets review them briefly.

Initially Planning Department will have delivery plan from the marketing team. 

The Planning Department will further break the delivery plan into monthly, weekly and daily production plans.

According to the Production plan MRP is arrived. MRP = To be Produced Qty X BOM (Bill of Material)

Along with MRP, Capacity Planning is arrived from the Production Plan to frame the timing schedule for production.

In the last blog we have learnt that the synchronization of all these will be the Executable Production Plan for the company. Now in this Blog we will see how Synchronization is carried out.

Production process is continuous. Stoppages in production process is a huge loss to the company as all the 3Ms will be idle even though company has invested in them. So in order to make production continuous planning department has to plan accordingly. That is why Planning Department is crucial in the operation of whole company.  To have the production continuous, Planning department has to plan the production before to start of the month. Hence Delivery Plan from the Marketing is received well before the start of the month.

Now when the planning department starts the process of Production Planning for the Delivery plan there are certain aspects to be considered.  

1. Production will be running for the previous month plan and there will be products which are in different stage of production.

2. There may be backlog of previous month production plan due to various issues of production.

3. There may be rejection of previous month production.

4. Delivery plan might have been changed during the course of the month because of customer requirement variations.

5. There may be rework of customer rejection, internal rejections due to which other production might have been affected.

So simply Production planning for next month can not be done by Delivery plan alone. Now lets see how the planning department will consolidate all these and then arrives MRP, Capacity and finally the synchronization of all these to arrive Executable Production Plan.

First Step is to arrive the net production to be done. This is arrived from

Production Qty = Delivery Plan Qty + Back Log Production Qty + Rejection to be Re-produced Qty + Rework Qty + Developmental Qty

This Production Qty is the quantity which is to be produced in the next month. Now the primary task is to find out the time required for the production of each of the products in this Production Qty. With this time according to delivery plan the first level of production of products and quantity priority is arrived. We have discussed this in Previous Blog of Capacity Planning. The Capacity Planning gives the Date of each process of the production of each product.

Next step is to arrive the MRP to meet the production requirement according to the above arrive Capacity Planning. For this we need to consider only those production processes of the product which requires materials (Raw Material, Consumption).This planning itself is little lengthy process, so we will understand it in next week. Along with that we shall also look into Planning of other requirements of the production like Machine Tools, Gauges. 

Keep watching this space...