What is production planning?

What is manufacturing planning? Definition and explanation

Manufacturing planning is the systematic planning and organization of all production-related processes in a manufacturing company. The definition includes the temporal, quantitative and capacity planning of manufacturing orders considering available resources such as machines, personnel and materials.

The explanation can be summarized more simply: Manufacturing planning determines which products are produced when, in what quantity, with which resources and in what sequence. It forms the interface between strategic production planning and operational production control.

What is the goal? An efficient manufacturing planning ensures that customer orders are fulfilled on time, machines are optimally utilized, inventories are minimized and production costs stay under control.

Goals and tasks of manufacturing planning

Manufacturing planning pursues several central goals that partly influence each other:

Main goals

✅ On-time delivery: meet delivery deadlines and ensure customer satisfaction
✅ Capacity utilization: optimally use machines and personnel
✅ Cost efficiency: reduce production costs through optimal resource utilization
✅ Lead-time optimization: shorten production times and increase flexibility
✅ Inventory reduction: minimize material and intermediate storage

Core tasks

Phases of manufacturing planning

The manufacturing planning typically divides into three consecutive phases:

1. Rough planning (strategic level)

In rough planning, long-term production programs are created. This phase includes:

✅ Determination of the production program (which products are produced?)
✅ Capacity estimation over longer periods (several months to years)
✅ Investment decisions for new machines or plants
✅ Personnel requirements planning

2. Detail planning (tactical level)

The detail planning makes the rough planning concrete for shorter periods:

✅ Detailed order planning for weeks and months
✅ Machine utilization planning with concrete time windows
✅ Material requirements planning (MRP) with exact quantities and dates
✅ Capacity balancing and detection of bottlenecks

3. Operational planning (operational level)

The operational planning controls daily production:

✅ Day-to-day production control
✅ Sequencing for individual workstations
✅ Reaction to short-term changes and disruptions
✅ Monitoring of order execution

Methods and procedures of manufacturing planning

Diverse planning methods are used depending on the type of production and requirements:

Push and Pull Principle

Classic planning methods

Throughput scheduling:
Calculation of start and end dates for production orders based on work plans and lead times. Distinction between forward and backward scheduling.

Capacity scheduling:
Consideration of actual capacity availability in scheduling. Identification of capacity bottlenecks and rescheduling of orders.

Lot sizing:
Determination of optimal production quantities considering setup costs, storage costs and delivery dates.

Machine utilization planning:
Allocation of production orders to specific machines and workplaces while optimizing utilization and minimizing setup times.

Modern planning approaches

⚠️ APS (Advanced Planning and Scheduling):
Software-supported, simultaneous planning of all resources with optimization algorithms for complex manufacturing environments.

⚠️ Finite Capacity Planning:
Planning considering real capacity constraints rather than theoretical infinite capacity.

⚠️ Just-in-Time (JIT) / Just-in-Sequence (JIS):
Minimization of inventories through demand-synchronous production and delivery.

Challenges in manufacturing planning

Manufacturing planners face a variety of challenges:

Typical problem areas

❌ Complexity: Many products, variants and manufacturing stages complicate the overview
❌ Dynamics: Urgent orders, machine outages and material bottlenecks require constant replanning
❌ Data quality: Inaccurate master data (work plans, lead times) lead to unrealistic plans
❌ Goal conflicts: High utilization vs. short lead times vs. low inventories
❌ Manual processes: Excel planning reaches its limits as complexity grows
❌ Lack of transparency: Unclear order status and capacity situation

Risk factors

⚠️ Inadequate capacity buffers lead to overload during unexpected events
⚠️ Too long planning horizons reduce flexibility and increase the probability of errors
⚠️ Lack of alignment between sales and production causes unrealistic delivery dates
⚠️ Neglecting setup times in planning leads to schedule delays

Software and digital tools for manufacturing planning

Modern manufacturing planning is hardly possible without digital support. Different software types support the planning process:

PPS systems (Production Planning and Control)

PPS systems form the core of digital manufacturing planning. They include modules for:

✅ Production program planning
✅ Quantity planning and material requirements planning
✅ Scheduling and capacity planning
✅ Order release and availability check
✅ Manufacturing control and feedback

ERP systems with manufacturing module

ERP systems connect manufacturing planning with other areas of the company such as purchasing, sales, warehousing and finance. Benefits:

✅ Continuous data base without media breaks
✅ Automatic information flow between departments
✅ Real-time information on inventories and order status
✅ Comprehensive corporate planning and controlling

MES (Manufacturing Execution System)

MES systems form the bridge between planning and shop floor:

✅ Fine-tuning of production in real time
✅ Machine data collection (MDE) and operations data collection (BDE)
✅ Quality data collection and documentation
✅ Control room functionality for operational planning

APS systems (Advanced Planning and Scheduling)

APS systems offer advanced planning functions:

✅ Simultaneous planning of all resources
✅ Optimization algorithms for complex planning problems
✅ What-if scenarios and simulations
✅ Graphical planning boards for intuitive operation

Abas ERP for manufacturing planning

Abas is an ERP solution for the mid-market with a strong focus on production and manufacturing companies. The software offers comprehensive features for manufacturing planning, tailored to the needs of SMEs.

Manufacturing planning features in Abas

Capacity planning and overview:
Abas enables detailed capacity planning over different time horizons. The graphical capacity utilization shows bottlenecks and free capacities at a glance. Planners can quickly see whether resources are sufficient or additional capacity is needed.

Scheduling with throughput scheduling:
The software automatically calculates start and end dates for production orders based on work plans and embedded lead times. Both forward and backward scheduling are possible to map flexible planning scenarios.

Material requirements planning (MRP):
Abas performs multi-stage material requirements planning that considers all bill of materials levels. The system checks availabilities, suggests orders and accounts for already planned receipts.

Manufacturing order management:
From order creation through release to feedback, Abas accompanies the entire manufacturing order process. Real-time status tracking provides the current processing status at any time.

Flexible manufacturing types:
Whether single, series or variant manufacturing, Abas supports various manufacturing approaches. The software adapts to different production environments, from customized job production to standardized serial production.

Advantages of Abas for manufacturing companies

✅ Industry-specific: Functions optimized for manufacturing processes
✅ Scalable: Grows with the company's requirements
✅ Cloud-capable: Modern cloud ERP architecture for flexible use
✅ Customizable: Configurable to individual processes without extensive programming
✅ End-to-end: All areas of the company work on a single database

The ERP software Abas connects manufacturing planning with purchasing, sales and finance. Changes in one area automatically affect others: customer orders generate manufacturing orders, which in turn trigger purchase proposals. This seamless process chain reduces manual interventions and speeds up planning.

Table of Contents

• What is production planning? Definition and explanation
• Goals and Tasks of Production Planning
• Phases of Production Planning
• Methods and Procedures of Production Planning
• Challenges in Production Planning
• Software and Digital Tools for Production Planning
• Abas ERP for Production Planning
• Best Practices for Successful Production Planning
• FAQ