Production planning is the process by which a manufacturer or business decides how many goods to produce. Efficiency is critical to the success of a business; planning helps determine how many of each good or service needs to be produced over a given time period in order to meet demand. There are many different types of production planning which go under many different names in the business world. Some of the main types of production planning include job- or project-based planning, batch planning, and continuous or mass production.
Job- and project-based planning are typically used in smaller enterprises where the production of a good or service is the done by one person, or one team. A jewelry maker that constructs custom engagement rings, for instance, may use job-based production planning. Film production involves a small team of professionals working on a project-based system. Job and project planning are highly customizable to the requirements of the client or customer, but are not suitable for creating a consistent flow of products.
Batch planning involves the production of several identical individual goods from an initial starting set of raw products. A seamstress taking a bolt of cloth and making five identical dresses is a form of batch production. In manufacturing businesses that produce several different products, batch processing can improve efficiency by using machines and labor for one large set of one type of product at a time. For instance, in a cannery, machines might be set to produce a batch of canned walnuts, followed by a batch of canned peas. This would be far more efficient than altering machine processes to produce each can as needed, one at a time.
Flow or continuous production planning is often used to create mass-produced goods. Large factories commonly use continuous production methods in order to create a steady stream of products. In order for this production method to be cost-efficient, there must be constant demand for the product. Additionally, production facilities must be streamlined so that the product passes seamlessly from one stage of preparation to the next, which requires intensive pre-planning of layout and production flow.
Determining the correct method of production planning for a particular business usually depends on market forecasting and mathematical calculations. Some companies use production planning software to help maximize the production capacity of a factory, as well as to measure the cost-effectiveness of different planning strategies. Planning is also closely related to control, which is an ongoing business process that manages quality and efficiency by comparing results to company goals or capabilities. Through control, planning methods are often refined and retooled in order to capitalize on unrealized potential.