Production program of the business plan. Enterprise production plan Production organization plan example

The basis for planning the work of any enterprise is the production plan. This document fixes the volume and procedure for the production of goods or the provision of services with related characteristics: the volume of raw materials used, cost, labor costs. Consider how a production plan should be drawn up, what goals it serves, what must be reflected in this document and its sample.

What is a production plan

A production plan is a document by which the management of an enterprise organizes work and controls labor process, consumption of raw materials and energy, employment of personnel. The production plan is the basis of the company's activities. Without it, it is impossible to effectively control the enterprise, track profits and losses, and find ways for optimization.

Such a document sets a task for each department/structural unit. Production plan compiled by each company independently. Finding a ready-made template is virtually impossible: each organization has its own specifics. At the same time, there are generally accepted approaches and algorithms for compiling this document. Their use greatly simplifies the procedure. It is also important to know that you cannot write planning once and use it all the time. The document requires regular updating.

Work according to the production plan is more promising

What does he give

Any production plan serves several purposes simultaneously:

Determination of the number of units of goods and services needed to make a profit.
Planning a specific amount of profit, the ratio of expenses and income, any other important financial indicators.
Evaluation of the efficiency of the use of resources and raw materials.
Quality control. In the document, you can fix the specific characteristics of the goods and achieve them.
Planning the cost of raw materials.
Search for ways to optimize the process and work options.
Power control.
Monitoring the efficiency of the use of labor resources.
Evaluation of sales effectiveness.
Development of optimal ways to use the budget.
Reporting standardization.

Thus, the list of tasks to be solved by the production plan is very wide. In addition, depending on the wishes of the management, any other indicators and goals for structural units can be included in the document. The document helps to develop a development strategy - a list of specific actions of the enterprise necessary to achieve the goals of the work. The plan helps to allocate resources efficiently.

Varieties of production plans

All production plans can be divided into the following types:

Short-term - 1-2 years. They are divided into quarters and semesters. Establish what goals the company must achieve during the year.
Medium-term - from 2 to 5 years. The main goal is to determine the organizational structure, the number of employees, capital investments And production capacity, the volume of annual income and growth dynamics, the need for investments, loans.
Long-term - from 10 years and above. The goal is to develop an economic strategy, determine the place of the organization in the market, position among competitors.

The long-term plan is specified in the medium-term, the medium-term - in the short-term. All three plans must be consistent with each other. They cannot contradict each other. Planning should provide for the dynamics of development. From the documents it should follow what indicators the enterprise will consistently achieve.

Large organizations make up all 3 types of plans, smaller ones - only medium and short-term. The work of any enterprise, especially manufacturing material values, without a plan is ineffective. A development strategy is needed even in services and trade.

Drawing up a plan is best left to specialists with specialized education.

Features of drawing up a plan

The production plan is not one document, but several at once. The most standard set includes:

A plan for the main activity, fixing the goals of the enterprise, categories of goods and volumes of their production.
Schedule of work - a list of categories of goods indicating their quantity, cost, raw materials needed. Dynamics of production - how much goods to produce and sell in each month, in each year.
Table of the company's needs for funds, investments, loans.

Among the important indicators that the plan of any manufacturing enterprise, should be called:

tariffs for public utilities, the cost of their payment;
wage fund;
consumption of raw materials per unit of goods or services;
technology production process;
contribution margin;
availability of specialists with a certain level of qualification;
amounts borrowed money, percentage size.

Identification of capacity utilization

Determination of capacity utilization - that is, the best methods for using equipment and raw materials for production maximum volume production is one of the most important parts of the production plan. How is it calculated?

They determine the categories most in demand on the market and specific models of goods.
Calculate the amount of resources that must be used to manufacture one unit.
Predict the number of units of goods that can be sold in the maximum short time.
Determine how many units of goods and in what terms the existing equipment can produce.
They analyze how long it takes to produce the required batches of goods on existing equipment.

This is a simplified power calculation algorithm. As a rule, these operations are trusted by professional economists. To correctly calculate modes, you need to know the productivity of the equipment, the speed of the staff and the consumption of raw materials. This process is associated with planning and guessing the market situation. It is almost impossible to establish the exact required volume of production. Success is considered to achieve the indicators closest to reality.

Sample production plan indicating the units of production for each month of work

Reflection of the production process

Any sample production plan of an enterprise must necessarily include a description of the production process: both globally and with respect to each product model. Only accurate fixation of the entire process will help to plan and optimize the work correctly.

It is most convenient to reflect the production process in the form of a diagram, where each action will be displayed in stages.

A clear flowchart showing the equipment, personnel and raw materials involved will help management evaluate the effectiveness of the existing workflow and, if necessary, find ways to improve. Based on the analysis, best practices can be determined.

Operating schedule

The production plan includes a section that describes the work schedule, namely:

number of shifts, duration;
number of days off / no days off;
the number of employees in a shift;
expected productivity of each shift.

Room or area for equipment placement

Such a document describes all available premises with an indication of their purpose. It is necessary to fix the area, ceiling height, condition (whether repairs are required), connected communications, entrances, exits, windows, if necessary, describe the finish. Make a conclusion about the suitability of the premises for production in the medium and long term.

If the analysis of the premises shows that it is unsuitable for increasing productivity, the search for suitable real estate with specification of specific requirements should be included in the medium-term plan. It is important to reflect the advantages and disadvantages of the existing workshop in order to achieve maximum profit.

The enterprise can plan the opening of new workshops, the creation of representative offices in other regions - all this must also be fixed in the medium and long term planning. Mandatory with a description of the requirements for real estate.

The drafters of the plan independently think over its structure

Need for materials and suppliers of raw materials

Planning helps to use resources wisely, but only if it contains information about materials and their suppliers. Information about the quality and cost of raw materials will help evaluate the quality of products and the feasibility of working with a particular supplier. Information about the conditions of work with counterparties will help, if necessary, to quickly predict how a change in the price of any of its goods will affect production.

The most convenient way to describe the need for materials and their suppliers is tables for each product. Specify:

weight/color/size of goods;
its key characteristics;
full composition indicating the volumes of raw materials used;
the possibility of replacing any components;
supplier information;
the price of each component.

fixed costs

An important section, which will present a list of fixed costs similar to most enterprises:

rental of premises;
Communal expenses;
raw materials and starting materials;
taxes and obligatory payments;
logistics and transport;
wage fund.

The document should record the current and planned values of each expense, possibly indicating acceptable limits. This approach will help make the plan more flexible, adapted to changing market conditions. Knowing the allowable limits of each direction of fixed costs will help, if necessary, to more quickly regulate product prices.

Production cost

The manufacturer necessarily considers the full cost price for each of his goods. Without knowledge of this indicator, it is impossible to correctly select the price, which means that it threatens with losses. To calculate the total cost, add up all the values of the spent resources:

source materials;
equipment depreciation;
utilities and other energy costs;
employee's salary;
management staff salary;
insurance premiums;
transport costs;
advertising;
marketing expenses.

Production plan example

A typical example of a 1 year production plan is shown in the image below. It is made according to the most common structure and reflects the most important indicators for the manufacturer. You should not use other people's plans, but you can analyze them and adapt them for your own production.

Production plan option

Common mistakes

The most common mistakes in compiling such a document are incorrect accounting for the consumption of materials, incorrect assessment of the capacity of equipment, and an overestimated expectation of demand. These inaccuracies are detrimental to the content of the document: it is less connected to reality. An incorrect development strategy, built on erroneous calculations, will inevitably lead to bankruptcy.

Therefore, it is extremely important to monitor indicators as accurately as possible and, if necessary, adjust them. The more the company will monitor the content of the production plan, the more likely it is to achieve the optimal ratio of income and expenses.

When planning, it is extremely important to take into account the possibility of sudden circumstances: equipment breakdown, a large private order, or a disruption in the supply of raw materials. The company must have measures in place for each such case. It is wiser to initially set lower indicators, not at the limit of the equipment’s capabilities, but with success, increase them a little.

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Introduction

1.2 Features of planning the activities of enterprise units

2.2 Evaluation of the planning system for the production unit of JSC "Amur Cable Plant"

Conclusion

Bibliography

Introduction

The relevance of the chosen topic is due to the fact that intra-company planning is necessary for the normal functioning and development of the enterprise. Planning determines the main direction of the company's development, taking into account the material sources of its provision and market demand.

The purpose of planning is to correctly take into account all internal and external factors in setting specific goals for the development of the enterprise and ways to achieve them. Planning ensures the interconnection between the individual structural divisions enterprise, allows you to minimize costs and opens up all possible additional sources resources within the firm. Therefore, it is necessary to carry out high-quality intra-company planning, which will ensure further successful development firms and their prosperity.

The purpose of this work is to study the planning activities of a separate division of the enterprise.

The object of the study is OJSC "Amur Cable Plant" - an enterprise in Khabarovsk.

The subject of the study is planning the activities of the production unit of the enterprise.

Operational and production planning ensures the concretization and detailing of the production program, its timely communication to the performers (shops, sections, jobs) and the achievement of coordinated work of all departments of the enterprise.

To achieve this goal, it is necessary to solve the following tasks in the work:

Consider the theoretical foundations of planning the activities of a separate division of the enterprise;

Conduct an analysis of the planning of the activities of the production unit of the enterprise in OJSC "Amur Cable Plant";

To develop directions for improving the planning system of the production unit of JSC "Amur Cable Plant".

The work consists of three chapters, introduction and conclusion. The first chapter discusses the essence of planning at the enterprise, the features of planning the activities of enterprise divisions, the organizational and hierarchical subordination of enterprise plans.

In the second chapter, an assessment of the planning system for the activities of the production unit of JSC "Amur Cable Plant" was carried out.

The third chapter presents the directions for improving the planning system of the production unit of JSC "Amur Cable Plant"

The bibliographic list includes 19 sources, in particular, the works of such authors as Alekseeva M., Bovykin V.I., Buzyrev V.V., Bukhalkov M.I., Vesnin V.R., Wissema Kh., Gerchikova I.N. Gribov V.D., Grishchenko V., Dogil L.F., Semenov B.D. and etc.

1. Theoretical basis planning the activities of a separate division of the enterprise

1.1 The essence of enterprise planning

Planning is one of the initial stages of the management process. This is a choice of goals, directions in development. Any company must carefully and well plan its activities, since the survival and profitability of the company depends on this.

The essence of planning is manifested in the specification of the development goals of the entire company and each unit separately for a specified period, the definition of business objectives, the means to achieve them, the timing and sequence of implementation, the identification of material, labor and financial resources needed to solve the assigned tasks.

Thus, the purpose of planning as a function of management is to take into account in advance, if possible, all internal and external factors that provide favorable conditions for the normal functioning and development of enterprises that are part of the company. It provides for the development of a set of measures that determine the sequence of achieving specific goals, taking into account the possibilities for the most efficient use of resources by each production unit and the entire company. Therefore, planning is designed to provide interconnection between the individual structural divisions of the company, including the entire technological chain: research and development, production and marketing. This activity relies on identifying and predicting consumer demand, analysis and evaluation of available resources and prospects for the development of economic conditions. Hence the need to link planning with marketing and control in order to constantly adjust production and sales figures following changes in market demand. The higher the degree of monopolization of the market, the more accurately companies can determine its size and influence its development.

The planning process itself takes place in 4 stages:

development of common goals;

definition of specific, detailed goals for a given, relatively short period of time

definition of tasks and means of their solution;

control over the achievement of goals by comparing planned indicators with actual ones.

Planning is always guided by the data of the past, but seeks to determine and control the development of the enterprise in the future. Therefore, the reliability of planning depends on the accuracy of the actual indicators of the past.

The object of planning at the enterprise are all functional processes, including the development of production and the improvement of management.

The essence of a systematic approach to planning: all areas of an enterprise, such as planning for standardization, quality, strategies, consist of functional blocks; there are separate stages of the production process (planning the technical preparation of production, main, auxiliary and service production); individual factors of production (personnel planning, sales).

An approximate list of functional blocks of enterprises includes: general management; linear and operational management of production; management of economic activity; management of material resources; personnel management and social development; program-target management.

Planning principles: all production processes are carried out in specific departments; management processes at the enterprise are performed at workplaces, services, departments, etc.

Strategic planning is systematic approach to entrepreneurial behavior, and the modern interpretation of it presents incremental behavior as conservative, and entrepreneurial as aggressive, growth-oriented.

At the same time, the incremental style of behavior is more organic and natural for large organizations. For example, if a large multi-industry organization with incremental behavior has been successful for a number of years, then with a high degree of probability it can be assumed that in the future its management will prefer the same style of organizational behavior. Leaders can make changes only if the organization encounters insurmountable problems in environment, and these problems will force them to look for new opportunities to maintain the efficiency of the firm.

1.2 Features of planning the activities of enterprise divisions

Ensuring uniform, rhythmic work of the company's divisions is the goal operational planning -

Operational planning - planning of individual operations in the general economic flow in the short and medium periods. Operational planning is carried out only at enterprises and is an organic component and the final stage of intra-production planning for a month, ten days), day, hour, etc.

Operational planning is a continuation of current and short-term production planning, forming production programs and tasks for departments up to a specific workplace. The main types of operational plans are the operational calendar plan, the shift-daily task and the schedule for the movement of the product within the framework of the technical process.

The operational calendar plan contains the sequence and timing of the launch-release of products and their batches by day of the week, the loading of production lines and equipment, and is the main document for the development of shift-daily tasks. In the shift-daily task, the specific range and number of products necessary for the normal functioning of the production process of both this workshop and those adjacent to it are indicated. Shift-daily tasks can be supplemented by a schedule for the movement of products, individual parts of products.

Operational planning consists of scheduling and scheduling (operational regulation).

Operational planning scope includes:

Development of progressive calendar and planning standards for the movement of production;

Drawing up operational plans and schedules for workshops, sections, teams and workplaces and bringing them to the direct executors;

Operational accounting and control of the production process, prevention and detection of deviations from envisaged plans and schedules and ensuring the stabilization of the production progress.

Scheduling includes distribution annual plans th tasks by production units and deadlines, as well as bringing the established indicators to specific performers of work. With its help, shift-daily tasks are developed, and the sequence of work performed by individual performers is agreed upon. The initial data for the development of calendar plans are the annual volumes of output, the complexity of the work performed, the timing of the delivery of goods to the market and other indicators of the socio-economic plans of the enterprise.

When implementing the developed calendar plan an operational record of the progress of its implementation is maintained - information is collected on the actual implementation of the plan, it is processed and transferred to the relevant services of the enterprise. Based on the information received, dispatching is carried out, which consists in identifying and eliminating emerging deviations from the planned course of production, in taking measures to ensure the complete course of production, the best use of working time and material resources, high utilization of equipment and jobs.

Operational planning of production at the place of its implementation is divided into intershop and intrashop. Inter-shop planning ensures the development, regulation and control of the implementation of plans for the production and sale of products by all departments of the enterprise, and also coordinates the work of the main, design and technological, planning and economic and other functional services. The content of intra-shop planning is the development of operational plans and the preparation of current work schedules for production sites, production lines and individual jobs based on annual plans for the production and sale of products of the main workshops of the enterprise.

IN modern production various operational planning systems are widespread, determined both by internal factors and by external market conditions. Under the system of operational planning of production in the economic literature, it is customary to understand a set of various methods of technologies for planned work, characterized by the degree of centralization, the object of regulation, the composition of calendar and planned indicators, the procedure for accounting and movement of products and registration accounting documentation. A prerequisite effective functioning of the operational planning system for production is the existence of a reasonable regulatory framework, which includes, in particular: calendar and planning standards, material consumption standards, production capacity utilization standards, production material security standards. The choice of one or another operational planning system in market conditions is determined mainly by the volume of demand for products and services, the costs and results of planning, the scale and type of production.

1.3 Organizational and hierarchical subordination of enterprise plans

Organizational and hierarchical subordination of enterprise plans

The target orientation of the system of plans is carried out with the help of organizational and hierarchical subordination and naturally conditioned cooperation of planning objects (Table 1).

Table 1 - Correlation of planning indicators

Key indicators by type of planning
strategic	long-term		operational-calendar
Product name	List of the most important product range	List and quantity of the entire nomenclature	Detailed list and quantity of the entire nomenclature
Approximate cost to be specified, in rubles	The amount of resource expenditure by type	The amount of resource expenditure by type and range of products	Detailed and operational norms for spending resources by type
Approximate deadlines	Calendar deadlines	Accurately set deadlines	Hourly and daily execution schedules
Responsible executors, without specifying co-executors	Responsible executors and co-executors by types of work	Detailed list of performers by stages, types and range of products	Detailed distribution of work among performers
Goal achievement efficiency, cost recovery	Excess of income over expenses	The amount of net income	Timeliness and completeness of the implementation of the plan for the product range

The basis of the system of plans is a long-term target program, containing the main performance indicators of structural units and the enterprise as a whole (Table 2).

Table 2 - Target orientation of the enterprise by priority type of activity

Kind of activity	Target orientation of the enterprise, focused on a certain type of strategy	Preferences to the formed organizational structure management
Production	Cost minimization Renewal of the product range Technology update Flexible use of production space and equipment Flexible change in the composition of labor resources	Degree of formalization (degree of rigidity of fixed functions) The predominance of vertical connections and administrative and organizational influences Adaptability to changing influences (maneuverability)
Marketing	Sales activity Adequate and timely response to supply and demand Adequate and timely response to price changes Forecasting trends in competition Forecasting demand trends Market expansion Marketing concept development	Degree of centralization -- decentralization of decision-making
Innovation	Identification of the scientific and technical profile of the enterprise Updating the range of products Predicting Technology Trends Product design for profit Quick response to changes in the external environment Creation of technologies Adaptation new technology to the conditions of the enterprise Forecasting the transition to new products (technology) Coordination of the timing of the creation of new products and technologies Analytical, scientific approach to innovation	Research Leadership high potential research unit
Investments	Ensuring income (profit) from invested funds Ensuring the diversification of investments (several objects with different project implementation periods) Ensuring the solvency of the enterprise	Growth in the ratio of income to the amount of share capital
Planning	Ensuring the profitability of production Ensuring productivity in the enterprise Order book balance Profit optimization Ensuring a given rate of growth in sales or profits	Strengthening the prestige of the brand Vulnerability reduction Correspondence of growth with potential parameters Operational stability

Distant long-term goals are twice planned - in long-term and in operationally managed plans. At first, distant goals are included in the plan as a subject of their development, i.e. the operational and current plans define the tasks for developers, the dates for the start of work by stages and the dates for their completion. Further, the necessary funds are allocated from the available resources to ensure the work begun, which are also subject to current planning.

The wider the planning interval, the higher the degree of uncertainty of the plan parameters, therefore, the number of indicators and the degree of their accuracy are sharply narrowed.

Framework strategic plan are almost always flexible, as well as the timing of the final result and the amount of expenses. As a rule, only the main responsible executor is established, since at the first stage neither the content of the work nor their volumes are clear.

In general, long-term, current and operational scheduling are interconnected and represent a planning system that combines the entire enterprise management mechanism into a complex (Table 3).

Table 3 - Organizational-hierarchical scheme of subordination and planning cooperation

Periodicity of the plan	Order form	Structure of planning indicators	Responsible executors of the plan
operational calendar	Consumer orders	Detailed natural norms and standards	Shops, sections, brigades
	Mostly consumer orders	Natural - by type of product, cost - in detail, norms and standards, labor - in detail	Workshops, functional departments, laboratories
medium term	Consumer orders, forecasts	Enlarged, cost, natural, labor, norms and standards
long term	Mostly forecasts, partly orders	Enlarged product range, funding volumes, income	Functional departments, laboratories, some workshops
Strategic	Forecasts	Key products, funding volumes, efficiency	Departments: marketing, technical, financial, capital construction

Over time, the goal is divided into separate specific tasks: manufacturing and fine-tuning prototypes of new products, purchasing necessary materials, tools, training of skilled workers to work on new equipment, etc.

After mastering the production of new products, all activities related to their development and preparation for production are excluded from the long-term plan. New products are re-included in the system of an operational-calendar object not of a promising, but current production, and for the long term a new goal is outlined and the whole process is repeated.

Coordination and mutual adjustment in case of discrepancy between the plans of various services of the enterprise are promptly carried out throughout the entire period of development and implementation of the long-term plan. Full combination of plans, as well as methods of accounting and control used by the administration and accounting, is achieved, as a rule, only at the final stage.

Moving from a long-term plan, which is developed at the level of functional departments and administrations, to plans for internal divisions of the enterprise, they solve detailed tasks:

Definition of tasks for the planning period and planning indicators for each unit, which, as a rule, performs only a part of general plan enterprises;

Identification and elimination of the causes of discrepancy between internal plans between workshops;

Disaggregation of generalized indicators of long-term and medium-term plans of the enterprise when they are described in current and operational-calendar workshop plans;

Distribution of material, labor and financial resources between shops, services and types of work and their redistribution when imbalances are detected.

The main task of managers and specialists is to skillfully and correctly combine the requirements associated with the fulfillment of promising targets with the current daily tasks of the enterprise. This is the guarantee of long-term successful work enterprises.

The classification of plans into long-term, current and operational-calendar is, to a certain extent, conditional. Their difference lies in the timing of obtaining the final result, and the planning object, as a rule, does not change. One and the same product by elements can be included in all types of plans. For example, preparation for the production and sale of a new product is included in the long-term plan; product design, purchase of equipment and materials for its production - in current plans; distribution of personnel to facilities associated with the production of a new product, and payment of current costs are included in operational plans.

2. Analysis of planning the activities of the production unit of the enterprise on the example of JSC "Amur Cable Plant"

2.1 a brief description of enterprises of JSC "Amur Cable Plant"

Open Joint Stock Company "Amur Cable Plant" registered on August 12, 1992 by Decree N 526/7 of the Head of the Leninsky District Administration of Khabarovsk (registration number 1241.368.401.1197).

OJSC "Amur Cable Plant" specializes in the development, production, service, maintenance of automation equipment and control of technological processes in process control systems, industrial control devices, incl. of heat flow meters, and is characterized as a mechanical assembly type enterprise with a multi-product small-scale-batch production that produces electric actuators and instrumentation. Manufactured products are mainly classified as particularly complex with a duration production cycle within one month. The range of component parts is about 5 thousand items, materials - 8 thousand items, parts and assemblies of own production - about 30 thousand items.

The organizational structure of the Company includes functional blocks:

Production, including main and auxiliary production workshops, technical services, capital construction department (OCS), management automated systems and management processes (UASPU). The leadership of the block is the responsibility of the vice president;

Marketing - includes the marketing department and the shipping department. Based on market research and marketing analysis forms a promising assortment policy: develops trade and commercial activities. Assistant manages unit CEO- Head of the Marketing Department;

Financial, including financial and economic services, conducting operational accounting and reporting of the Company;

Engineering Center (EC) - carries out activities in the field of research: development and marketing work for the creation of competitive (including new) products in accordance with the technical policy of the Company, the EC is headed by the director of the center, is an independent self-supporting unit with a bank account.

Subdivisions with the status of the Central Federal District independently carry out production and economic activities, the distribution of self-supporting income, the hiring and dismissal of personnel (except for the head).

Electroplating and paint coating shop No. 4 - specializes in electroplating (zinc plating, nickel plating, oxidation, etc.) and painting parts.

Foundry No. 7 - specializes in injection molding from silumin and plastics.

The structure of the plant currently provides for the presence of auxiliary shops and maintenance services.

Tool Shop No. 20 - specializes in the manufacture of dies, casting molds, fixtures, auxiliary and cutting tools.

The Electromechanical Department (EMO) performs overhaul, medium repairs of the mechanical, energy part of the enterprise equipment, maintenance of energy facilities.

Maintenance services - include warehousing, BC warehouses, transport shop.

The form of relations between the production structure (assembly, procurement and auxiliary shops) is based on the rental form, i.e. full independence in the organization of labor, remuneration, recruitment and financial responsibility.

The enterprise has adopted a complete-node system of operational production planning. The units corresponding to subclasses 2, 3, 4 according to the unified classifier of products are accepted as a planning and accounting unit.

2.2 Analysis of the planning system for the production unit of the enterprise

In accordance with the purpose of operational and production planning, the enterprise has allocated following features: operational planning; operational accounting and control of the production process; analysis and operational regulation of the production process.

Operational and production planning at the enterprise is carried out in three successive stages:

1. Formation of the annual program of the enterprise to determine the cost of pre-production.

2. Further detailing the annual program of the enterprise in terms of timing and setting production targets for workshops.

3. The distribution of the planned work by departments for a month and for separate decades with the final specification of plan targets. The tasks of operational production planning: the formation of production plans for the final shops, monitoring the progress of the plans, calculating the production program for the shops in terms of volume, summing up the results of the implementation of the nomenclature plan, the rhythm of the release of products; calculations of work in progress; formation of operational planning and accounting for procurement workshops, calculations of percentages of the implementation of the nomenclature plan, accounting for the consumption of materials for the plan, fact, determination of the level of completeness; planning and accounting for the implementation of volumes of services to the side; calculation of intrafactory prices for main production shops, mutual settlements between shops.

A characteristic feature of the tasks of operational production planning is their close linkage with operational accounting data and their use for economic analysis. One of the most important requirements for the organization of operational accounting is the need for a clear linkage of accounting indicators with planned ones and ensuring timely reflection and accurate recording of deviations in the production process.

The enterprise uses a complete-group system of operational production planning.

Operational and production planning at the enterprise is carried out at two levels: at the intershop level - the production and dispatching department; at the intrashop level - the planning and distribution bureaus of the shops.

As a calendar time of planning, it is accepted: at the intershop level - year, quarter, month; at the intrashop level - a month, a five-day week, a shift.

Intershop breaks are due to the fact that the deadlines for the completion of the production of component parts of parts of assembly units in different shops are different and the parts lie in anticipation of completeness. This layover (picking breaks) occurs. when finished blanks, parts or assemblies must “lay out” due to the incompleteness of other blanks, parts, assemblies included together with the first in one set. Such breaks occur when products move from one stage of production to another or from one workshop to another.

A conditional set is adopted as a planning and accounting unit in planning.

The system involves grouping, completing all parts (regardless of their belonging to a particular product) that have structural and technological similarity, according to the same lead size, the same frequency of launch-release and supply for assembly.

3. Improving the planning system of the production unit of JSC "Amur Cable Plant"

The use of a complete-group system of operational production planning at the analyzed enterprise is not justified. Most often, the complete-group system is used at enterprises and workshops that produce multi-part products in medium series.

At the analyzed enterprise, uneven output of products is observed. This can be illustrated by the production program of the enterprise (Table 4).

Under the current conditions, it is more expedient to use a complete-assembly system of operational production planning, since a complete-assembly system is effective when products have a long manufacturing cycle and are produced in small batches. The unit of measure in this system is the node, that is, the assembly unit.

The timing of the manufacture of parts included in the assembly unit is chosen so that the end of their manufacture coincides with the start date of the assembly.

Table 4 - Manufacturing program enterprises

Name of product

Sales statistics

Number of executions

Deviation from forecast for 2006

Production volume (forecast for 2007)

1. Single turn

executive

mechanisms

modernization

Modernization

modernization

Executive mechanisms for Pipe Fittings(Single Turn Flanged Electric Gears)

3. Position Signaling Mechanisms

(modernization)

4. Starters Non-contact Reversing

Including:

(upgrading) SMD technology

5. Manual control unit

including:

6.Manual adjuster

including:

7. Display device

8. Control devices

including:

9. Three-position thyristor amplifiers

including:

10. Setpoint block

12. Alarm block

13. Damping block

14. Block of nonlinear transformations

15. Block selection

16. Computing block

17. Regulating microprocessor controllers

18. Local microprocessor controller

19. Ultrasonic water flow meter

20. Ultrasonic heat meter-water flowmeter

UFEC-001, UFEC-Volga, UFEC-TBM

21. Measuring transducers

including:

IP-T10(T10I)

IS-S10(IS01)

power unit

22. Normalizing converters

including:

(upgrading) SMD technology

Erase block

Gateway block

23. Automatic process control system for accounting of heat carriers

24. Universal household woodworking machines

25. Third-party orders for the production of parts and assemblies (thousand and / hour)

The choice of a complete-node system of operational production planning is due to the following factors: lack of stability in the production of products; nomenclature of parts and assembly units in the product; uneven release of a different range of products; specialization of shops and sections; unification of parts and assembly units in products; choice of planning and accounting unit of planning; production rate; the composition of calendar and planning standards, taking into account the following positive characteristics in the conditions of multi-product small-scale production: visibility, clarity and validity of planned targets; the possibility of a clear link between nomenclature and volume indicators; the possibility of decentralization of intra-shop operational and production planning while maintaining effective implementation of the plan by shops in terms of nomenclature and volumetric indicators; the relationship between production plans and plans for the logistics of shops; close connection and continuity between the intershop and intrashop planning levels; sufficient independence and initiative ...

The structure of the production section of the business plan

In fact, the purpose of this chapter is to familiarize the investor with the production process, the list of necessary equipment and the number of personnel. In other words, the production plan should show that you are able to organize the production of the required volume of high quality goods, as well as establish the sales process and prepare the necessary areas within the planned time frame.

If we are talking about an enterprise that is focused on the production of a particular product, the first thing you need to clarify is whether you are the owner of an existing production, or are just planning to open it.

Often the key guideline for writing this section is the sales plan. Therefore, you need to describe in detail exactly how you plan to produce products and consider in detail all the stages of creating your product or service. At the same time, each position described should include approximate terms, as well as the costs that will be required for its organization.

1. Description of the production process

If you are planning to open a production, you definitely need to describe all the stages and features technological process starting from purchase Supplies And necessary raw materials, and ending with the sale of the finished product (even if you are planning to open a store, then a shortened version of the process from the delivery of the goods to its placement in the store and sale is simply necessary).

Consider how you can modify this process. Describe your considerations and any costs and expenses involved in this activity. Special attention should be given to the structure and composition of production capacities. If you are planning to open a factory or, for example, a plant, this information should be stated in special application attached to the plan.

2. Description of raw materials and their suppliers

Supply issues should be a separate item. Describe what raw materials and materials are required for production, how exactly you plan to transport and store them. Moreover, you should also indicate exactly how you are going to carry out quality control and monitor the timeliness of deliveries, whether there are alternative suppliers of raw materials in case of problems with the existing ones.

3. Industrial premises and land

Next, you need to describe whether you own land, suitable buildings, raw materials, or equipment. Where will the production be located, where is the warehouse of raw materials, where is the warehouse finished products. If not, please describe what kind of premises, equipment, etc. you plan to purchase or rent, what terms will be required for paperwork and installation of equipment, and how much it will cost the company (information on the acquisition and premises, equipment, land plots will need to be specified in the investment section of the business plan).

4. Energy supply

Again, if your project involves the opening of a serious production, you also need to describe the main issues of energy supply, namely the capacity of energy sources, their cost, availability on the market, the possibility of temporary replacement of existing sources in case of accidents and malfunctions.

5. Production cost estimates and cost

In this section, it will be necessary to show what costs of raw materials, materials or energy resources will be spent on the production of one unit of the project's output. After that, its cost should be calculated and the marginal profit of the product planned for production should be shown.

6. Fixed costs of production

Remember, if you are planning to open a store, salon or other enterprise that does not involve the production of products, but only the sale of certain goods or services, this section of the production plan will be less detailed and highly specialized, but this does not mean that it can be completely ignored. In this case, you need to describe the areas of your establishment, outlet etc., dividing them into special zones, indicating all the amounts necessary for equipping the premises, purchasing raw materials and launching the sales process, as well as maintaining and developing the enterprise.

Sample production plan for a business plan for opening a clothing store

The clothing store is located in the Sovietsky district of Yekaterinburg with a population of 250 thousand people. (the most populous area of the city). In close proximity to the store there is a residential complex on a street with high traffic. Also not far from the outlet there are bus stops (70 meters), office buildings and banks (190 and 230 meters), shopping centers, restaurants, cafes and grocery stores(from 80 meters).

The store is located on a leased area of 185 sq. The room is divided into the following zones: entrance area (30 sq. m), trading floor (100 sq. m), fitting room area (30 sq. m), cash registers (15 sq. m), bathroom (12 sq. m). The cost of rent is 100 thousand rubles per month. The term of the lease agreement is 5 years.

The cost of opening a clothing store, including the cost of developing a design project, repairs and redevelopment (400 thousand rubles), purchase of equipment (400 thousand rubles), promotions and the opening event (100 thousand rubles) and other expenses will amount to 1,500,000 rubles.

Among the permanent running costs includes the cost of purchasing lots of seasonal clothing. Also, fixed costs include rent (100 thousand rubles), advertising costs (about 40 thousand rubles), utility bills, garbage disposal, payment for electricity (about 15 thousand rubles). Demand will be influenced by the growth of store awareness among the population. During the year, it is planned to increase the attendance of the store up to 80-85%.

INTRODUCTION

This chapter introduces the reader to the production planning and control system. First, we will talk about the system as a whole, then we will talk in more detail about some aspects of production planning. Next chapters dedicated to master production scheduling, resource planning, performance management, production control, purchasing and forecasting.

Production is a complex task. Some firms produce a limited number of products, others offer a wide range. But each enterprise uses different processes, mechanisms, equipment, labor skills and materials. To make a profit, a company must organize all these factors in such a way as to produce the right goods of the highest quality at the right time with minimal cost. This is a complex problem and it will require efficient system planning and control.

A good planning system should answer four questions:

1. What are we going to produce?

2. What do we need for this?

3. What do we have?

4. What else do we need?

These are questions of priority and performance.

A priority is what items are needed, how many are needed, and when they are needed. Priorities are set by the market. It is the responsibility of the production department to develop plans to meet market demand as far as possible.

Performance is the ability of production to produce goods and services. Ultimately, it depends on the resources of the company - equipment, work force and financial resources, as well as the ability to obtain materials from suppliers in a timely manner. In a short period of time, productivity (production capacity) is the amount of work that can be completed with the help of labor and equipment in a certain period of time.

There should be a relationship between priority and performance, shown graphically in Figure 2. 1.

Figure 2.1 Relationship between priority and performance.

Over the short and long term, the production department must develop plans to balance market demand with available production resources, inventory, and productivity. When making long-term decisions, such as building new plants or purchasing new equipment, plans need to be made several years in advance. When planning production for the next few weeks, the considered period of time is measured in days or weeks. This planning hierarchy, from long-term to short-term, will be discussed in the next section.

PRODUCTION PLANNING AND CONTROL SYSTEM

The production planning and control (MPC) system consists of five main levels:

Strategic business plan;
Production plan (sales and operations plan);
Master production schedule;
Resource requirement plan;
Procurement and control over production activities.

Each level has its own task, duration and level of detail. As one moves from strategic planning to control of production activities, the task changes from defining a general direction to specific detailed planning, the duration decreases from years to days, and the level of detail increases from general categories to individual conveyors and pieces of equipment.

Since each level has its own duration and tasks, the following aspects also differ:

Purpose of the plan;
Planning horizon - the period of time from the current moment to a particular day in the future, for which the plan is designed;
Level of detail - detailing of the products necessary for the implementation of the plan;
The planning cycle is the frequency with which the plan is revised.

At each level, three questions must be answered:

1. What are the priorities – what needs to be produced, how much and when?

2. What production facilities do we have at our disposal – what resources do we have??

3. How can mismatches between priorities and performance be resolved?

Figure 2.2 illustrates the planning hierarchy. The first four levels are planning levels. . The result of the plans is to initiate the purchase or manufacture of what is needed.

The last level is the implementation of plans through control production activities and purchases.

Figure 2.2 Production planning and control system.

In the following sections, we'll look at the goal, horizon, level of detail, and cycle at each level of planning.

Strategic business plan

A strategic business plan is a statement of the main goals and objectives that the company expects to achieve in a period of two to ten years or longer. This is a statement of the overall direction of the firm that describes the type of business the firm wants to do in the future—product lines, markets, and so on. The plan gives general idea about how the company intends to achieve these goals. It is based on long-term forecasts and the marketing, financial, production and technical departments are involved in its development. In turn, this plan sets the direction and coordinates the marketing, production, financial and technical plans.

Marketing specialists analyze the market and make decisions regarding the company's actions in the current situation: determine the markets in which work will be carried out, the products that will be supplied, the required level of customer service, pricing policy, promotion strategy, etc.

The finance department decides from what sources to receive and how to use the company's available funds, cash flow, profits, return on investment, as well as budgetary funds.

Production must meet market demand. To do this, it uses units, mechanisms, equipment, labor and materials as efficiently as possible.

The technical department is responsible for the research, development and design of new products and the improvement of existing ones.

Technicians work closely with the marketing and manufacturing departments to design products that will sell well in the market and that can be manufactured at the lowest possible cost.

The development of a strategic business plan is the responsibility of the management of the enterprise. Based on the information received from the marketing, finance and production departments, the strategic business plan determines the general scheme, in accordance with which the goals and objectives of further planning in the marketing, financial, technical and production departments are set. Each department develops its own plan for fulfilling the tasks set by the strategic business plan. These plans are aligned with each other, as well as with the strategic business plan. This relationship is illustrated in Fig. 2. 3.

The level of detail of the strategic business plan is low. This plan covers General requirements market and production—for example, the market as a whole for major product groups—rather than the sale of individual products. Often it contains indicators in dollars, not in units.

Strategic business plans are usually reviewed semi-annually or annually.

Production plan

Based on the tasks set in the strategic business plan, the management of the production department makes decisions on the following issues:

The number of products in each group that is required to be produced in each period of time;
Desirable level of inventories;
Equipment, labor resources and materials needed in each period of time;
Availability necessary resources.

The level of detail is low. For example, if a company produces various models of children's two-wheelers, tricycles and scooters, and each model has many options, then the production plan will reflect the main groups, or families, of products: two-wheeled bicycles, tricycles, scooters.

Specialists must develop a production plan that would satisfy market demand, while not going beyond the resources available to the company.

Figure 2.3 Business plan.

This will require determining what resources are needed to meet market demand, comparing them with available resources, and developing a plan that aligns one with the other.

This process of determining the required resources and comparing them with the available resources is carried out at each level of planning and is a task of performance management. Effective planning requires a balance between priorities and performance.

Along with the marketing and financial plan, the production plan affects the implementation of the strategic business plan.

The planning horizon is usually six to 18 months, and the plan is reviewed monthly or quarterly.

Master production schedule

The master production schedule (MPS) is the schedule for the production of individual end products. It provides a breakdown of the production plan, reflecting the number of final products of each type that is required to be produced in each period of time. For example, this plan might state that 200 model A23 scooters need to be produced every week. The production plan, forecasts for individual end products, purchase orders, inventory information, and existing productivity information are used as input to MPS development.

The level of detail of the MPS is higher than that of the production plan. While the production plan is based on product families (tricycles), the master production schedule is developed for individual end products (for example, each model of tricycles). The planning horizon can be from three to 18 months, but above all it depends on the duration of the procurement processes or the production itself. We'll talk about this in Chapter 3, in the section on master production scheduling. The term master scheduling refers to the process of developing a master production schedule.

The term master production schedule refers to the end result of this process. Plans are usually reviewed and changed weekly or monthly.

Resource requirement plan

A resource requirement plan (MRP)* is a plan for the production and purchase of components that are used in the manufacture of the items specified in the master production schedule.

It indicates the required quantities and terms of the proposed production or use in production. Purchasing and production control departments use MRP to make decisions about initiating purchases or manufacturing a particular product range.

The level of detail is high. The resource requirement plan indicates when raw materials, materials, and components will be needed to produce each end product.

The planning horizon must be at least the total duration of the procurement and production processes. As with the master production schedule, it ranges from three to 18 months.

Purchasing and control over production activities

Figure 2.4 Relationship between level of detail and planning horizon.

Purchasing and Production Control (PAC) is the implementation and control phase of a production planning and control system. The procurement process is responsible for organizing and controlling the flow of raw materials, materials and components to the enterprise. Control over production activities is the planning of the sequence of technological operations in the enterprise and control over it.

The planning horizon is very short, from about a day to a month. The level of detail is high as we are talking about specific assembly lines, equipment and orders. Plans are reviewed and changed daily.

On fig. 2. 4 shows the relationship between different planning tools, planning horizons and levels of detail.

In subsequent chapters, we will take a closer look at the levels discussed in the previous sections. This chapter is about production planning. Next, we'll talk about master scheduling, resource planning, and production control.

performance management

At each level of the production planning and control system, it is necessary to check the compliance of the priority plan with the available resources and the productivity of production facilities. Chapter 5 describes performance management in more detail. For now, it is enough to understand that the basic process of managing the production and resources of an enterprise includes calculating the productivity required for production in accordance with the priority plan, and finding methods to achieve this productivity. Without this, there can be no efficient, workable production plan. If the desired performance cannot be achieved at the right time, the plan needs to be changed.

Determining the desired performance, comparing it with the available performance and making adjustments (or changing plans) should be carried out at all levels of the production planning and control system.

Once every few years, mechanisms, equipment and units can be put into operation or stop working. However, during the periods considered at the stages from production planning to control over production activities, changes of this kind cannot be made. During these time intervals, you can change the number of shifts, the order of overtime work, the transfer of subcontracting to work, and so on.

SALES AND OPERATIONS PLANNING (SOP)

The strategic business plan brings together the plans of all departments of the organization and is updated, as a rule, annually. However, these plans should be adjusted from time to time to reflect recent forecasts and recent changes market and economic situation. Sales and operations planning (SOP) is a process designed to continuously review the strategic business plan and coordinate plans various divisions. The SOP is a cross-functional business plan covering sales and marketing, product development, operations, and enterprise management. Operations represent supply and marketing represents demand. . The SOP is the forum where the production plan is developed.

The strategic business plan is updated annually, and sales and operations planning is a dynamic process in which the company's plans are adjusted regularly, usually at least once a month. The process begins in the sales and marketing departments, who compare actual demand with sales targets, assess market potential, and forecast future demand. Then the adjusted marketing plan is transferred to the production, technical and financial department who amend their plans in accordance with the revised marketing plan. If these departments decide they can't deliver on the new marketing plan, it needs to be changed.

Thus, throughout the year, the strategic business plan is constantly reviewed and the coordination of actions of various departments is ensured. On fig. 2.5 shows the relationship between the strategic business plan and the sales and operations plan.

Sales and Operations Planning is designed to average duration and includes a marketing, production, technical and financial plan. Sales and operations planning has a number of advantages:

It serves as a means of adjusting the strategic business plan to reflect changing conditions.
It serves as a change management tool. Instead of reacting to changes in the market or the economy after they happen, executives use SOPs to review the economic situation at least once a month and are in a better position to plan for change.
Planning ensures that the plans of the various departments are realistic, consistent, and consistent with the business plan.
It allows you to develop a realistic plan to achieve the goals of the company.
It allows you to more effectively manage production, inventories and financing.

MANUFACTURING RESOURCE PLANNING (MRP II)

Due to the large amount of data and many calculations required, the production planning and control system will probably need to be computerized. If you do not use a computer, you will have to spend too much time and effort on manual calculations, and the efficiency of the company will be compromised. Instead of scheduling needs at every stage of the planning system, a company may be forced to extend deadlines and build inventories to compensate for not being able to quickly plan what is needed and when.

Figure 2.5 Sales and operations planning.

It is intended to be a fully integrated planning and control system, operating from the top down with input from the bottom up. feedback. Strategic business planning integrates the plans and actions of the marketing, finance, and operations departments to develop plans designed to achieve the company's overall goals.

In turn, master production scheduling, resource requirements planning, production control and purchasing are aimed at achieving the goals of the production plan and the strategic business plan and, ultimately, the company. If, due to performance issues, it becomes necessary to adjust the priority plan at any planning level, the changes made should be reflected at the above levels. Thus, feedback must be provided everywhere in the system.

The strategic business plan combines the plans of the marketing, financial and production divisions. The marketing department must recognize its plans as realistic and feasible.

The finance department must agree that the plans are financially attractive, and production must demonstrate the ability to meet the corresponding demand. As we have already said, the production planning and control system determines the general strategy for all departments of the company. This fully integrated planning and control system is called production resource planning system, or MRP II . The concept of “MRP II” is used to denote the difference between the “production resource plan” ((MRP II) and the “resource requirement plan”((MRP). MRP II ensures the coordination of marketing and production.

The marketing, finance, and production departments agree on a common, workable plan expressed in the production plan. The marketing and production departments must interact weekly and daily to adjust the plan to reflect ongoing changes. It may be necessary to change the size of the order, cancel the order, or approve a suitable delivery date. Changes of this kind are carried out within the framework of the general calendar plan of production. Marketing and production managers can change master production schedules to reflect changes in forecasted demand. The management of the enterprise can change the production plan in accordance with general changes in demand or the situation with resources. However, all employees work within the framework of the MRP II system. It serves as a mechanism for coordinating the work of the marketing, financial, production and other departments of the company. MRP II is a method for efficient planning of all resources of a manufacturing enterprise.

The MRP II system is shown schematically in fig. 2. 6. Pay attention to existing feedback loops.

Figure 2.6 Manufacturing Resource Planning (MRP II).

ENTERPRISE RESOURCE PLANNING (ERP)

The ERP system is similar to the MRP II system, but it is not limited to manufacturing. The entire enterprise as a whole is taken into account. The ninth edition of the APICS Dictionary by the American Association for Manufacturing and Inventory Control (APICS) defines ERP as a reporting information system for identifying and planning an enterprise—the global resources needed to produce, transport, and report on customer orders. For full operation, there must be applications for planning, scheduling, costing, and so on at all levels of the organization, in work centers, departments, divisions, and all of them together.

It is important to note that ERP covers the entire company, while MRP II refers to production.

DEVELOPMENT OF THE PRODUCTION PLAN

We briefly reviewed the purpose, planning horizon, and level of detail of the production plan. In this section, we will talk more about the development of production plans.

Based on the marketing plan and available resources, the production plan establishes limits or levels of production activity at some point in the future. It integrates enterprise capability and performance with marketing and financial plans to achieve the company's overall business goals.

The production plan establishes the general levels of production and inventories for the period corresponding to the planning horizon. The primary goal is to determine the production standards that will allow you to meet the goals set in strategic business plan tasks. These include inventory levels, backlog (customer backorders), market demand, customer service, low cost equipment maintenance, labor relations, and so on. The plan should cover a period long enough to provide for the manpower, equipment, facilities and materials required to carry it out. Usually this period is from 6 to 18 months and is broken down by months, and sometimes by weeks.

The planning process at this level does not take into account details such as individual products, colors, styles or options. Since the time horizon is long and demand cannot be predicted with certainty over such a period, such detailing would be inaccurate and useless, and the development of a plan would be too costly. Planning only requires a common unit of product or several groups of products.

Definition of product groups

Firms that produce a single product or a range of similar products can measure output directly as the number of units they produce. For example, a brewery might use kegs of beer as a common denominator.

However, many companies produce several different types products, and it may be difficult or impossible for them to find a common denominator to measure total output. In this case, you need to enter product groups. While marketers naturally view products from the customer's point of view based on their functionality and application, the manufacturing department categorizes products based on processes. Thus, the firm must define product groups based on the similarity of manufacturing processes.

The production department must provide sufficient productivity to produce the required products. It is more concerned with the demand for specific types of productivity resources required for the production of products than with the demand for the products themselves.

Productivity is the ability to produce goods and services. This term refers to the availability of resources necessary to meet demand. In the time span to which the production plan refers, productivity can be expressed as the time available, or sometimes as the number of units that can be produced in that time, or the dollars that can be obtained. The demand for goods needs to be converted into a demand for productivity. At the level of production planning, where fine detail is required, this requires groups, or families of products, based on the similarity of production processes. For example, the production of several models of calculators may require the same processes and the same throughput regardless of differences between models. These calculators will belong to the same product family.

In the period of time to which the production plan relates, it is usually impossible to make major changes in productivity. During this period, it is impossible or very difficult to make additions to or decommission plant and equipment components. However, some things can be changed, and it is the responsibility of production management to identify and evaluate these opportunities. The following changes are usually allowed:

You can hire and fire employees overtime work and reduced working hours, increase or decrease the number of shifts.
During the recession business activity you can create inventories, and with increased demand, sell or use them.
You can outsource work to subcontractors or rent additional equipment. Each option has its own benefits and costs. Production managers must find the cheapest option that would meet the goals and objectives of the business. Basic Strategies So, the problem of production planning has, as a rule, the following characteristics:
A planning horizon of 12 months is applied, with periodic updates, such as monthly or quarterly.
A production demand consists of one or more product families or common units.
There are fluctuations or seasonal changes in demand
In the period provided for by the planning horizon, the workshops and equipment do not change.
Management faces various challenges, such as keeping inventories low, efficient operation of production facilities, high level customer service and good working relationships.

Suppose the predicted demand for a certain group of products is displayed in Fig. 2. 7. Please note that the demand is seasonal.

Three basic strategies can be used when developing a production plan:

1. Pursuit strategy;

2. Uniform production;

3. Subcontract. Pursuit (Demand Satisfaction) Strategy. The pursuit strategy is understood as the production of the volume required in this moment. The level of inventories remains the same, and the volume of production changes in accordance with the level of demand. This strategy is shown in Fig. 2.8.

Figure 2.7 Hypothetical demand curve.

Figure 2.8 Demand Satisfaction Strategy.

The company produces the volume of products, which is just enough to meet the demand at a given time. In some industries it is possible to use only this strategy. For example, farmers must produce during the period when it is possible to grow it. post offices have to process letters during the busy period before Christmas and during the calm period. Restaurants are required to serve dishes when customers order them. Such enterprises cannot stock and accumulate products, they must be able to meet demand when it arises.

In these cases, companies must have sufficient capacity to be able to meet peak demand. Farmers need to have enough machinery and equipment to harvest in the summer, although this equipment will be idle in winter. Companies are forced to hire and train employees to work during peak periods, and after this period, fire them. Sometimes you have to introduce additional shifts and work overtime. All these changes increase the cost.

The advantage of a chasing strategy is that inventory can be kept to a minimum. A good is produced when it is in demand and is not stockpiled. Thus, it is possible to avoid the costs associated with the storage of inventories. These costs can be quite high, as shown in Chapter 9 on Inventory Fundamentals.

Figure 2.9 Uniform production strategy.

Uniform production. With uniform production, a volume of output equal to the average demand is constantly produced. This ratio is shown in Fig. 2. 9. Enterprises calculate the total demand for the period covered by the plan and, on average, produce enough volume to meet this demand. Sometimes the demand is less than the volume produced, in which case inventories are accumulated. In other periods, demand exceeds production, then inventories are used.

The advantage of a level production strategy is that the operation is carried out at a constant level, and this avoids the cost of changing the level of production.

The business does not have to conserve excess capacity resources to meet peak demand. There is no need to hire and train workers, and then fire them during quiet periods. There is an opportunity to form a stable workforce. The disadvantage is the accumulation of inventories during periods of reduced demand.

The storage of these inventories requires cash costs.

Uniform production means that the enterprise uses production capacity at the same pace and produces the same amount of output every working day. The volume of products produced in a month (and sometimes in a week) will vary, because in different months different amount working days.

EXAMPLE

The company wants to produce 10,000 units over the next three months at a steady rate. The first month has 20 business days, the second month has 21 business days, and the third month has 12 business days due to the annual closure of the business. How much does a company need to produce on average per day for uniform production?

Answer

Total production volume - 10,000 units

Total number of working days =20 +21 +12 =53 days

Average daily production =10,000 /53 =188.7 units

Figure 2.10 Subcontracting.

For some types of products, the demand for which varies greatly in different seasons, for example, for Christmas decorations, some form of uniform production will be required. The costs of maintaining idle productive resources, hiring, training and firing employees when using a harassment strategy will be excessive.

Subcontract. As a strategy in its purest form, subcontracting means constantly producing at the level of minimum demand and subcontracting to meet higher demand. Subcontracting can mean purchasing a missing volume of production or rejecting additional demand. In the latter case, you can increase prices when demand increases, or increase the lead time. This strategy is shown in Figure 2.10.

The main advantage of this strategy is the cost.

There are no costs associated with the maintenance of additional production resources and, since production is carried out evenly, there are no costs for changing the volume of production. The main disadvantage is that the purchase price (cost of the product, purchase, transportation and inspection) can be higher than the cost of the product when manufactured at the enterprise.

Businesses rarely make everything themselves or, on the contrary, buy everything they need. The decision about which products to buy and which to produce in-house depends mainly on cost, but there are several other factors that can be taken into account.

The firm may decide in favor of production in order to maintain the confidentiality of processes within the enterprise, guarantee the level of quality, and ensure the employment of employees.

It may be possible to purchase from a supplier that specializes in the design and manufacture of certain components in order to enable the enterprise to focus on its area of specialization, or in order to be able to offer accepted and competitive prices.

For many products, such as nuts and bolts or components that the company does not normally manufacture, the decision is clear. For other products within the company's area of expertise, a decision will need to be made whether to subcontract.

hybrid strategy. The three strategies discussed above are variants of pure strategies. Each has its own costs: equipment, hiring/firing, overtime, inventory, and subcontracting. In fact, a company can use many hybrid hybrid hybrid hybrid or hybrid strategies. Each of them has its own set of cost characteristics. plans.

Figure 2.11 Hybrid strategy.

One of the possible hybrid plans is shown in Figure 2.11.

Demand is met to a certain extent, production is somewhat even, and there are some subcontracts during the peak period. This plan is just one of many options that could be developed.

Development of a stock production plan

In a situation where products are produced for the purpose of stock replenishment, the products are manufactured and stockpiled prior to receiving an order from a customer. Those items that make up inventory are sold and shipped. Examples of such products are ready-made clothing, frozen foods, and bicycles.

Typically, firms produce inventory when:

Demand is quite constant and predictable;
Products vary slightly;
The market requires delivery in a much shorter time than the production time;
Products have a long shelf life. The following information is required to develop a production plan:
Demand forecast for the period covered by the planning period;
Data on the volume of inventories at the beginning of the planning period;
Data on the required volumes of inventories at the end of the planning period;
Information about the current refusals of customers from orders and about orders with overdue payment orders from customers. That is, about orders, the decision to ship which is delayed;
The goal of developing a production plan is to minimize the costs of holding inventories, changing production levels, and the likelihood of desired products in stock (lack of opportunity to deliver on time desired product client).

In this section, we develop a uniform production plan and a pursuit strategy plan.

Consider the general procedure for developing a plan for uniform production.

1. Calculate the total forecasted demand for the period of the planning horizon.

2. Set the initial volume of inventories and the required final volume.

3. Calculate the total volume of products to be produced using the formula:

Total Output = Total Forecast + Backorders + Ending Inventory - Starting Inventory

4. Calculate the volume of production that is required to be produced in each period, for this, divide the total volume of production by the number of periods.

5. Calculate the final volume of inventories in each period.

EXAMPLE

Amalgamated Fish Sinkers manufactures rod weights and wants to develop a production plan for this type of product.

The expected initial inventory is 100 sets, and by the end of the planning period, the company wants to reduce this to 80 sets. The number of working days in each period is the same. There are no failures or unpaid orders.

The predicted demand for weights is shown in the table:

Period	1	2	3	4	5	Total
Forecast (sets)	110	120	130	120	120	600

a. How much output should be produced in each period?
b. What is the ending inventory in each period?
c.If inventory holding costs are $5 per set each period based on ending inventory, what is the total inventory holding cost?
d.What will be the total cost of the plan?

Answer
a. Required total output = 600 +80 – 100 ==580 sets

Production volume in each period =580/5 =116 sets
b.Final Inventory = Initial Inventory + Output - Demand

Closing inventory after first period =100 +116 – 110 ==106 sets

In the same way, the final volume of inventories in each period is calculated, as shown in Figure 2.12.

The ending inventory in period 1 is the initial inventory for period 2:

Closing Inventory (Period 2)=106 +116 – 120 ==102 sets
c.Total inventory holding costs will be: (106 +102 +88 +84 +80) x $5 = $2300
d. Since there were no out-of-stock situations and the level of production did not change, this will be the total cost of the plan.

Figure 2.12 Level production plan: stock production.

Pursuit Strategy Amalgamated Fish Sinkers manufactures another line of products called the "fish feeder". You have to use a pursuit strategy and produce the minimum amount of product that will satisfy the demand in each period. The cost of storing inventories is minimal, there are no costs associated with the lack of goods in the warehouse. However, there are costs due to a change in the level of production.

Consider the example above, assuming that it costs $20 to change production by one set. For example, going from producing 50 sets to producing 60 sets would cost (60 – 50)) x $20 = $200

The initial inventory is 100 sets and the company wants to reduce it to 80 sets in the first period. In this case, the required production volume in the first period is: 110 - ((100 - 80)) = 90 sets

Suppose the volume of production in the period preceding period 1 was 100 sets. Figure 2.13 shows changes in the level of production and the final volume of inventories.

Planned expenses will be:

Cost of changing the level of production = 60 x $20 = $1200

Inventory holding costs = 80 sets x 5 periods x $5 = $2000

Total Plan Costs = $1200 + $2000 = $3200

Development of a production plan on order

In production to order, the manufacturer waits for the order to be received from the customer, and only then proceeds to manufacture the products.

Examples of such items are custom-made clothing, equipment, and any other goods that are made to customer specifications. Very expensive items are usually made to order. Businesses typically work to order when:

The product is manufactured according to the customer's specifications.
The client is ready to wait for the execution of the order.
The production and storage of the product is expensive.
Several product options are offered.

Figure 2.13 Demand Matching Plan: Inventory Production.

Assembly-to-Order When there are multiple variants of a product, such as in automobiles, and when the customer does not agree to wait for the order to be completed, manufacturers produce and stock standard components. After receiving an order from the customer, manufacturers assemble the product from the components in stock according to the order. made to order.

To draw up a production plan for products that are assembled to order, the following information is required:

Forecast by periods for the term of the planning horizon.
Information about the initial portfolio of orders.
Required final portfolio of orders.

Order book. When operating under a make-to-order system, the company does not keep inventory of finished goods. The work is based on a backlog of customer orders. The order backlog usually assumes delivery in the future and does not contain failures and overdue orders. A custom woodwork shop may have orders from customers weeks in advance. This will be the order book. New incoming orders from customers are queued or added to the order book. Manufacturers prefer to control the order book in order to be able to provide a high level of customer service.

Uniform production plan. Consider the general procedure for developing a uniform production plan:

1. Calculate the total forecasted demand for the term of the planning horizon.

2. Determine the initial order book and the desired end order book.

3. Calculate the required total production volume using the formula:

Total production = total forecast + initial order book - final order book

4. Calculate the required output for each period by dividing the total output by the number of periods.

5.Distribute the existing order book over the planning horizon period according to the order completion dates in each period.

EXAMPLE

A small printing house carries out individual orders. Since each time it is required to carry out miscellaneous work, demand is projected as number of hours per week. The company expects demand to be 100 hours per week over the next five weeks. The order book is currently 100 hours, and after those five weeks the company wants to reduce it to 80 hours.

How many hours of work per week will it take to reduce the backlog? What will the backlog be at the end of each week?

Answer

Total production =500 +100 - 80 = 520 hours

Weekly production =520/5 = 104 hours

The portfolio of orders for each week can be calculated using the formula:

Forecast order book = old order book + forecast - production volume

For the 1st week: Projected order book = 100 + 100 - 104 = 96 hours

Week 2: Projected Order Book = 96 + 100 - 104 = 92 hours

The resulting production plan is shown in Figure 2.14.

Figure 2.14 Uniform production plan: make-to-order production.

Resource planning

Having completed the development of a preliminary production plan, it is necessary to compare it with the resources available to the company. This stage is called resource requirements planning, or resource planning. Two questions must be answered:

1. Does the enterprise have the resources to fulfill the production plan?

2.If not, how can the missing resources be replenished?

If it is not possible to achieve a performance that would allow the production plan to be met, then the plan must be changed.

One commonly used tool is a resource inventory. It indicates the number of critical resources (materials, labor and a list of equipment with productivity) needed to produce one average unit of a given product group. Figure 2.15 shows an example of a resource inventory for a company that produces three types of products that make up one family of products - tables, chairs and stools.

If in certain period If a firm plans to produce 500 tables, 300 chairs, and 1,500 stools, it can calculate how much wood and labor it will need to do so.

For example, the required volume of the tree:

Tables: 500 x 20 = 10,000 board linear feet

Chairs: 300 x 10 = 3000 board linear feet

Stools: 1500 x 5 = 7500 board linear feet

Total required volume of wood =20500 board, linear feet

Figure 2.15 Resource inventory.

Required amount of labor resources:

Tables: 500 x 1.31 = 655 standard hours

Chairs: 300 x 0.85 = 255 standard hours

Stools: 1500 x 0.55 = 825 standard hours

Total required workforce = 1735 standard hours

The company must now compare the need for wood and labor with the resources available. For example, let's say that the typically available labor during this period is 1600 hours. The priority plan requires 1735 hours, a difference of 135 hours, or about 8.4%. reduce the need for labor resources. You can partially reschedule production to an earlier date or postpone shipment.

SUMMARY

Production planning is the first stage of the production planning and control system. The planning horizon is usually one year. The minimum planning horizon depends on the time of procurement of materials and production. The level of detail is low. Typically, a plan is developed for product families based on the similarity of manufacturing processes or on a common unit of measure.

There are three basic strategies that can be used to develop a production plan: pursuit, uniform production, and subcontracting. Each of these has its own advantages and disadvantages in terms of operations and costs. Operations managers must choose the best combination of these baselines that will keep total costs to a minimum while maintaining high levels of customer service.

The inventory production plan determines how much to produce in each period to:

Realization of the forecast;
Maintaining the required level of inventories.

While it is necessary to meet demand, it is also necessary to balance the costs of holding inventories with the costs of changing the level of production.

The make-to-order production plan determines the volume of products that must be produced in each period for:

Realization of the forecast;
Maintaining the planned portfolio of orders.

When the backlog is too large, the associated cost is equal to the cost of rejecting the order. If customers have to wait too long for delivery, they may decide to order from another firm. As with a stock production plan, demand must be met, and the cost of changing production levels must be balanced in the plan with the costs incurred when the backlog is larger than required.

KEY TERMS
A priority
Performance
Manufacturing Resource Planning (MRP II)
Pursuit Strategy (Demand Matching)
Uniform production strategy
Subcontracting strategy
Hybrid strategy
Uniform production plan
Order book
Resource inventory

QUESTIONS

1. What four questions should an effective planning system answer?

2. Define performance and priority. Why are they important for production planning?

3. Describe each of the plans listed below with the goal, planning horizon, level of detail, and planning cycle for each:

Strategic business plan
Production plan
Master production schedule
Resource requirement plan
Control of production activities.

4. Describe the responsibilities and contributions of the marketing, production, financial and technical departments in developing a strategic business plan.

5. Describe the relationship between the production plan, the master production schedule, and the resource requirement plan.

6. What is the difference between strategic business planning and sales and operations planning (SOP)? What are the main benefits of SOP?

7.What is MRP with feedback?

8.What is MRP II?

9.How can performance change in a short period of time?

10. Why is it necessary to choose a common unit of measure or define product groups when developing a production plan?

11. On the basis of what should groups (families) of products be determined?

12. Name five typical characteristics of a production planning problem.

13. Describe each of the three basic strategies, which are used to develop a production plan. What are the advantages and disadvantages of each of them.

14. What is a hybrid strategy? Why is it used?

15. Name four conditions, depending on which the company produces stocks or carries out production under the order.

16. What information is needed to develop a stock production plan?

17. Name the stages of developing a plan for the production of stocks.

18. Describe the difference between make-to-order and make-to-order. Give examples of both options.

19. What information is needed to develop a custom production plan? How is it different from the information needed to develop a stockpile plan?

20. Describe the general procedure for developing a uniform production plan when using a make-to-order system.

21. What is a resource inventory? At what level of the planning hierarchy is it used?

TASKS

2.1. If the starting inventory is 500 units, demand is 800 units, and production is 600 units, what will be the final inventory?

Answer: 300 units

2.2. The company wants to produce 500 units at a steady pace over the next four months. These months have 19, 22, 20 and 21 working days, respectively. How much output should the company produce on average per day with uniform production?

Answer: Average production per day = 6.1 units

2.3. The company plans to produce 20,000 units of products in a three-month period. These months have 22, 24 and 19 business days, respectively. How much output should the company produce per day on average?

2.4. According to the conditions of task 2.2, what volume of products will the company produce in each of the four months?

1st month: 115, 9 3rd month: 122

2nd month: 134.2 4th month: 128.1

2.5. According to the conditions of task 2.3, what volume of products will the company produce in each of the three months?

2.6. The production line should produce 1000 units per month. The sales forecast is shown in the table. Calculate the forecast volume of inventories at the end of the period. The initial volume of inventories is 500 units. In all periods, the same number of working days.

Answer: in the 1st period, the final volume of inventories will be 700 units.

2.7. A company wants to develop a uniform production plan for a family of products. The initial volume of inventories is 100 units; by the end of the planning period, this volume is expected to increase to 130 units. Demand in each period is shown in the table. How much output should the company produce in each period? What will be the final volume of inventories in each period? In all periods, the same number of working days.

Answer: Total production = 750 units

Volume of production in each period = 125 units

The final volume of inventories in the 1st period is 125, in the 5th period - 115 ..

2.8. The company wants to develop a uniform production plan for a family of products. The initial inventory is 500 units, by the end of the planning period, this is expected to decrease to 300 units. Demand in each period is shown in the table. All periods have an equal number of working days. How much production should the company produce in each period?

2.9. The company wants to develop a uniform production plan.

The initial volume of inventories is zero. Demand in the next four periods is shown in the table.

a. At what rate of production in each period will the volume of inventories at the end of the 4th period remain zero?

b.When will orders be backlogged and how much?

c. What is the uniform rate of production in each period to avoid backorders? What will be the final inventory in the 4th period?

Answer: a. 9 units

b. 1st period, minus 1

c. 10 units, 4 units

2.10. If inventory holding costs are $50 per item each period, and out of stock results in a cost of $500 per item, what would be the cost of the plan developed in Problem 2.9a? What will be the cost of the plan developed in task 2.9c?

Answer: The total cost of the plan in problem 2.9 a = $650

Total costs according to the plan in problem 2.9 c = $600

2.11. A company wants to develop a uniform production plan for a family of products. The initial volume of inventories is 100 units, by the end of the planning period, this volume is expected to increase to 130 units. Demand in each period is shown in the table. Calculate the total production, daily production, and production and inventory in each month.

Answer: Monthly production in May = 156 units

Ending inventory in May = 151 units

2.12 The company wants to develop a level production plan for a family of products. The initial inventory is 500 units and is expected to drop to 300 by the end of the planning period. The demand for each month is shown in the table.

2.13. In accordance with employment contract the company must hire enough employees to produce 100 units per week for one shift or 200 units per week for two shifts. Hire additional workers In the fourth week, you can assign an additional shift to another department (up to 100 units) to work partially or completely. In the second week, there will be a planned shutdown of the enterprise for maintenance, due to which the production will be halved. Develop a production plan.

2.14. If the initial order book is 400 units, the projected demand is 600 units, and the production volume is 800 units, what will the final order book be?

Answer: 200 units

2.15. Initial order book volume is 800 units. Forecast demand is shown in the table. Calculate the weekly production volume with uniform production if the order book volume is expected to be reduced to 400 units.

Answer: Total production = 4200 units

Weekly production = 700 units

Order book volume at the end of the 1st week = 700 units

2.16. The initial volume of the portfolio of orders is 1000 units.

The forecasted demand is shown in the table. Calculate the weekly production with uniform production if you expect to increase the volume of the order book to 1200 units.

2.17. Based on the data in the table, calculate the number of workers required for uniform production and the total inventory at the end of the month. Each worker can produce 15 units per day, and the required ending inventory is 9,000 units.

Answer: Required number of workers = 98 people

Inventory at the end of the first month = 12900 units

2.18. Based on the data in the table, calculate the number of workers that will be required for uniform production, and the total volume of inventories at the end of the month. Each worker can produce 9 units per day, and the required ending inventory is 800 units.

Why is it impossible to achieve the planned ending inventory?

The release of goods and the provision of services cannot be productive without a clear production plan. Effective forecasting is fundamental in any entrepreneurial activity. This difficult process covering a wide range of activities that ensure that materials, equipment and human resources are sufficient to complete the job. That is why, if you decide to organize your own production, you will need a high-quality document that answers all the questions posed.

At its core, production planning represents the beating heart of any production process. Its goal is to minimize the time required for production and costs, effective organization, as well as the use of resources and the provision maximum efficiency at work.

It includes many elements, ranging from the daily activities of the staff to the ability to ensure accurate delivery times for the customer.

Production plan (PP) of the organization

PP is an administrative process that takes place within manufacturing business and includes decisions on the required amount of raw materials, personnel and other necessary resources that are purchased to create finished products according to the schedule. A typical forecasting will seek to maximize profitability while maintaining a satisfied customer base. PP, as well as marketing, financial and - an integral and important part of the analysis of the profitability of starting a business.

Thinking through the stages of product release in an organization provides answers to two main questions, namely:

1. What work needs to be done?

2. How long does it take to complete the work?

First of all, the calculations are based on sales forecasting. This is necessary condition to control the company's revenue.

General production plan

PP points:

1. Date of establishment of the enterprise.

2. Information about the capacities that are going to be used for the production.

3. Schemes and methods of supply of raw materials, semi-finished products and other resources.

4. Quantity of equipment (machines, machines, etc.). It is important to indicate whether there is enough equipment in the organization, as well as its capacity.

5. Characteristics of the workflow (illustrations, diagrams, detailed description) from the supply of raw materials to the release of finished products.

Schedule

The Master Production Plan (MPS) is based on data typically 3, 6 months or 1 year. MPS is characterized by volume indicators (tons, liters, pieces) of actually manufactured products. The marketing plan specifies the quantity of products needed, either based on forecasts, customer orders, or others.

So, the PP schedule is a visual form of presenting information about ongoing activities related to the release of products, and the periods of their implementation. This section should describe:

1. Logistics of the organization.

2. The cost of the required resources: basic materials, raw materials, spare parts, semi-finished products.

3. The cost of electricity and fuel during the technological process.

How to calculate these costs? For this, the standard method is often used, when the calculations of materials are carried out according to strictly established cost standards.

Drawing up a schedule is preceded by monitoring of existing capacities, which should also show labor resources to meet the approved output indicators. By the way, when organizing such business activities, it is important to choose high-quality equipment. If it is expensive, the best option would be to purchase equipment on lease.

Production and financial plan

The production and financial plan (PROFINPLAN) is an estimate of cash costs that is necessary for the production process and is the basis for calculating the required amount of financing. It also presents all indicators that show the work of an enterprise or plant.

Sections of PROFINPLAN:

Release and sale of goods;

- increase production assets;

- calculation of the cost of goods;

– Sources for covering expenses;

– supply of materials and other resources.

By the way, in this plan, similar calculations are carried out as in the financial one, which we talked about in. PROFINPLAN indicators (revenue, profit, volume of output in monetary and physical terms, fund wages, the established price, taxes and other payments to the budget) are formed in stages: first, planned targets for 1 year, then quarterly, etc.

Production control plan (PPK)

The PPK is developed specifically for each enterprise, and it must be signed by the director.

All entrepreneurs and enterprises ( , legal entities) should be carried out production control. The PPC must include:

1. Sanitary rules and control over their implementation.

2. List of qualified officials authorized to carry out control.

3. Certification of employees.

4. Medical examination, hygienic training of workers involved in the release, transportation, storage food products, household services, education with children.

5. Laboratory control.

6. List of biological, chemical and other factors that are potentially dangerous to the life and health of an employee.

7. List of works and services of an enterprise or organization that are potentially dangerous to humans, which are subject to control by the sanitary and epidemiological station, licensing or certification.

8. List of possible emergencies.

9. Required documentation: officially published regulations, the conclusion of the sanitary and epidemiological station, certificates of goods, sanitary passport, etc.

10. Additional measures to be taken to effectively control the implementation of hygienic, sanitary norms and rules.

The CPP does not have a single form and is compiled individually for each enterprise, but must include the above information.