Production planning is the planning of production and manufacturing modules in a company or industry. It utilizes the resource allocation of activities of employees, materials and production capacity, in order to serve different customers.
Different types of production methods, such as single item manufacturing, batch production, mass production, continuous production etc. have their own type of production planning. Production planning can be combined with production control into production planning and control, or it can be combined with enterprise resource planning.
Production planning is the future of production. It can help in efficient manufacturing or setting up of a production site by facilitating required needs. A production plan is made periodically for a specific time period, called the planning horizon. It can comprise the following activities:
Determination of the required product mix and factory load to satisfy customers needs.
Matching the required level of production to the existing resources.
Scheduling and choosing the actual work to be started in the manufacturing facility"
Setting up and delivering production orders to production facilities.
In order to develop production plans, the production planner or production planning department needs to work closely together with the marketing department and sales department. They can provide sales forecasts, or a listing of customer orders." The "work is usually selected from a variety of product types which may require different resources and serve different customers. Therefore, the selection must optimize customer-independent performance measures such as cycle time and customer-dependent performance measures such as on-time delivery."
A critical factor in production planning is "the accurate estimation of the productive capacity of available resources, yet this is one of the most difficult tasks to perform well". Production planning should always take "into account material availability, resource availability and knowledge of future demand".