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Production Planning: how efficient operations and agile decisions are key to face market changes

18 January 2021
Article by Regina Paiva, Trainee Consultant in Industrial Engineering and Management at INEGI.

Production is a complex activity marked by uncertainty - uncertainty about market fluctuations, consumer behavior, the price of raw materials, among many other variables.

We still don't have a crystal ball that predicts the future. However, there are planning strategies and tools that have proven to be effective in supporting decision making, allowing you to set priorities in production taking into account the available capacity and resources.

The response capacity of a company and its adaptation to the market is increasingly determining for its survival, and it is imperative to strengthen organizations with processes capable of predicting market needs and helping to establish competent guidelines to respond in the best possible way.

Production plan streamlines reaction to market fluctuations

Planning can be evaluated according to different time horizons, being strategic, tactical or operational, when considering the long, medium and short term, respectively.

In our culture, we tend to move from Strategy to Operational quickly. However, the tactical planning layer prevents many issues at day-to-day level, allowing the company to plan the next day / week, instead of focusing on problems and defaults of previous days / weeks.

Acting at all these levels of planning makes the production process clearer, allowing greater predictability so that the company can adapt its production capacity to market fluctuations.

It was with this objective in mind that the CIFIAL group, a leading company in the area of ​​taps and sanitary ware, challenged INEGI's Industrial Engineering and Management consulting team to restructure its production planning methodology.

A project that is underway and aims reformulating the operational processes adjacent to Planning, such as order registration, stock management and supply. It is intended to understand the current scenario of the processes and redesign them to increase their efficiency.

Quickly adjusting the supply, that is, the goods produced, to market demand will result in many gains for the company. The reduction of urgent orders in production, the ease of meeting delivery deadlines, and maintaining an attractive service level for the customer are some of the main advantages.

But it goes further than that. Effective planning also promotes an organized work space, since operations are carried out according to plan, enhances improvements in the appropriate levels of stocks in the warehouse, and, finally, influences the equipment and production efficiency itself (allowing mainly to reduce setup costs because the sequence of processes are thought out and defined for a lower cost for the company).

An excellent planning will not guarantee 100% compliance with the plans. However, it will reduce failures to exceptions and not to the rule, which puts the organization always in contingency mode, or in a colloquial language, in "fireman mode".

Production control tools ensure visibility and anticipate problems

The existence of a well-defined plan does not, however, dispense with the need for control and monitoring. The existence of malfunctions, delays, errors and new customer orders can impact the previously defined plan and, therefore, it is necessary to make decisions that allow them to adapt to new needs without compromising delivery to the customer.

In this sense, it may be useful to include forecasting algorithms that make it possible to anticipate customer demand and, thus, act with greater advance and in a more effective way. To this end, we must ensure a good integration between the different processes and teams, namely, customer support, supplies, stock management, and production.

The importance that this production planning process assumes reverts to organizations, since, when it is efficient and optimized, it represents considerable competitive advantages and that, increasingly, allow to distinguish companies in the same sector of activity.

Foto: Grupo CIFIAL

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