Your Comprehensive Guide to Production Planning Software
The benefits of production planning software vs scheduling are about the granularity of the plan: capacity plans (or master production schedules) are not granular and factor in less granular things, like high level capacity, forecasts, inventory, and transfer times. They are often done weekly, and that’s where production planning software will shine. Once you start scheduling operations down to the hour, that’s a job for production scheduling software. Here are a few of the commonly asked questions when searching for products.
1. What is production planning software?
Production planning software helps you determine how to run production based on your client orders, forecasts, and safety stock requirements. It enables you to figure out the “what,” the “when,” the “where,” and the “how many” behind all your manufacturing activities:
- What: Determine the exact product mix you’ll need to produce to satisfy customer demand.
- When: Create a production plan that’s realistic for your plants and teams.
- Where: Get the most out of all your plants—not just the ones that happen to be located near the areas where customer demand is currently highest.
- How many: Plan production down to the exact number of units that will enable you to meet current and forecasted demand.
Once your production planning software has produced all of this information, you can send it to your production scheduling system and determine the best sequence for making the products and the ideal use of your machines to ensure your plants run as efficiently as possible.
2. What are the benefits of production planning software?
The leading benefit of production planning software is that it enables you to create a master production schedule. This schedule gives you a detailed, time-phased representation of the quantities, timing, and sequencing in your manufacturing operations.
Your master production schedule also enables you to understand the constraints across your entire manufacturing network. Your network probably includes production plants, suppliers, and distribution centers. With production planning, you can not only create a capacity plan for your production facilities, but also make a warehouse plan that dictates how you should be transferring and storing products to meet demand signals at each distribution center. You can then create a supply plan that stipulates which materials you should be purchasing and how you should be moving them between facilities to keep your supply chain balanced.
All of the information in your master production schedule will be based on constraints. This is where production planning software excels over enterprise resource planning (ERP) systems. Although ERP systems often offer production planning capabilities, the plans they produce don’t always reflect your company’s constraints. An ERP may tell you that you need to make 1,000 units of a product this week, but it won’t take into account that you can only make 500 units in a day and that the materials you need are in a warehouse three states away—details that can have a dramatic impact on your production plan. By contrast, production planning software will help you use your production plants and your entire supply chain network to meet your demand on time at the lowest possible cost.
Another major benefit of production planning software is the ability to reduce planning cycle time. Even today, too many companies still plan production manually using spreadsheets. This approach forces teams to review every item and event throughout the production cycle. A production planning solution that lets you manage by exception can dramatically increase the efficiency of your planning team by allowing them to focus only on the areas that urgently need attention.
With production planning software, you can also optimize your inventory of raw materials and finished goods. With better signals about what your inventory should be, you can make smarter purchase decisions throughout your supply chain and plan production in ways that improve inventory turnover.
Better production planning will also help you improve customer service levels. Rather than constantly navigating the challenges of unexpected shortages and downtimes, you’ll be able to produce wherever and whenever you need to so that you can ensure you have the right products in the right places at the right time.
You can also use production planning software to increase production throughput. Suppose your factory produces pens in three colors: red, black, and blue. Every time you switch to producing a different color, you must clean out and reset your machines. This means you should strive to batch your orders for each color as much as possible so you can minimize changeovers and reduce nonproductive time. Production planning will enable you to look across your manufacturing facilities, understand demand patterns, and then sequence production of each color to hit your production targets with as few changeovers as possible. As you increase throughput and reduce nonproductive times, you’ll naturally increase your utilization of capital equipment too.
Consider how production planning software can help you reduce waste and obsolescence. The software lets you monitor shelf life closely to make the best use of your inventory. If some products are set to expire in three days, you can avoid shipping them to a customer. If you have a backlog of items with several months of shelf life remaining, you can focus on using up that inventory and slow down your purchasing of the raw materials these products contain. As you reduce waste, you’ll reduce labor costs because you’ll stop building products you don’t really need.
Your production planning software can also help you capture tribal knowledge. Detail schedulers typically have many years’ worth of information in their heads. What will happen to your business when they retire or get promoted? By capturing this information in software, you can systematize it and make it available to your next generation of employees.
And finally, good production planning can help you assess the impact of major supply chain disruptions. Over the past few years, we’ve all seen how turmoil in the global supply chain has made business more challenging for manufacturers. Rather than panicking and making sweeping changes to your operations, you can use your production planning software to evaluate the exact impact of each disruption in terms of demand spikes, materials shortages, or changes in the labor force. You can then take precise steps to protect your business.
3. Which companies should be using production planning software?
Consider using production planning software if your revenues are at least $150 million and you’re running a manufacturing business with multiple plants. The software will be ideal for you if you have alternate sources for each of your raw materials—in other words, a choice of at least two vendors from which you can buy each item in your supply chain. It will also be a good fit if you have more than one location in which you can make each of your products. When there’s a great degree of variability around your “what,” “where,” “when,” and “how many,” your company will realize the benefits of using powerful software, rather than spreadsheets, for production planning.
The benefits we’re discussing here aren’t limited to a particular industry. But we’ve found that most companies that benefit from production planning software are in the consumer-packaged goods, food and beverage, durables, life sciences, and chemicals industries.
4. Checklist of the must-have features and capabilities of a production planning software provider
Now that we’ve explored the high-level goals and benefits of production planning software, let’s run down the features your software should provide. Make sure your solution enables you to:
- Model constraints. Every manufacturer faces machine capacity constraints. But you’ll also need to enter information about supplier constraints such as minimum and maximum purchase quantities. You’ll also want to configure your software to reflect your reality around lead times, costs, and alternate production.
- Explode bills of materials (BOM). You’ve probably experienced the need to “explode” (or expand) a higher-level BOM into its constituent parts and subassemblies. This process allows you to understand the components you’ll need to build a certain product and the hierarchical relationship between these parts.
- Track shelf-life expiry. Your production planning software can help you track shelf-life expiry by integrating functions such as inventory management, scheduling, and shelf-life tracking into one system. If your solution is connected to your inventory databases, it can automatically update the shelf-life status of items in real time. Your software can also generate alerts and notifications when the remaining shelf life of an item approaches a predefined threshold. By considering the remaining shelf life of products during scheduling, your software can help minimize the risk of producing more items than can be consumed or sold before their expiration.
- Manage multiple users. More and more manufacturers are working in decentralized environments where users are logging in from sites across the country. Implementing the right production planning solution can give all your stakeholders visibility into production status at all your locations.
- Integrate with other systems. You’ll also need your production planning software to integrate with your ERP platform. But consider that you’ll also want your software to be able to pull in critical information from manufacturing execution systems (MES) and other platforms. Make sure that any production planning system you consider offers an integration layer that makes it easy for you to import and export data across multiple systems and transform its format as needed. Your system should also offer certified integrations to the leading ERP and MES platforms to minimize work for your IT team.
- Meet the unique challenges of your industry. Identify the biggest pain points for your specific type of manufacturing and make sure your new solution offers features to address them. For example, a manufacturer in the life sciences industry will want to see broad and deep functionality around managing patent expirations and streamlining new product launches.
5. Questions to ask a potential production planning software provider
As you research production planning software, be prepared to ask potential providers highly specific questions about the capabilities of their platforms and the results customers have achieved with them. Here are the questions we recommend:
- Have you performed this kind of implementation before? Find out about your potential software provider’s track record of implementing their software for companies like yours. If it’s their first or second time, they’ll be learning along with you. Look for a provider that has a proven implementation methodology in place. Not only will they be able to bring your solution to life quickly and minimize your time to value, but they’ll also be able to share years of business expertise with you.
- How experienced are your consultants? As essential as it is to choose the right software, keep in mind that it’s equally important to use your implementation as an opportunity to enhance your business processes based on the insights and experience of your provider’s seasoned consultants. Having a combination of best-in-class software and strategic business processes is what will take your production to a new level. Ask your potential provider if you can speak with some of their consultants before you make a final decision. Look for consultants who challenge your way of thinking and are clearly ready to do more than simply implement your software.
- Are your planning and scheduling functions integrated? Some providers offer production planning software but only make scheduling features available through a bolt-on module or a solution offered by a third party. This approach requires an integration point, and integrations sometimes break. Avoid this hassle by looking for a solution that features integrated planning and scheduling. When you have planning and scheduling functionality available as part of your platform, you’ll only have one provider to deal with as you customize and upgrade your solution. You’ll also eliminate the chances that technical issues will prevent some of your team members from accessing the features they need as they plan and schedule production.
- What kind of engagement process do you offer for new clients? There’s so much more to using production planning software than simply implementing a platform and providing basic user training. Many planners have been doing their jobs in spreadsheets for years or even decades. Transitioning an entire organization to a sophisticated production planning solution can deliver impressive benefits and an outstanding ROI, but it takes time.
Make sure you find a provider that’s committed to helping you go through the process the right way. Your provider should have a methodology for helping you formulate your project objectives, map out your ideal outcomes, identify your biggest obstacles and plan to how overcome them, and project the overall benefits you hope to achieve from the project.
6. Tips for using production planning software effectively
Even after you’ve chosen the right production planning software for your business, your job isn’t done. To ensure you have a successful implementation, make sure you:
- Identify the outcomes you want to achieve with the software. Good production planning solutions are flexible enough to enforce a wide range of constraints. Stay focused on meeting your most important objectives with the initial implementation. Build out your constraints in a layered fashion by implementing your most important constraints—such as capacity—up front and adding new ones over time.
- Watch for scope creep. During your implementation, stakeholders may be tempted to add to the original implementation plan. Keep in mind that when the scope increases, the extra work will likely lengthen your time to value.
- Create a production planning center of excellence. To get the most out of your software, designate a person or small team who will develop a deep understanding of how the solution works and be ready to help others in your organization use it effectively.
7. Why use Logility’s production planning software?
There are many reasons to choose Logility’s production planning software. Here are just a few:
- Logility is a thought leader in the production planning space. We’ve been in business for more than 50 years. When you work with us, you tap into the expertise of consultants who have been helping manufacturers thrive for decades.
- Our supply chain planning software is prescriptive. When companies try to plan production manually, they often spend days or even weeks to come up with one answer. Logility provides multiple answers to any question so your stakeholders can choose the best direction for your organization. Our software not only saves you time and effort, but also enhances the quality of each decision you make.
- Most of our products have been on the market for many years. Some of the world’s most demanding manufacturers rely on Logility. To continue earning their trust, we invest in making our solutions as robust as possible.
- Our products are built to scale. That’s why Logility is an ideal platform for growing businesses.