We are in the age of planning. Why? Because planning ahead of time results in increased efficiency.
Production planning and material management in any industry go hand in hand. Production planning refers to checking out production strategies and targets, whereas material management refers to the controlling of the amount, location, storage, and movement of material used in production or produced by the industry. So now let us understand why these two are so important.
To Attack the Costs
Costs. We all dread this word. We try our best to not let costs get the better of us. So, let us talk about how we can attack these costs from all fronts. A properly planned production will tell one how much material would be required in each production cycle. Accordingly, the purchase of raw materials can be timed to ensure reasonable purchase price levels. Further, efficient storing of both raw materials and finished goods will help in minimal wastage, again ensuring minimised costs.
Accurate Count of Inventory
Many times, we end up having only a fraction of the inventory we thought we should have had. This is due to lost, misplaced, stolen, mislabelled, etc. In other words, horrendous material management. Production planning will predict how much raw material is needed, at what point of time, and how much of that will get converted to finished goods. This knowledge, coupled with great management of the inventory, will result in an accurate count of the inventory at any given time.
Higher Efficiency
Imagine travelling across the world for a vacation. If you pre-plan the trip, you can save up for the flight tickets, plan it keeping comfort in mind, and in the end, have a smooth journey. On the contrary, however, a last-minute trip is usually full of chaos, confusion, jitters, and a whole lot of frustration. Apply the same analogy to the production floor. Avoid break-downs in the line because of the delayed supply of raw materials, etc. If you want your production cycle to run smoothly without any interruptions, obstacles, or total turmoil, you know what you have to do – plan your production, and know how to manage the material with the utmost in terms of care and attention using cloud ERP software solutions.
Maintenance of Quality Standards
Quality is of the highest importance. Some may even overlook costs if the quality is at risk because the quality is what the world will define you with. On a chaotic production floor, is the supervisor more likely to miss a damaged finished good than when monitoring a smoothly running production line? Well, of course! Keep control of the shop floor, identify problems, and deal with them straight away through software for production planning and efficient material management. The more strictly and tightly you keep an eye on your production floor, the less likely it is for you to have discrepancies in your quality standards.
As stated before, production wastage is reduced, which, in turn, means that the quality of the product is improving.
Production is like having a detailed recipe and a count of the ingredients ready before diving in to prepare the feast. You know exactly what you need; when you need it; and how much of it will be left for preparing the next meal. It just makes life a whole lot easier, does it not? Production planning is not different.