List and explain each step of the production planning process

Answer 1

- Sales Forecasting is the process of developing a prediction of future demand for a company's products.
- Sales and Operations Planning (SOP) is the process of determining what the company will produce. The Sales Forecast and Starting Inventory levels are inputs to this process. At first glance, it would seem that a company should just produce products to match the forecasted sales, but developing the production plan can be complicated because capacity must be considered. Many products have seasonal demand, and to meet demand during peak periods, production planners must decide whether to build up inventory levels before the peak demand, increase capacity during the peak period, subcontract production, or use some combination.
- Demand Management is the process of breaking down the production plan into smaller time units, such as weekly or even daily production figures, to meet demand for individual products.
- Materials Requirement Planning (MRP) process determines the amount and timing of raw materials orders. This process answers the questions: "What raw materials should we be ordering so we can meet a particular level of production?" and "When should we order these materials?"
- Purchasing takes the quantity and timing information from MRP and creates purchase orders for raw materials, which it transmits to qualified suppliers.
- Detailed Scheduling uses Demand Management's production plans as an input for a production schedule. Methods of detailed scheduling depend on the manufacturing environment. For Fitter Snacker, the detailed production schedule will determine when to switch between the production of NRG-A to NRG-B bars.
- Production uses the detailed schedule to manage daily operations, answering the questions, "What should we be producing?" and "What staffing do I need?".