How to use aggregate production planning to succeed?
Learn what is Aggregate Production Planning and how to apply it in your business.
Step by step. Don’t rush things out.
A good plan takes time.
There are people who dislike creating plans and there are those who love to create and imagine a better way to do everything. Which group are you in? Let’s figure it out!
What are you going to see here?
- What is aggregate production planning (APP)?
- What is the main goal of APP?
- How to make a good APP?
Let’s go?
What is aggregate production planning (APP)?
Aggregate production planning (APP) is a method applied to manufactures to reduce costs and improve all kinds of productions related to manufacturing.
This method helps to keep a balance between supply and demand in the market for a short or medium period of time. It takes around 3-18 months to conclude the aggregate plan.
However, it requires the determination of the whole team. Every part of the company should be prepared to ensure that the plan will keep going.
A good leader helps to increase productivity and prepare the team to achieve its full potential. Leadership in project management is a key to success.
BE PREPARED TO DO A GOOD PROJECT MANAGEMENT!!
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What is the main goal of APP?
The main goal of Aggregate production planning (APP) is to optimize manufacturing by minimizing costs of operations and increasing productivity.
It’s a great opportunity to reduce costs to the manufacturer. APP permits aggregation across several products, that’s why they called it “aggregate”.
Three points might be considered:
- The minimization of production costs;
- The maximization of meeting demand;
- The minimization of production variation levels.
Nevertheless, understanding the modern concept of Design Thinking and how it can be applied in project management it can improve Aggregate production planning (APP) as a tool.
Do you know how to make a good Aggregate production planning (APP)? Not yet? Follow the steps below and get things done!
How to make a good APP?
A good plan requires full attention and a great workforce. The team has to be aligned with the company’s proposal. It’s also important to know how to change plans or adapt. We are living in such a volatile world.
There are two categories of techniques to apply Aggregate Production Planning: Informal trial-and-error techniques and mathematical techniques.
The informal one is commonly applied. However, mathematical techniques are more used in research to compare the effectiveness.
There are 5 steps to make sure it will be a success:
1- Demand Forecast
First of all, it's important to estimate what will happen to sales in a given time frame.
Thus, this will guide all sectors’ planning and decision-making.
1- Supply Forecast
After having made the demand forecast, you will need to develop your offer, always aiming to meet what you estimated in the previous topic
3- Estimate all the changes that can happen
This step is very important because by estimating all the changes that can happen both with demand and with productive resources, you will be managing risks.
This way, you will be able to predict and correct unforeseen events that will happen, without harming the organization.
In Japanese, there is Kaizen culture which means continuous improvement. We have so much to learn with this philosophy. When we are doing some planning we have to be prepared to improve and change when it seems to be possible.
4- Storage Period
Calculating the stock serves to predict precisely what will be offered in the period and what will be requested.
Thus, this reduces the risk of stock and production shortages.
5- Budget planning
Last but not least, you need to do budget planning.
Because it allows the manager to strategically visualize the long term, analyzing and predicting established goals and scenarios.
In short, budget management prevents losses, crises, and unforeseen events.
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When we talk about projects, we think about something of great magnitude. This is a mistake, because a project may be involved with small day-to-day activities. We can cite some examples in solving internal problems, negotiating with suppliers, delivering products, implementing systems and strategies. The correct management of the projects brings benefits to the organization, being able to be used in problem-solving. Good project management defines precisely the decision-making processes and also identify causes and effects.
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