The production plan is a special section of business documentation containing detailed description technological processes. It is presented to investors for consideration. This paragraph should be given special attention, as it reflects the skills of the entrepreneur, and it evaluates the prospects of the business. Therefore, if a sufficiently serious event is planned with the involvement of third-party assets, the production plan in the business plan must be carried out professionally.

The calculations that accompany the production plan should be based on the projected volumes of sales and supply of raw materials. The most obvious will be to reinforce the information with a generated calendar (production table) for the supply of inventories, storage and shipment finished products to retailers or end consumers.

The content of the production plan is based on the chain of transformations of input resources into output technological process. Personnel, investments, equipment, raw materials will be used as capacities at the enterprise. At the output, the organization, according to the production project, must issue goods or services that will be in demand in the market and of interest to the consumer.

Features of drawing up a production plan

After the leading sections of the production plan are outlined, it is necessary to determine and predict the indicators used to justify professional calculations. On a standard business example, the following parameters are specified:

• Price utilities. Almost any production in a business requires the use of electrical networks, gas, water consumption and sanitation. When determining the production plan, the costs for the services of specialized companies are taken into account by month, quarter, year;
• Before drawing up a production plan for a business plan, it is important to determine the level of costs for the payment wages staff. It is quite possible that in the first year of operation this will be the largest item of expenditure;
• In the technological plan of business, it is important to lay the supply. For certain categories of production, various formulas for the cost and output of the ratio to sales can be used. The classic proportion of production in business is to calculate the profitability of 1:2. That is, if the cost of producing a unit of goods is 1 ruble, it should cost at least 2 rubles in the end.

In addition to the costs included in business planning, the company's revenue is also taken into account. This includes marginal profit, efficiency in attracting qualified specialists and return on investment. It will also be important to reflect the impact of production costs on the business.

Classification of production plans

Before you start working on a paragraph, you need to decide on the type of end result. This can be an aggregate section of the production business plan, a leading work schedule and a supply plan. According to the frequency of development, they can be short-term (up to 2 years), medium-term (up to 5 years) and long-term (from 10 years and longer). When planning the creation or expansion of a large firm, it is recommended to work out all types of production process plans. This the best way reflects the picture of profitability.

Contents of the "production plan" section

The structure of the descriptive part of the technological process is inextricably linked with the expenditure of investments and the further distribution of finances to own working capital. Taking into account the peculiarities of the production plan, when drawing up project documentation use the following structure:

• Description of the main production technology that is used to manufacture the target product according to the plan. In this part of the project, all stages of the technological process are described in detail - from the purchase of raw materials to the sale to the consumer. If the workflow planning is based on a unique manufacturing method, the costs and time for patent approval should be factored in;
• Description of the algorithm for the purchase of raw materials, leading suppliers, the cost of inventories. In the description of the production plan, it would be advisable to include the organization of transportation, storage and delivery to the production line, as well as methods for the disposal of waste raw materials;
• Description of involved premises, territories, land plots. In conditions of limited resources for opening an IP, it is advisable to attract capacities, transport on a lease basis.

The production part of the business plan contains the procedure for supplying energy resources or a plan for upgrading existing engineering networks

This section should also include calculation rules for determining the cost of finished products.

It is important to consider that the number of technical and economic indicators of the business plan includes fixed and variable costs of the enterprise.

Production resources and implementation program

A typical classification of technical supply allows you to most accurately determine the sources of consumption in order to justify the volume of production in the business. In most cases, project documentation developers adhere to current standards. What refers to the resources described in the program of production and sale:

• Material supply - working capital, capital, land and energy supply;
• Resources are intangible. The production plan of the enterprise according to the sample includes a description of patents, copyrights, brands and used software;
• The staff is presented as a key resource in any business idea to fulfill the current and future tasks of the enterprise;
• The business plan should reflect the calculation of the need for labor resources, including the burden on the factor of entrepreneurial ability and the administrative apparatus;
• In the central section of the production plan, funds are taken into account by various sources of origin. It could be the founders' money, current assets enterprises attracted investments. The material factors of production have a direct impact on the company's processes. If they are insufficient, the risk of supply cuts or inability to sustain the viability of other resources increases.

The implementation program includes economic calculations profitability, qualitative indicators fixed assets, the amount of depreciation of equipment and other figures.

Justification of the premises

Places (place) of concentration production capacity as a minimum, they should correspond to the specialization of the organization in the chosen direction. Along with the choice of equipment and technologies, the space used will be of particular importance. Buildings suitable for functionality (idle factories with similar characteristics) can be selected as a business location, or a project for the construction of a new factory can be drawn up.

This should include calculations for vaults, boxes and other types of rooms that will be used in entrepreneurial activity. As part of the documentation, it is also worth considering the existing engineering networks and their suitability or the arrangement of new communications.

Transport selection

Sample business plans often contain calculations for the delivery of supplies or the delivery of finished products. The fleet is not always profitable for the maintenance of a non-core company. Auxiliary vehicles of universal application can play an important role in the development of business in production. Used cars (like a gazelle) are great for meeting current business needs. Own car will save on the services of carriers at least for the first time.

The organizational plan of a business associated with large volumes of production will require the purchase of a fleet of vehicles. This may be a special technique or a shipment order. In the early stages of development, there is the possibility of attracting private carriers, for example, for one-time shipments. Attracting services on such conditions will save about 30-40 percent of the budget on transportation.

Human resources and recruitment

Before defining the main technological processes, it is important to plan personnel reserves. In the harsh realities of business, leaders of young enterprises often resort to outsourcing services. This method of recruitment allows you to optimize the financial burden on the budget and adjust the development strategy until permanently working professionals are found for full-time positions. Outsourcing is one of the ready-made examples of acquisition, when an enterprise receives uninterrupted resources on contractual terms.

In the case of the recruitment of workers, it will be necessary to provide time and costs for training in the overall production plan. Depending on the direction of the company's activities, it will be necessary to draw up a horizon for reaching the required percentage of qualified specialists (critical for self-regulatory organizations and enterprises implementing a quality management system).

Environmental Safety

For a modern enterprise, environmental safety is not just a careful attitude to nature. Today it is a whole complex of measures for the organization of storage, use of processing of raw materials with subsequent categorization. By definition, the concept of environmental safety includes research in the field of environmental impact. Without obtaining special conclusions from supervisory authorities, it will not even be possible to start production. The plan includes the position of an engineer for technosphere safety, the cost of one-time services of environmental agencies, various contributions and fees.

Cost Forecast

When developing a production layout, it is extremely important to predict the costs of the enterprise. It is unlikely that the administration will get something for free. Equipment, machines, vehicles and other facilities can be purchased at the expense of investors or rented on the terms of the owner. Wages cannot be delayed, so wages will also be included in the cost items. You will need to plan for both overhead and unforeseen expenses. To keep things from looking gloomy, a revenue forecast is included in the draft production plan. The difference between the planned indicators will be the cost forecast.

In anticipation of the launch of the business, leaders have a titanic work. In the course of cooperation with capital owners, it will be necessary to report not only at the stage of obtaining investments, but also during the development of directions. Therefore, the attitude of the co-founders directly depends on the quality of the business plan, especially since financing can be arranged in tranches.

The production plan is an integral part of any business plan, which should describe all the production or other work processes of the company. Here it is necessary to consider all issues related to industrial premises, their location, equipment and personnel, as well as to pay attention to the planned involvement of subcontractors. It should be briefly explained how the system for the release of goods (provision of services) is organized and how control over production processes. It is also necessary to pay attention to the location of production facilities and the placement of tools, equipment and workplaces. This section should indicate delivery times and list the main suppliers; describes how quickly a firm can increase or decrease the output of goods or services. An important element of the production plan is also a description of the company's requirements for quality control at all stages of the production process.

The main task of this section of the business plan is to determine and justify the choice of a particular production process and equipment by the company.

It should be noted that industry specialized design companies, which is understandable, since the choice of technology and method of organizing the production process largely determines the effectiveness of any production project.

production system

Any organization has a production system, which receives various inputs (personnel, technology, capital, equipment, materials and information) and in which they are converted into goods or services (Fig. 1).

Rice. 1. Production system

Production planning

Production plans are usually classified by breadth (strategic and operational), time frame (short-term and long-term); nature (general and specific) and method of use (one-time and permanent) (Table 1).

Table 1. Types of production plans

If we talk about long-term strategic planning, then at this level decisions are made in four main areas: capacity utilization (how much a product will be produced or a service will be provided), production capacity location (where a product will be produced or a service will be provided), production process (what production methods and technologies will be used to produce a product or provide a service) and the placement of tools and equipment (how work centers and equipment will be located in enterprises). Having resolved these strategic questions for himself, the developer must also draw up and include in the production plan of his business plan the following three documents: a general (aggregate) plan (what is the general production plan for all types of goods or services offered by the company), the main work schedule (how many units of each type of product or service will have to be produced or provided by the firm for certain period time) and a plan for the company's need for material resources (what materials and in what quantity the company will need to complete the main work schedule). These plans are called tactical.

Capacity utilization planning

Assume that ABC decides to produce lawn mowers. Through a comprehensive marketing research and market analysis, it determines that middle-class instruments are in the greatest demand among consumers. So the firm knows what it should produce. Next, she needs to determine in what quantity to produce the goods, i.e. how many lawnmowers of the selected model should be produced in a certain period of time. It is from this decision that other issues related to planning the utilization of production capacities will depend.

Capacity utilization planning is based on forecasts of future demand, which are translated into production volume requirements. For example, if ABV will produce lawn mowers of only one specific model, it plans to sell them for an average of 3,000 rubles. per piece and assumes that during the first year it will be able to achieve a sales volume of 3 million rubles, which means that it will need production facilities to produce 1000 mowers per year (3000 x 1000 = 3,000,000 rubles). This is how the physical requirements for loading production capacities are determined. It is clear that if ABV produces several models of lawn mowers and some other equipment, then in this case the calculations will be more complicated.

If the company has been around for a long time, then the commercial forecast of future demand is compared with its actual production capacity, which allows you to determine whether it will need additional capacity for such demand. It should be noted that capacity utilization planning is an activity that not only manufacturing firms, but also service companies are engaged in. Yes, administrators educational institutions similarly determine the number of places needed to support the educational process for the projected number of students, and network managers fast food How many hamburgers do they need to cook during rush hour.

Once the business forecast data for future demand has been translated into capacity utilization requirements, the company then proceeds to develop other plans to meet those specific requirements. However, both the firm and the persons to whom it presents its business plan should remember that plans for the utilization of production capacities can subsequently change - both upwards and downwards. In the long run, these indicators change quite significantly, because the firm acquires new equipment or sells its existing production facilities, but in short term modifications should not be significant. The company can introduce an additional work shift, change the volume overtime work, reduce the duration of certain work shifts, temporarily suspend production or invite third parties as subcontractors to perform certain operations. In addition, if the company's product can be stored for a long time, and especially if it is seasonal (as, for example, lawn mowers from ABC), it can create additional stock during periods of downturn in demand and sell them during periods of peak sales, i.e. at a time when its existing production capacity is not able to fully satisfy the demand for its goods.

Production capacity planning

If the firm plans to expand its production capacity in the future, in the section of the business plan we are describing, it should indicate what buildings and structures it will need to ensure a normal workflow. This activity is called capacity planning. The location of buildings and structures of any company, first of all, is determined by what factors most affect its overall production and distribution costs. These are factors such as the availability of qualified personnel, labor costs, the cost of electricity, the proximity of suppliers and consumers, etc. It should be noted that the importance and significance of these factors tend to vary depending on the business in which the company operates.

For example, many high-tech firms (which primarily need a large number of qualified technical specialists to function normally) are concentrated in major cities, where there are universities and large research centers. On the other hand, many labour-intensive companies locate their manufacturing facilities overseas, usually in countries with low wages. For example, many software companies are actively setting up R&D centers in India, which Lately is famous for its specialists in this field, able to work with the same high productivity as their American and European counterparts, but at a much lower cost. American manufacturers car tires traditionally build their plants in northern Ohio, which allows them to operate in close proximity to their main customers - the giant automakers in Detroit. In the case of service firms, customer convenience is usually the deciding factor, with the result that most large shopping centers located on major highways, and cafes and restaurants - on busy city streets.

What factors will be the most important for the company ABV from our example? Clearly, it will need skilled technicians who can design and build lawnmowers. In this case, the location of consumers also plays a no less important role, which means that it is best for it to locate its enterprises near large agricultural centers. After choosing a region, the firm will need to select a specific location and land.

Production process planning

During the planning of the production process, the company determines how its product or service will be produced. When drawing up a production process plan for inclusion in its business plan, a firm must carefully analyze and evaluate its existing production methods and technologies and select those that will most effectively contribute to achieving its specific production goals. When choosing any production process, both in the production and in the service sector, there are various options. For example, starting your journey in restaurant business, the company can choose between a quick service business; a fast food restaurant with a limited menu; an enterprise specializing in the delivery of ready-made meals or in servicing motorists; she can opt for a deluxe restaurant offering gourmet cuisine, and so on. When planning its production process, a firm must answer a number of key questions that will determine its final choice. What technology will it use: standard or personalized? To what extent will its production process be automated? What is more important for the company: efficiency or flexibility of the production system?

So, for example, ABC may well choose such a common and effective way of organizing the production process as assembly line, especially if it does not plan to produce lawn mowers for special customer orders. But if a company is going to produce personalized products tailored to the specific wishes of consumers - which, admittedly, is becoming more and more common in both manufacturing and service industries - then it will, of course, need completely different technologies and production methods.

It should be noted that the planning of the production process is an extremely important and complex task. It is very difficult to determine the optimal combination of such indicators as the level of costs, quality, labor efficiency, etc., since there is a close relationship between them. This means that even a slight change in one component of the production process usually entails a number of changes in its other components. It is precisely because of this complexity that the task of planning production processes, as a rule, is assigned to highly qualified specialists in production area whose activities are directly controlled by the top management of the company.

Equipment placement planning

Last strategic decision when drawing up the production section of a business plan, it is an assessment and selection of the optimal placement of equipment, tools and work centers. This procedure is called equipment placement planning. The goal here is to physically locate equipment, tools, work centers and locations in a way that maximizes the efficiency of the manufacturing process while also making it easy for staff—and often customers—to use them.

Planning for equipment placement begins with an assessment of the physical space required for this. At this stage, the firm must determine which production areas, rooms for storing tools and equipment, warehouses, workshops, rest rooms for workers, offices, etc. she will need to ensure the normal production process. Then, based on the production plans it already has, the company can evaluate the various options for configuring and placing equipment in terms of its production efficiency. In this case, a variety of methods and tools help firms to develop a solution - from elementary scaled plans and maps to complex computer programs that allow you to process huge volumes of variables and print different options for layouts of machines, tools and other equipment.

There are three main approaches to the physical organization of the production process. In the scheme of the production process, all elements (work centers, equipment, departments) are arranged in production areas based on the similarity of the functions they perform. The second way to place equipment and jobs is a linear (or in-line) layout of equipment placement. In this case, the components of the production process are distributed in space in accordance with the successive stages of the production of goods. The third approach is the layout, due to the fixed position of the product. It is used in cases where, due to its impressive size or for some other reason, the manufactured product must remain in one place, in a fixed position throughout the entire production process, and materials, tools, equipment and personnel are delivered to it. Hangars in aircraft construction or shipyards in shipbuilding can serve as examples of such a layout.

Drawing up a general (aggregate) plan

Having decided on strategic issues, the company proceeds to make tactical decisions and, above all, to the general, aggregate planning of its production activities and the production resources necessary for it. The result of this process is a document known as a general (aggregate) plan, which is drawn up for a certain period of time - usually for one year.

General (aggregate) planning allows the company to include in the business plan, as they say, the big picture. When drawing up a general (aggregate) plan, based on forecasts of future commercial demand and capacity utilization planning, the firm determines the levels of stocks, production rates and the number of personnel (per month) that it will need over the next year. It should be remembered that the main focus here is on the general concept of production, and not on specific details. Thus, in the course of aggregate planning, whole categories of goods are considered, and not their individual types. For example, in the general plan of a company specializing in the production of paints and varnishes, it will indicate how many liters of facade paint it will need to produce in a certain period, but it will not specify what colors and in what packaging it will be released. Such plans are especially important for large manufacturing enterprises that produce a wide range of goods. In a small firm with a single product (like ABC in our example), the overall plan will be more like a master schedule, except for a longer period (more on this in the next section). Thus, we can say that a correctly drawn up general (aggregate) plan reflects two main indicators of the company's activity: the optimal production rate and the total number of personnel that the company will need in each specific period within the framework of this plan.

Preparation of the main work schedule

The main work schedule is compiled on the basis of the general (aggregate) plan described above. It can be said that it is more detailed version aggregate plan. The main graph indicates the quantity and type of each type of product manufactured by the company; how, when and where they will be made the next day, next week, next month; it also includes information about the required labor force and the needs of the company in inventory (ie, the totality of all stocks of the enterprise, including stocks of raw materials and materials, components and semi-finished products, work in progress and finished goods).

First of all, the main work schedule is drawn up in order to disaggregate the general (aggregate) plan, i.e. break it down into separate, detailed operating plans for each product or service the company offers. Subsequently, all these separate plans are combined into a common master schedule.

Material requirements planning

Having determined what types of goods or services it will produce or provide, the company must analyze each of them and determine as accurately as possible its needs for raw materials, materials, components, etc. Material requirements planning is an advanced planning concept that includes modeling elements and the ability to create different scenarios for the development of events depending on the situation. Using this concept, a firm can accurately chart its future material requirements for the production of its final products, expressed in specific numbers. Thanks to the advent of the most sophisticated computer programs, modern managers have been able to analyze in detail all the specifications and specifications of their goods and services, as well as to accurately determine all materials, raw materials and components necessary for their production or provision. This critical information, combined with computerized inventory data, allows managers to determine how much of each part is in stock and therefore calculate how long the firm is in inventory. After the company has decided on the lead time (i.e., the time between the confirmation of the order for materials and the receipt of these materials) and the requirements for buffer (reserve) stocks (we will talk about them later), all these data are entered into the computer, and they become the basis for providing the firm with the material resources it needs. Thus, thanks to the material requirements planning system, the company has fairly reliable guarantees that all the materials it needs will be available and in the right quantity when they are needed in the production process.

The latest MRP software is truly powerful when it comes to planning production operations and scheduling work. Thanks to him, managers, when making decisions about the allocation of company resources, can take into account various limiting and situational factors, such as equipment downtime, lack of labor resources, bottlenecks in the production process, shortage of important raw materials, etc.

Production planning tools

Next, we look at production planning tools that can help a firm significantly increase the efficiency of this process and present a really clear and full plan their future production activities.

If you observe the work of lower-level managers for several days, you can be sure that they are constantly discussing what work needs to be done by their subordinates, in what order, who exactly and what operations will be performed, and by what time this or that work should be completed. . All this activity is united under one common name - time-based (calendar) planning. Below, we will look at the three main tools that managers use in this process: the Gantt chart, the load distribution chart, and the PERT network analysis.

Gantt Chart

This tool - the Gantt chart - was created in the early 1900s by Henry Gantt, an associate of the famous theorist and practitioner in the field of scientific management Frederick Taylor. In fact, the Gantt chart is a histogram on which time periods are plotted horizontally, and all types of work activities for which, in fact, a schedule is drawn up vertically. The columns display the planned and actual results of the production process for a certain period of time. Thus, the Gantt chart clearly displays which production tasks should be performed and when, and allows you to compare the planned result with the actual performance of the work. This is a fairly simple, yet handy and useful tool that allows managers to determine fairly precisely what still needs to be done to complete a particular work order or project, and assess whether it is being done ahead of schedule, on schedule, or behind schedule. In the latter case, they should take steps to correct the situation.

Load distribution scheme

The load distribution scheme is nothing more than a slightly modified Gantt chart. Unlike the Gantt chart, it does not indicate the types of work vertically, but departments or specific organizational resources. Thanks to this tool, firms can more effectively plan and control the use of the organization's production capacity.

PERT network analysis

However, it should be noted that the Gantt chart and the load distribution scheme are convenient if it is necessary to control the execution of a relatively small number of different types of work, and not interconnected. If a firm needs to plan a large-scale project - for example, aimed at a complete reorganization of one of its divisions, to reduce costs, or to develop a new type of product or service - then it will need to coordinate the actions of employees of various departments and services. Sometimes, when implementing such projects, hundreds and even thousands of types of work have to be coordinated, many of which must be carried out simultaneously, and others can only be started after the previous ones are completed. It is clear, for example, that during the construction of a building it is impossible to lay a roof without erecting walls. In such situations, managers use another tool known as PERT (Program Evaluation and Review Technique) network analysis.

Network analysis PERT is a diagram that shows the sequence of all the work that must be performed within the project, as well as the time and cost of each of them. This method was developed in the late 1950s to coordinate the construction of the Polaris submarine, a project that involved more than three thousand different contractors. Through PERT network analysis, the project manager can determine what exactly needs to be done within the project and which events will depend on each other, as well as identify potential project problems. In addition, with the help of PERT, he can easily compare how one or another alternative action can affect the schedule of work and the cost of the project. As a result, thanks to the PERT network analysis, the manager, if necessary, can redistribute the resources available to his company, thereby preventing the project from deviating from the planned schedule.

In order to build a PERT network graph, you need to know and understand four important concepts: events, activities, decline period, and critical path. Events are endpoints that separate major activities from each other and indicate the completion of one and the beginning of the next. Activities are the time or resources required to move from one event to another. The recession period is the period of time during which the execution separate species work can be slowed down, and this will not lead to a slowdown in the implementation of the entire project. The critical path is the longest or most time-consuming sequence of events and activities in the PERT network. Any delay in the completion of events on the critical path will invariably delay the completion of the project as a whole. In other words, activities on the critical path have a zero decay period.

In order to draw up a PERT network diagram, a manager needs to identify all the major activities needed to complete the upcoming project, arrange them in order of completion, and estimate how much time it will take to complete each of them. This process can be represented in five steps.

1. Identify all significant activities to be performed to complete this project. During the execution of each of these types of work, certain events occur or certain results are achieved.

2. Determine the order of events that occurred in the previous stage.

3. Draw a diagram of the flow of work types from start to finish, identifying each type of work separately and its relationship with other types of work. Events in the diagram are indicated by circles, and activities by arrows; the result is a clear block diagram, which is called a PERT network (Fig. 2).

4. Estimate the time required to complete each type of work. This operation is performed through the use of the so-called weighted average. To obtain this indicator, an optimistic estimate of time, t 0 , is taken, i.e. an estimate of the duration of the performance of a particular type of work in ideal conditions; the most probable time estimate, t m ​​, i.e. an estimate of the duration of this type of work when normal conditions; and a pessimistic time estimate, t p , i. e. an estimate of the duration of the work in the worst possible conditions. As a result, we have the following formula for calculating the expected time t e:

5.

6. Using a network diagram that estimates the completion time for each type of work within the project, plan the start and end dates for each type of work and the project as a whole.

Rice. 2. PERT network diagram example

As we said above, a tool such as PERT network analysis is usually used to plan very complex projects consisting of hundreds or even thousands of events. Therefore, the calculations in this case are performed using computer technology using special software.

Production planning methods

Modern managers have to solve a very difficult task - to plan the activities of their organizations in a complex and extremely dynamic environment. external environment. For its solution, well-established: project management and scenario-based planning. Both methods have one primary goal - to increase the flexibility of the company, without which it is impossible to succeed in today's ever-changing business world.

Project Management

Today, many manufacturing firms work on a project basis. A project is a series of interrelated activities that has clear start and end points. Projects vary in importance and scope; it could be like a startup project spaceship and the organization of a sporting event at the local level. Why are companies increasingly organizing and planning their activities around projects? The fact is that this approach is best suited to a dynamic external environment that requires modern organizations to have increased flexibility and the ability to quickly respond to any changes in the situation. Modern firms implement unusual and even truly unique production projects related to solving a huge number of complex interrelated tasks, the implementation of which requires specific skills and qualifications. All this absolutely does not fit into the standard production planning procedures that a company can use in its routine, daily activities. What are the features of project planning?

Project planning process

During a typical project, work is carried out by a dedicated project team whose members are assigned to work on the project on a temporary basis. All of them report to the project manager, who coordinates their work in cooperation with other departments and divisions. However, since any project is a temporary event, the project team exists only until such time as it completes its tasks. The group is then disbanded, and its members are transferred to work on other projects, or they return to the departments where they work full-time, or leave the company.

The planning process of any project, including production, includes a number of stages. It starts with a clear definition of the goals of the project. This stage is mandatory, because the manager and team members must clearly know what they need to achieve by the time the project is completed. Then it is necessary to determine all types of work to be performed within the framework of the project, and the resources required for this. In other words, at this stage it is necessary to answer the following question: what labor and material costs will be required to implement this project? This stage is often associated with certain difficulties and requires considerable time, especially if the project is fundamentally new or even unique, i.e. when the company has no experience in implementing projects of this type.

After determining the types of work, it is necessary to determine the sequence of their implementation and the relationship between them. What needs to be done first? What jobs can be done at the same time? In this case, the production project planner can use any of the production planning tools described earlier: create a Gantt chart, a distribution schedule workload or a PERT network diagram.

Then a project implementation schedule should be drawn up. The first step is to preliminarily estimate the deadline for each work, and on the basis of this estimate, a general project schedule is drawn up and the exact date of its completion is determined. After that, the project schedule is compared with the previously set goals and the necessary changes and adjustments are made. If it turns out that the project timeline is too long—which does not meet the company's goals for the project—the manager can allocate additional resources to the most important species work to speed up the implementation of the entire project.

With the advent of many kinds of computer programs running on the Internet, the procedure for planning and managing production projects has been greatly simplified. It should also be noted that often suppliers of the company and even its consumers take an active part in this activity.

Scenario planning

A scenario is a forecast of the probable future development of events, which is characterized by a certain sequence of these events. In this case, it is estimated how this or that development of events will affect the environment in which the company operates, the company itself, the actions of its competitors, etc. Different assumptions can lead to different conclusions. The purpose of such an analysis is not to try to predict the future, but to clarify the situation as much as possible and make it as definite as possible, “losing” the possible scenarios for the development of events, taking into account different baseline. Even the scripting process itself forces company leaders to rethink and better understand the nature of the business environment, because in the course of this activity they consider it from a perspective that they might never have.

Although scenario planning is a very useful way of predicting future events (which can be predicted in principle), it is clear that it is very difficult to predict random, arbitrary events. For example, hardly anyone could have predicted such a rapid spread and incredible popularity of the Internet in recent decades. Similar events will undoubtedly occur in the future. And although it is extremely difficult to predict them and correctly respond to them, managers need to strive to somehow protect their organizations from their consequences. This goal is served by scenario planning, including in the manufacturing sector.

Production control

An important element of the production plan in any business plan is a description of how the firm intends to exercise control over its production system, in particular over its elements such as costs, purchases, Maintenance and quality.

Cost control

It is believed that American managers often treat cost control as a kind of corporate " crusade which is undertaken and conducted from time to time under the guidance of the firm's accounting department. It is the accountants who set the cost per unit of output, and managers must find an explanation for any deviation. Have the company's costs increased? Perhaps the labor force is not being used effectively enough? Perhaps, in order to reduce the amount of marriage and waste, it is necessary to improve the skills of workers? However, most specialists are now convinced that cost control should play a major role already at the stage of developing and planning the organization's production system, and that all managers of the company, without exception, should constantly engage in this activity.

Currently, many organizations are actively using the cost control approach based on the so-called cost centers. These are responsibility centers for which separate cost accounting is maintained, but which are not directly related to making a profit; the effectiveness of the activities of such units is determined based on the correspondence of actual costs to the planned or standard volume.

Since all costs must be controlled at some organizational level, the company needs to clearly define at what level certain costs are controlled, and require company managers to report on those costs that fall within their sphere of competence.

Procurement control

In order to effectively and efficiently produce certain goods and provide services, the company must be constantly provided with all the necessary resources, including materials. She needs to constantly monitor the discipline of deliveries, monitor the characteristics of goods, their quality, quantity, as well as prices offered by suppliers. Effective control over procurement not only ensures that all the resources the company needs in the right amount, but also their proper quality, as well as reliable long-term and mutually beneficial relationships with suppliers. All these points should be reflected in the production section of the business plan.

So what can a company do to make it easier and more efficient to control inputs? Firstly, to collect the most complete and accurate information about the dates and conditions of delivery. Secondly, to collect data on the quality of supplies and how they correspond to the company's production processes. And, thirdly, to obtain data on the prices of suppliers, in particular, on the correspondence of actual prices to the prices that were indicated by them when placing an order.

All of this information is used to rank and identify unreliable suppliers, allowing the firm to select the best partners in the future and monitor various trends. So, suppliers can be evaluated, for example, by the speed of their response to changes in demand, by the quality of service, the level of reliability and competitiveness. We will discuss supplier relationships in more detail in the next section.

Supplier control

Modern manufacturers strive to form strong partnerships with suppliers. Instead of dealing with dozens of sellers who will certainly compete with each other for a customer, manufacturers today often choose two or three suppliers and establish close relationships with them, ultimately increasing both the quality of the products supplied and the effectiveness of this cooperation.

Some firms send their design engineers and other specialists to their suppliers to solve all sorts of technical problems; others regularly dispatch teams of inspectors to supplier sites to evaluate various aspects of their operations, including supply methods, manufacturing processes, statistical controls that suppliers use to identify defects and their causes, and so on. In other words, today companies in all countries are doing what they have traditionally always done in Japan - they seek to establish long-term relationships with their suppliers. Suppliers partnering with a manufacturing company are able to provide higher quality inputs and reduce reject rates and costs. If there are any problems with suppliers, open and direct communication channels allow them to be resolved quickly and efficiently.

Inventory control

In order to effectively and efficiently achieve its goals, any company must control the replenishment of its inventory. To do this, a reorder system is used when a certain stock level is reached.

This type of reordering system is used to minimize the ongoing cost of inventory and to provide a good level of customer service (because it reduces the chance that the right item will be out of stock at some point).

Using various statistical procedures, companies typically set the reorder point at a level that guarantees sufficient inventory to last between the reorder and fulfillment. At the same time, they usually retain some additional “safety net” reserve, which allows them to avoid the complete depletion of the reserve in unforeseen circumstances. This so-called "buffer" or reserve provides the company with reliable protection if there is a greater than usual demand for a product or material between the reorder and its fulfillment, or if replenishment of the stock is delayed for unforeseen reasons.

One of the simplest but very effective ways to use the reorder system when a certain stock level is reached is to store traceable stock in two different containers. At the same time, goods or materials are taken from one container until it is empty. At this moment, a reorder is made, and before it is completed, the products are taken from the second container. If the company has correctly identified the demand, then the reordered goods will arrive before the second container is empty, and there will be no delay.

The second modern and already very common method of reordering upon reaching a certain level of stock is based on computer control. In this case, all sales are automatically recorded by a central computer that is programmed to initiate a new order procedure when stock reaches a certain critical level. Currently, such systems are actively used by many Retail Stores. Another fairly common system is the reorder system after a certain time interval. In this case, inventory control is carried out solely on the basis of a well-defined time factor.

Maintenance control

The production section of the business plan should also indicate how the firm will monitor the effectiveness of maintenance. In order to provide consumers with goods or services quickly and efficiently, a company must create a production system that guarantees the most efficient use of equipment and its minimum downtime. Therefore, managers, among other things, must constantly monitor the quality of maintenance. The significance and importance of this activity depends to a large extent on the production technologies used by the company. So, for example, even a minor glitch in a standard assembly line can bring down hundreds of workers.

There are three main types of maintenance in manufacturing organizations. Preventive maintenance is carried out before the accident. Restorative repair requires a complete or partial replacement of the mechanism or its repair on the spot immediately after the breakdown. Conditional repairs are overhaul or replacement of parts based on the results of an earlier technical inspection.

It should be noted that the need for maintenance control should be taken into account already at the design stage of the equipment. So, if a failure or downtime of equipment leads to serious problems in the production system or costs the company too much, then it can increase the reliability of mechanisms, machine tools and other tools by adding additional characteristics to the equipment design. In computer systems, for example, redundant, redundant subsystems are often introduced for this purpose. In addition, equipment may be designed from the outset to make future maintenance easier and cheaper. It should be borne in mind that the fewer components are included in the equipment, the less breakdowns and malfunctions occur. In addition, it is advisable to place parts that often fail in an easily accessible place or even mount them in separate units that can be quickly removed and replaced in the event of a breakdown.

Quality control

Quality control is a comprehensive, customer-focused program aimed at continually improving the quality of a company's manufacturing processes and the products or services it provides. The production section of the business plan should indicate how the firm will implement quality control.

This activity involves constantly monitoring the quality of products so that they consistently meet the established standard. Quality control must be performed several times, starting with the initial entry of inputs into the firm's production system. And this activity should continue throughout the entire production process and end with the control of finished goods or services at the output of the production system. This procedure also provides for quality assessment at intermediate stages of the transformation process; it is clear that the sooner you identify a marriage, or an inefficient, or an extra element of the production process, the lower your costs for correcting the situation will be.

Before performing quality control, managers must ask themselves whether 100% of the goods (or services) produced should be tested, or whether samples can be dispensed with. The first test option is appropriate if the cost of a permanent estimate is very low, or if the consequences of a statistical error are extremely serious (for example, if a firm produces a complex medical equipment). Statistical sampling is cheaper and sometimes the only quality control option that makes economic sense.

Selective control upon acceptance consists in the evaluation of materials or goods purchased or manufactured by the company; it is one of the forms of proactive control or control based on feedback. In this case, a certain sample is taken, after which the decision on whether to accept or reject the entire lot is made based on the results of the analysis of this sample, based on a risk assessment.

Process control is a procedure in which sampling is carried out in the process of converting inputs into goods or services, thereby determining whether the production process itself has gone out of control. At this type control, statistical tests are often used, with the help of which, at different stages of the production process, it is determined how much the deviations have gone beyond the acceptable level of quality. Since no production process can be considered perfect and some minor deviations are simply inevitable, such tests allow the company to identify serious problems in time, i.e. quality issues that companies need to address immediately.

Production control tools

It is obvious that the success of any organization is largely due to its ability to efficiently and effectively produce goods or provide services. This ability can be assessed using a number of production control methods.

Production control, as a rule, consists in monitoring the production activities of an organization or a separate unit in order to ensure its compliance with a previously drawn up schedule. Production control is used to determine the ability of suppliers to ensure the appropriate quality and quantity of deliveries with least cost, as well as to monitor the quality of manufactured products in order to ensure their compliance with established standards and to check the condition of production equipment. We've already discussed the basic aspects of manufacturing operations control, but the two most important manufacturing control tools—the TQM control chart and the economic order quantity model—deserve a closer look.

TQM Control Charts

It should be remembered that effective quality control, which we talked about above, is not only aimed at producing quality products or providing quality services. To ensure the high quality of both the products themselves and the processes by which they are produced, companies must control all aspects of their production system. Modern firms accomplish this task with a tool known as the TQM control chart.

The TQM control chart is an effective production control tool. In essence, it is a graph that indicates the statistically determined upper and lower control limits and displays the results of measurements for the reporting period. Control charts visually show whether the production process has gone beyond the pre-set control limits for it. As long as the results of checks at different stages of the production process are within a certain acceptable range, the system is considered to be under control (Fig. 3). If the measurement results are outside the established limits, then the deviations are considered unacceptable. Continuous quality improvement efforts should narrow the range between the upper and lower control limits over time as they eliminate the most common causes of deviations.

Rice. 3. Example of a control chart

When drawing up such a schedule, it is necessary first of all to take into account that in each production process there can be two sources of deviations. The first of these is unpredictability, due to which corresponding deviations can occur. Such deviations are possible in any process, and it is impossible to control them without fundamental changes in the process itself. Another source is non-random circumstances. Such deviations can be identified, and they are subject to control. It is clear that control charts are used to identify precisely such causes of deviations.

Control plots are based on some basic statistical concepts, including the well-known normal distribution (which states that deviations tend to be distributed in a bell-shaped curve) and standard deviation (a measure of variability in a group of numbers). When drawing up a control chart, the upper and lower limits are determined by the degree of deviation that is considered acceptable. According to the normal distribution, about 68% of the set of values ​​are in the range from +1 to -1 of the standard deviation indicator. (As the sample size increases, the sampling distribution tends to become more and more normal.) With 95% of the values ​​lying between +2 and -2 of the standard deviation. In the process of controlling manufacturing operations, limits are usually set in the range of three standard deviations; this means that 97.5% of the values ​​must lie within the control range (Fig. 4).

Rice. 4. Example of a control plot with a control range of three standard deviations

If the sample mean is outside the control range, i.e. is above its upper limit or below its lower limit, this means that the production process, apparently, is out of control and the company needs to do everything possible to identify the causes of the problem.

Model EOQ

We have already said that control of a firm's inventory is the most important aspect production control. Firms' investment in these reserves is usually significant; therefore, each organization strives to determine as precisely as possible how much to order new goods and materials and how often this should be done. The so-called EOQ model helps them in this.

The Economic Order Quantity (EOQ) model is designed to determine the quantity of items that should be ordered to meet projected demand and minimize the cost of holding and acquiring inventory.

Using the EOQ model, two types of costs are minimized - order fulfillment and operating costs. As the volume of orders increases, the average number of inventories increases, and the current costs of their maintenance grow accordingly. However, placing large orders means fewer orders, and therefore a reduction in the cost of fulfilling them. The lowest total costs and, accordingly, the most economical order size are observed at the bottom of the total cost curve. This point, at which order fulfillment costs and running costs are equal, is called the most economical order size point. To calculate this indicator, the following data is needed: the forecasted need for stocks for a certain future period (D); the cost of placing one order (OS); costs or purchase price (V) and current costs associated with the storage and processing of the entire volume of inventory, in percent (CC). With all this data, you can use the standard EOQ formula:

However, it should be remembered that the use of the EOQ model assumes that the need and lead time of the order are precisely known and constant. Otherwise, it should not be used. So, for example, it is generally not applicable to determining the order volumes of parts used in the production process, since they, as a rule, come from the warehouse in large and uneven lots. But does this mean that the EOQ model is useless for manufacturing firms? Not at all. It can be used to determine the optimal cost and identify the need to change the size of the order lot. Although, it should be recognized that more complex models are used to determine the size of lots in conditions of intermittent needs and in other non-standard situations.

Modern aspects of production

When preparing the production section of a business plan, it is important to keep in mind the modern realities of the production sector. Companies today face many challenges the most difficult tasks associated with performance improvements. They should strive to maximize the benefits of new technologies, implement the described concept of TQM; certify their products by obtaining ISO 9000 certification; constantly reduce inventories; build partnerships with suppliers; achieve a competitive advantage through flexibility and quick response to changes in demand, etc. Therefore, the firm should reflect in its business plan how all these tasks will be performed.

Technologies

Ever-increasing competition in most markets is forcing manufacturers to supply consumers with ever higher quality products at ever lower prices, while significantly reducing their time to market. Two factors contribute to accelerating the process of developing new types of products: the company's focus on shortening the development cycle and the effectiveness of investments in new technologies.

One of the most effective tools by which modern manufacturers reduce the time to bring new products and services to the market is complex automation production (Computer Integrated Manufacturing - CIM). CIM is the result of combining a company's strategic business plan and production plan with computer software. Technology is at its core computer-aided design(Computer-Aided Design - CAD) and automated production (Computer-Aided Manufacturing - CAM). As a result of the emergence and wide distribution of all kinds of automation tools, the old way of developing products is hopelessly outdated. With the help of computer technology, which allows visual display of graphic objects, design engineers design new products much faster and more efficiently than before. Automated production made possible by the use of computers in the management of the production process. So, numerically controlled machines can be programmed to produce new models in just a matter of seconds.

According to experts, further improvement of CIM technology will ensure the continuity of the entire production cycle. If each stage, from placing an order for raw materials to shipping finished products, can be displayed in the form of numerical indicators and processed on a computer, companies will be able to react very quickly to any changes in the market. They can make hundreds of changes to a project in a matter of hours, quickly scale to a wide range of product variations, and produce very small batches. An organization that uses integrated manufacturing automation will not have to stop the assembly line and spend valuable time replacing press dies or other equipment to produce a new standard or non-standard product. One change in the computer program, which takes a few seconds, and the production process is completely rebuilt.

The most important condition effective work of modern companies is the constant updating of technology, with the help of which the input stream of raw materials is converted into a stream finished products. Major technological changes usually involve the automation of production, which we discussed above, as well as the introduction of new equipment, tools or work methods and computerization.

However, by all appearances, the most significant technological change in recent years has been universal computerization. Most organizations today have developed sophisticated Information Systems. For example, in many retail chains scanners connected to computers are used, with the help of which you can instantly get complete information about the product you are interested in (its price, code, etc.). And of course, today you will not find a single office that does not use computer technology.

Implementation of TQM

At present, the TQM philosophy has already been implemented by many companies. idea universal control quality covers not only large, but also small firms and enterprises. TQM (total quality management) is a concept that involves the participation of all company employees in improving the quality of products and services, optimizing production processes and management, etc.

Unfortunately, it must be admitted that not all efforts aimed at implementing the concepts of TQM have been successful. Research in this area does not confirm that firms that have implemented TQM consistently perform better than firms that have not. There are a number of factors that can significantly reduce the effectiveness of TQM. In particular, the researchers found that the success of applying some of the core concepts of TQM - for example, the use of commands, benchmarking, extra education and employee empowerment—depends to a large extent on the current performance of the company.

From a technological perspective, the TQM concept focuses on the development of flexible processes that are designed to support continuous quality improvement. The fact is that employees who have adopted the TQM philosophy are constantly looking for what can be improved or corrected, so work processes should easily adapt to constant changes. In this regard, for the successful implementation of the TQM program, the company must constantly improve the skills of its staff. It needs to provide its employees with the opportunity to acquire and develop skills in areas such as problem solving, decision making, negotiation, statistical analysis and team work. Employees of these companies must be able to analyze and interpret data, and firms should provide their work teams with all the necessary information about the quality of their products, in particular, damage rates, rejects, waste, etc. They must also inform staff about the opinions of consumers, provide them with the information necessary for the preparation of control schedules and work with them. And, of course, the structure of the organization must provide the work teams with sufficient authority to continuously improve manufacturing operations.

Reengineering

Reengineering is a term for a radical change in all or part of the company's work processes in order to increase productivity and improve financial performance. In the process of reengineering, the structure, technologies and personnel of the company undergo major changes, since in this case the methods of doing work in the organization are revised almost from scratch. During reengineering, managers constantly ask questions: “How else can this process be improved?” or “What is the best way to complete this work task faster and better?” etc.

Regardless of what caused the need for change - fluctuations in demand, change economic situation or a change in the strategic direction of the organization - the person who decided to reengineer should first of all evaluate the effectiveness of the work of the personnel and the quality of the interaction of people within the organization. After a critical assessment of work processes, the company begins to look for ways to improve labor productivity and product quality: start implementing a TQM program, change organizational culture or implement other changes. However, in any case, the essence of reengineering is that the company completely abandons the old ways of working and decides to radically change its workflow.

You may be wondering: Isn't the term "reengineering" synonymous with TQM? In no case! Although both of these processes are aimed at introducing changes in the organization, their goals and means are completely different. The TQM program is based on the idea of ​​continuous, incremental change. This means continual improvement in the performance of an organization that is generally doing well. In addition, TQM is implemented from the bottom up, and the main emphasis is on the participation of workers in decision-making regarding the planning and implementation of this program. And reengineering is a radical change in the way an organization operates. This process involves fundamental changes and a complete restructuring of working methods. Reengineering activities are initiated by the top management of the firm, but when this process is completed, almost all employees are usually given greater authority in their workplaces.

A characteristic feature of reengineering is that you have to start from scratch and rethink and rebuild the entire scheme of work, i.e. structure of all work processes. Traditional, well-known ways and methods are immediately excluded. In other words, the company completely abandons the gradual transformation of the production system, as the ways and methods by which the company will produce goods or provide services are radically changed. Completely new workflows and operations are being invented and implemented. In reengineering, what was before should by no means even serve as a starting point, because reengineering is a radical, fundamental change in the very foundations of an organization. Despite the significant stress and increasing uncertainty of the staff, which usually accompany the process of reengineering, it is capable of producing excellent results.

ISO standards

In order to openly and clearly demonstrate their commitment to quality improvement, modern organizations are trying to achieve ISO certification. What is its essence? These are quality management standards that companies around the world are guided by. They cover literally everything: from the rules for drawing up a contract to the development of products and their supply. ISO standards established international organization on standardization and are used as an international evaluation criterion for comparing firms operating in the global market. The fact that the company has a certificate indicates that it has developed and implemented an effective quality management system.

Quality certificates today receive small marketing and consulting companies, software firms, city utilities, and even some financial and educational institutions.

However, it should be remembered that although the certificate provides the company with a lot of advantages and significantly strengthens its competitive position, the main goal of the company should be the process of improving the quality of its products or services. In other words, obtaining a certificate should not be an end in itself; to achieve this, a company must create work processes and a production system that will enable all its employees to perform their work with consistently high quality.

Inventory reduction

As we have said, a very significant part of the assets of most companies is its inventories. Firms that manage to substantially reduce their inventory levels—i.e. raw materials, semi-finished products and finished goods in stock, can significantly reduce the cost of their storage and thus increase their productivity. How the firm intends to solve this problem should also be reflected in the production section of the business plan.

Modern companies take this problem very seriously. In recent years, managers in all countries have been actively looking for ways to improve the efficiency of inventory management. Thus, at the input stage, they seek to improve the informative link between internal production schedules and projected customer demand. Increasingly, marketing managers are required to have accurate and up-to-date information about future sales volumes, which is then combined with specific data about the company's production systems and as a result determines the optimal production volume that can satisfy existing demand. Production resource planning systems are the best fit for this function.

Today, companies around the world are actively experimenting with another technique that has been successfully used in Japan for a long time and is called the Just-In-Time (JIT) system. Under this system, goods and materials are delivered to the manufacturer at the exact moment they are needed in the production process, rather than stored in a warehouse. Final goal implementation of the JIT system - completely get rid of raw material warehouses due to the most precise coordination of the production process and the supply process. If such a system works effectively, it provides the manufacturer with significant benefits: reduced inventory, reduced equipment setup time, accelerated product conversion cycles, reduced production time, freed up production space, and often even improved product quality. Of course, in order to achieve all this, it is necessary to find suppliers who will supply quality materials on time.

However, it should be borne in mind that not every manufacturer can use the JIT system. So, for its implementation, it is necessary that suppliers are located close to the enterprises of the buyer and supply materials without defects. This system also requires reliable transport links between suppliers and manufacturer, effective methods acceptance, processing and distribution of materials, careful planning of the production process. If all these conditions are met, JIT will help to significantly reduce the company's warehouse costs.

Outsourcing and other types of partnerships with suppliers

The manufacturing section of the business plan should also indicate how the company intends to work with suppliers and improve the efficiency of this process. As already mentioned, one of the most important areas in the manufacturing sector in recent years has been a steady trend towards the formation of partnerships between manufacturers and suppliers. It should be noted that, among other things, this often involves the transfer of work, when manufacturers, in an effort to reduce high labor costs, transfer the production process of some parts and components to their suppliers, who can manufacture them at a lower cost. This relationship is called outsourcing.

Today, alliances between manufacturers and suppliers have become much closer and stronger. Suppliers are increasingly involved in the manufacturing process of a product manufacturer. Many operations that used to be exclusively the responsibility of manufacturers are now performed by their main suppliers, i.e. there is a transfer of part of the work to third-party performers. At the same time, manufacturers increasingly play the role of "conductors" and limit themselves to only coordinating the activities of different suppliers. According to experts, the trend towards strong and close partnerships between suppliers and manufacturers will continue in the future, as the latter are constantly looking for new sources of competitive advantage in the global market, and one of these sources is close relationships with suppliers.

Flexibility as a competitive advantage

In today's rapidly changing business world, companies that are unable to quickly adapt to change are doomed to failure. Since this ability is provided by the flexibility of the production process, many organizations are actively developing and implementing flexible production systems.

Modern factories and factories often resemble scenes from a science fiction movie in which remote-controlled carts transport workpieces to computerized machining centers. Robots automatically change the position of workpieces, and the machine, manipulating hundreds of tools, turns the workpiece into a finished part. Every minute and a half, a finished product leaves the assembly line, somewhat different from the previous ones. There are no workers or conventional machines in the shop. No costly downtime required to change dies or tooling. One modern machine is capable of producing dozens and even hundreds of very different parts, making them in any programmed order.

A unique feature of agile manufacturing systems is the integration of computer-aided design, engineering and production processes, enabling factories to produce small, custom batches at prices previously only possible with mass production.

As a result of the use of flexible manufacturing systems, economies of scale are being replaced by economies of breadth. Organizations no longer need to produce thousands of identical products to keep their unit costs down. To move on to the release of a new product, they need not change the machines and equipment, but only make changes to the computer program.

Speed ​​as a competitive advantage

It is known that a company that is able to quickly develop and bring new products and services to the market provides itself with significant competitive advantage. Consumers prefer a particular firm not only because its products or services are cheaper, have original design or are of high quality, but often because they appreciate the opportunity to get them as quickly as possible. There are many examples of companies that have achieved significant success in reducing the time it takes to design and produce goods and services. To speed up the production process and increase the pressure on competitors, many organizations around the world are seeking to reduce bureaucratic restrictions and simplify their organizational structures; they create complex working groups, restructure the sales structure, use JIT methods, CIM systems, flexible manufacturing systems, etc. And all this needs to be reflected in the production plan, indicating what opportunities you have at your disposal to accelerate the cycle of bringing new products or services to the market.

* Calculations use average data for Russia

Step 7: preparation of the business plan section "Production plan"

If you open manufacturing enterprise, your business plan should have an additional chapter describing the production process of the product.
the main objective this section of the business plan is to prove to a potential investor that you can ensure the production of the planned volumes of high quality products and on time.

Description of the technological process

First of all, answer the question whether your enterprise is already operating or is just being created. This is what interests your investors and partners in the first place.

Often, the production plan is drawn up on the basis of the marketing plan for the products. In this section, write about how you plan to produce your product and consider all the steps involved in creating a product or service. It is best to put it in the form calendar plan, which will include a forecast of the timing of activities and the amount of funding required for their implementation.

Describe in detail all the nuances of the technological process (preferably with visual diagrams) from the moment of purchasing raw materials and materials to the sale of finished products to wholesalers.

Think about how you can improve the process and what is required for this. The composition and structure of production capacities can not be considered in great detail.

If this information is of particular importance (for example, for large manufacturing companies), it can be specified in the appendix to the business plan.

But the issues of supplying raw materials, materials and components deserve more attention, since the stability of the technological process largely depends on them. Write what material values(land, buildings, production facilities), stocks of raw materials and materials, what equipment and components your company has now and how deliveries will be made in the future.

Ready-made ideas for your business

If the raw material you are using requires special conditions transportation and storage, write about how these conditions will be observed. Consider how the quality and timeliness of deliveries will be controlled, because the profit and reputation of your company depend on it.

Evaluate productivity metrics, which are measured by the amount of time and human resources needed to produce a good or service. This indicator also directly affects the amount of profit, which is of particular interest to investors.

Describe what equipment is required to produce the product. If at the time of writing the business plan the enterprise does not have all necessary equipment, specify what you need to purchase it and how long it will take to purchase, install, debug and run it from the moment you receive the required funding.

Consider in detail the requirements for quality control at all stages of production, indicate the standards that you will be guided by.

Pay attention to energy supply issues: list the requirements for energy sources, analyze their availability and think over alternatives during interruptions in the operation of the main energy sources.

For example:

In the production process of our products, we plan to use _____. Our main supplier of raw materials is ______. In the event that this supplier fails to fulfill its obligations, we will use the services of another company _____. Components will be shipped ____.

Our production line will use equipment manufactured by ____. According to the contract, this manufacturing company will provide technical support, which will increase the efficiency of operations by ___%. Thanks to the use of new equipment, we will be able to reduce production costs by ___%.

In the production process, a patented technology will be used, which allows to further reduce the cost of one unit of production to ___ rubles.

____ is required for the purchase and maintenance of equipment. The owners of the enterprise plan to invest ____ of their own funds.

Qualification requirements and availability of necessary personnel

In the second part of the production plan, describe the staffing of the enterprise. Pay special attention to administrative, engineering and production personnel. Describe structure and composition of units, working conditions, remuneration and incentives. Consider staff development and training (if applicable).

If over time you plan to make changes in the structure of the company's personnel (as a rule, this is an increase in staff), then be sure to mention this in the production plan: give forecasts for the company's development for the next 2-3 years and write what specialists you will need in this regard in future.

For example:

The company currently employs ___ people. The company has the following subdivisions/departments/work groups: ____. Administration includes ____. Their responsibilities include managing the enterprise, developing an overall strategy, ____. The production staff includes ____. They are responsible for ____.

When setting salaries, we will use the company's job classification/follow industry standards/strive to be ___% above the regional average. The system of allowances and benefits will include bonuses, additional medical insurance, assistance in obtaining education and advanced training.

In connection with the expansion of the scope of the enterprise over the next 3 years, it is planned to hire ___ employees working on a part-time / freelance basis by this time.

Return to the list of instructions for writing a business plan

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The production plan is the established rules for the production of products or for the provision of services. They are necessary to ensure the stable operation of the company.

What is a production plan

The production plan (PP) refers to the administrative activities of the company. It includes various management decisions concerning the number of employees, the volume of raw materials used. The PP includes the following components:

• Work to be outsourced to a subcontractor.
• The optimal amount of purchased raw materials.
• Quality control of goods and services.
• unit cost of production.
• Usage .
• Analysis of existing premises, owned or leased, determination of the need for new space.
• Analysis of the staff: number, qualifications, salary.
• Marginal profit.

The exact structure of the production plan is determined based on the characteristics of a particular company.

What is a production plan for?

The main function of PP is to achieve the goals set by the enterprise. Consider all the tasks that the production plan allows you to solve:

• Attracting new customers, increasing the loyalty of representatives of the existing customer base.
• Full use of all available resources to meet the needs of consumers, reduce costs.
• Production of competitive goods, introduction of technological innovations.
• Improving the quality of products and services.
• Purchase of the optimal amount of raw materials good quality at low prices.
• Creation of a reserve of resources in case of an increase in demand.
• Activities within the established budget.
• Decreased company loans.
• Reporting standardization.
• Detailing of available costs.
• Creating a strategy that will be relevant even in unplanned situations.

A production plan is a must in large companies.

Principles used in planning

When compiling the PP, it is necessary to be guided by such principles as:

• Continuity of planning: the plan is relevant throughout the entire production period.
• The plan is required in the execution of any of the forms of the company's activities.
• The principle of unity: PP must be systematic, taking into account the relationship between labor processes.
• The principle of economy: PP should be such as to obtain maximum results at minimum cost.
• PP must be flexible. That is, it can be changed if circumstances so require.
• The accuracy of the plan should be sufficient to achieve the goals set.
• Within the framework of the PP, all branches of the company are interconnected.

When drawing up a plan, you must also remember the principle of focusing on results.

How is a general document for a PP compiled?

As a rule, the production plan is drawn up for a year. It contains general production specifications. The basis for drawing up are forecasts regarding future demand for products, as well as a production load plan. When compiling the document, production rates, reserves, and the number of employees are calculated. When compiling the PP, it is necessary to form a general concept of the company's activities. For example, the document takes into account all, not individual product categories. There is no need to dwell on particulars.

General production plan required large enterprises who manufacture a wide range of products. small company it will be enough to draw up a PP in the form of a work schedule.

IMPORTANT! The PP should reflect the key aspects of the enterprise's activities: the total number of employees, the established production standards.

The composition of the production plan

Consider the structure of the production plan:

1. Title page.
2. Content.
3. Basic information about the company.
4. Basic information about your products or services.
5. Organizational plan.
6. Marketing plan.
7. Production plan.
8. Investment plan.
9. Financial plan.
10. Applications.

The application indicates Additional Information, which may be required in the framework of the PP.

How is capacity utilization determined for a production plan?

LET'S CONSIDER AN EXAMPLE: the organization plans to manufacture garden carts. Marketing research is carried out to determine consumer preferences. Its results: among buyers, garden carts of the middle price category are most in demand. Market research data helps determine which products make sense to produce. After that, the volume of products to be produced is calculated. In this case, you need to focus on the estimated demand for carts. If demand is less than the volume of manufactured products, part of the production will simply remain unclaimed.

If the organization has been operating for a long time, it makes sense to compare the commercial demand forecast with the available capacities. This is necessary in order to determine the need for additional capacity. If such a need is identified, the list of required equipment should be indicated in the PP. The following information is also provided:

• Employee salaries costs.
• Availability of qualified employees.
• Electricity costs.

The significance of each of these indicators depends on the characteristics of the company's activities.

How to reflect the production process in PP?

In the manufacture of products, you need to determine the method of its production. When forming a PP, it is necessary to analyze the available equipment and technologies, and choose the most effective option. In this case, a choice is made between two forms of production:

• Low or high degree of automation.
• Standard or customized technology.
• The flexibility or performance of the system.

Most companies are suitable for the conveyor method of production. If the organization plans to work on special orders, other production methods will be needed. All these aspects must be reflected in the production plan.

Common Mistakes in Production Planning

Global errors in the preparation of the production plan lead to the fact that the document becomes completely irrelevant. Consider these errors:

• Unjustified increase in stocks in the warehouse. The purchase of raw materials in excess leads to the fact that part of the reserves remains simply unclaimed. This leads to the suspension of financial processes, an increase in the cost of maintaining storage facilities.
• Misuse of reserves. Assumes the direction of raw materials for third-party purposes. This leads to the fact that all goods are sold out, however, new raw materials have not yet arrived from the supplier.
• Increase in work in progress. In the event of urgent orders, a decision is often made to suspend production. This entails the suspension of work processes. The problem can be solved by refusing part of the urgent orders.

IMPORTANT! It is recommended to draw up the PP 1-2 months before the start of the financial year. If the financial year coincides with the calendar year, the formation of the PP should begin in early October. More than one specialist should work on the preparation of a production plan. Heads of all divisions of the company are involved in this work.

This article is a translation of material from the MBA knowledge base,
published at http://www.mbaknol.com and prepared for readers who wish to become familiar with the basic principles and steps of effective production planning.
For more detailed acquaintance, please go to the website www.ortems.ru

The process of planning and control is one of the most important in production. In fact, it is the nervous system production organization. It is vital that production is carried out as efficiently as possible at minimum cost, and goods of the right quality are produced at the right time.

But plans are not carried out by themselves, automatically releasing products. The production manager must take certain steps, such as the distribution of production tasks, tracking the progress of work, and checking whether actual performance meets planned indicators.

Thus, production control is a managerial function that includes the coordination and integration of various production processes in order to improve production efficiency. It is achieved through proper planning of work, setting the exact sequence of operations, the correct schedule that establishes the beginning and end of each operation, the timely issuance of orders and the adoption of measures necessary to ensure the smooth functioning of the enterprise.

In other words, production control includes planning, routing, production scheduling, issuance of orders for the manufacture of products and control of execution.

Production planning and control steps

1. Planning

The first important step in production planning and control involves the careful preparation of production plans. Production plans define what will be produced and where, what type, by whom and how. For detailed planning of production operations, relevant information can be obtained from several sources in the enterprise. Information about the quantity and quality of products to be manufactured can be obtained from customer orders and sales budgets, and information about production capacity can be obtained from production management and the engineering department. Thus, the planning function formulates production plans and translates them into requirements for personnel, equipment and materials.

Whatever the planning period, production planning helps to avoid accidents in production, ensuring a continuous flow of production activities, maximizing the use of production capacity to minimize operating costs and meeting delivery dates; coordinating the various departments of the enterprise to maintain a proper balance of activities, and, above all, providing a basis for control in the enterprise.

2. Drawing up a production plan (routing)

The next important function of production planning and management is the preparation of a production plan, which includes determining the route for the movement of raw materials along various types equipment and plant operations. Routing includes planning where and by whom the work will be done, determining the path along which the work should be done, and the necessary sequence of operations. To find this path, the focus is on defining operational data, which typically includes planning for WHERE and BY WHOM the work is to be done, as well as the required sequence of operations. This operating data is contained in a standard process flow chart that assists in the design of a route diagram showing the sequence of operations and the list of machines to be used. If the diagram indicates the absence of certain vehicles, an alternative route may be included in the plan. It is possible that an efficient route may not be available due to the unavailability of certain machines at a certain point in time. In other words, "routing establishes the list of operations, their sequence and the required class of machines and personnel required for these operations."

Based on the foregoing, we can conclude that routing is one of the very important elements of production control, since many production management functions are closely related to production processes and depend on the routing function. Thus, it is very important to solve various problems related to: appropriate personnel; the full use of production capacity and the determination of the exact time required at each stage of production.

3. Scheduling

Scheduling determines the time for each stage of production, that is, it predetermines "when the work should be done." It consists of the start and end times of the various operations to be performed. In other words, the scheduling function determines when each operation and the entire work should be performed. The optimal schedule determines the time each operation starts and ends on the specified machine to meet the desired delivery times. Good management means not only specifying when each operation should start, but also specifying the progress of each production part, the amount of work for each machine, and the availability of each machine for a new task.

Schedules can be of two types: main schedule (main production plan) and detailed schedule. The tasks described in the main schedule are used to plan the loading of the entire plant, while the detailed schedules are used to plan the production and assembly operations required for each product.

4. Issuing orders (dispatching)

Dispatching is a part of production control that translates the work planned on paper into real production. Dispatching functions are performed taking into account all the details of the prepared production plan and schedule. In this way, dispatching makes sure that the material is moved to Right place production that the tools are in right place that the work is moving along the route map. Dispatching carries out the organization of direct work in accordance with the plan. Thus, dispatching implies the issuance of work orders. These work orders initiate production. The orders contain the following information:

• Name of product
• Name of manufactured parts, assemblies or final assembly
• Order number
• Quantity
• Description and number of necessary operations, their sequence
• Departments involved in each stage
• Tools needed for every operation
• Plants and machines involved in each operation and dates of commencement of each operation

5. Execution control

Execution control is the last step in the production management process. This feature is designed to track production activities. The goal is to ensure that what is planned is done. The control function consists of reporting data on production and investigation of deviations from predetermined time schedules. Control includes the following functions:

• Verification that all materials, tools, components and accessories necessary for production according to current orders are available at all workplaces, in the specified quantities for launching and carrying out technological operations.
• Checking the progress of work and execution of operations at various stages of production. This includes collecting information related to the start and end times of tasks and completion dates, the status of actual work in relation to planned completion dates, movement positions of materials, parts and assemblies in production, and verification of results.
• Preparing progress records and monitoring their relevance.
• Reporting to production managers on all significant deviations for corrective action. Also includes reporting to the production planning department to adjust future plans.

Thus, production planning and control, going through all the above phases, ensures the production of products of the proper quality, quantity and ensures shipment within the stated time. It must be borne in mind that production planning and control is a continuous process, and its functions are interdependent.

Difficulties with order management and competent loading of production capacities make enterprises seriously think about increasing competitiveness.

One of our clients, Director of the IT Department of the managing organization "AEM-Technologies" told CNews how the introduction of a production planning system helped one of the largest engineering enterprises North-West of Russia - "Petrozavodskmash" to comply with the terms of production and improve its quality.