Written by guest contributor Megan Ray Nichols, a freelance stem writer and the editor of Schooled By Science. For more from Megan, you can follow her on Twitter or subscribe to her blog here.
Keeping track of your business can be challenging in the modern age. You’ve got suppliers to negotiate with, payroll to calculate and every aspect of your supply chain to monitor. A production plan can help you navigate all of these variables by laying them out in a neat and tidy list. If you haven’t created a production plan yet — or are looking for ways to improve the one you already have — here are some quick and easy tips to help you optimize your program.
Production Plan Forecasting
It’s obviously not possible to predict every problem that might occur in your business. What you can do is prepare for any possible contingency the workplace might throw at you, even if you can’t know when they might occur.
This is called forecasting, and it’s essential for any good production plan. Forecasting gives you a plan of attack for anything that could go wrong. Without this part of your program, any little hiccup could take your company offline, resulting in costly downtime.
Forecasting can also be applied to components like demand and supply, helping you ensure you always have what you need on hand, even if the market goes up. Without a plan, you may be left scrambling to get your hands on necessary materials when you need them the most.
This isn’t fortune telling. You can’t know precisely when the demand for your product will change, but you can use records of previous sales to help you predict when the demand might go up again. From there, you can set up contingencies, so you’re always ready when things change unexpectedly on you.
The phrase “inventory control” doesn’t refer to controlling your inventory. It’s part of lean manufacturing — controlling your inventory levels, so you never have more or less than you need. In most situations, you might keep some surplus inventory on hand in case of high demand. This is where forecasting comes in. If you’ve planned for changes in demand and supply, you never need to keep a surplus on hand because you’re always ready to change your orders at a moment’s notice to keep your supply at optimum levels.
This step also increases production efficiency and reduces the need for large warehouses, allowing you to take advantage of smaller and less expensive storage spaces.
Your crew and your inventory are only two pieces of the production plan puzzle. The equipment you keep on hand is another piece of that puzzle, and you can’t see the picture on top without all three parts. Your production plan should always include your equipment — your projected needs, any necessary maintenance, expected equipment lifespan and the cost of unforeseen repairs.
If you rent specialty equipment that you don’t usually keep on hand, you also need to consider the risks associated with this practice. Rental equipment comes with its levels of liability and risk. For each piece of rented equipment, it’s also a good idea to purchase an insurance policy. Most rental companies offer these for an additional fee. That way, if something does go wrong and the rental equipment is damaged or destroyed, it will only cost you the policy’s deductible — which will likely be a much more manageable expense. You won’t be stuck paying thousands or tens of thousands of dollars to repair or replace the equipment.
Your crew is one of the most varied and valuable resources you have access to as a business owner or manager. It is your responsibility to train, protect and value these human resources because it would be impossible to run a business without them. This is why they should be included in your production plan. Employees should be trained to understand what is expected of them from the moment they walk in the door. If those expectations change, new training is in order.
Creating a production plan means being able to communicate what you expect from your employees to them quickly and efficiently while taking into account things like personal learning capacity and speed. Human beings are imperfect machines, and it might take a few tries before you figure out the best way to utilize your human resources while still respecting them as people.
As with most aspects of business, there are risks and challenges to setting up a production plan.
Making changes after your standard operating procedures have been established, even changes that are designed to increase efficiency in line with your production plan can cause problems. These changes need to be approached delicately, and accommodations made for a potential loss of productivity while the new policies take effect.
Implementing a new production plan will also require weeks or months of follow up to ensure everything is working smoothly. It takes people a while to learn new processes and procedures, especially if they’ve been doing things a different way for a while.
Production plans also need to be flexible. The market is continually changing and evolving, and these plans cannot be static if you hope to thrive and avoid becoming stagnant.
Building a comprehensive and flexible production plan can help you prepare for any obstacles that might occur. Take the time to create a production plan for your business, especially if you haven’t designed one yet. The changes may take some time to adopt, but being prepared for any contingencies can help keep you moving forward instead of scrambling to compensate for costly downtime.