Production Planning for Management Consultants & Analysts

· In the second section, we will look at some essential concepts that we will need to do the production planning. We will devote a lot of attention to removing bottlenecks.

In production planning, we use many terms, which are not always clear. In this part, we will discuss briefly the most commonly used terms.

To select the optimal option you have to take into consideration the following parameters

• Loss of juice in liters

• Set-up time

• Price of juice

• Shifts

• Lack of inventory of some type of juice

• Speed of the machine for different types of juice

In the next few lectures, I will concentrate on bottlenecks and capacity estimation

In every company, you have bottlenecks that limit your ability to go forward and deliver more goods and services. Here I will show you how to estimate what is the impact for the whole system and how you can remove improve them. I will use a simple production example to show you the effect on the whole system. You will see how the bottleneck can shift from 1 shift to another. You will also learn how to prioritize where it makes sense to invest to get the best results.

Before doing this lecture I strongly encourage you first to take the OEE lecture – we use the OEE concept here so if you are not familiar with it please start with the OEE lecture as a warm-up.

Your friend Ivan works in a content marketing agency and wants to improve the work of his team. Help him using the bottleneck framework

In every company, you have bottlenecks that limit your ability to go forward and deliver more goods and services. Here I will show you how to estimate what is the impact for the whole system and how you can remove improve them.

Now imagine that you were asked to increase the production capacity of a factory. Try also to calculate the financial impact of the proposed scenarios. Before we look at specific scenarios we have to discuss 2 issues

• What the production capacity depends on?

• How to calculate the monthly production capacity

First, let’s see what the production depends on assuming there is just 1 production stage

We have said that the production generally speaking depends on 3 drivers. Now let’s see how it looks like for the whole month

Here we will discuss the scenarios that we will analyze later.

Here we will discuss the scenarios that we will analyze later.

Here we will discuss the available data that we will use to solve the case study

In every company, you have bottlenecks that limit your ability to go forward and deliver more goods and services. Here I will show you how to estimate what is the impact for the whole system and how you can remove improve them. I will use a simple production example to show you the effect on the whole system. You will see how the bottleneck can shift from 1 shift to another. You will also learn how to prioritize where it makes sense to invest to get the best results.

Before doing this lecture I strongly encourage you first to take the OEE lecture – we use the OEE concept here so if you are not familiar with it please start with the OEE lecture as a warm-up.

In this lecture, we will see how you can present the result of the analysis in a form of graphs

One of the biggest problems for efficiency is the so-called Parkinson’s Law – Work expand so as to fill the time available for its completion. People when asked to evaluate the time certain things will take build-in buffers. One of the ways to deal with it is the so-called Critical chain. Here I will show you what it is

Production Planning impacts a lot of areas. Let’s see how it is linked to Sales Forecasting and Purchasing Planning.

The role of production planning will depend greatly on the production system used. Let’s discuss this briefly.

In many cases, Production Planning is a part of the Production Department. However, it may also be a part of the Supply Chain, Sales, or other departments.

In this brief section, I will show the main methods used in production planning.

In this lecture, you will learn how to calculate optimal batches and how to estimate savings when comparing to actuals batches. We will use his example of juice producer

2-stage production planning (planning for assembling and bundles). In many cases, you have to first prepare the components and then on the basis of this produce the end product. This requires a certain amount of additional planning, especially taking into account that the same component can be in different end-products. I will show you here on the basis of the example of a cosmetics producer how to create such a production plan, assuming optimal production batches for components and taking into account the inventories.

The future is pretty difficult to figure out. You don’t know what will happen. In those cases, it is a good idea to consider a few different scenarios. One of the ways to face it is via scenario analysis. I will show you how to use it in practice

Price formula in B2B services can drastically impact the margins and net profit. In this lecture, we will go through a case that will show you how to approach the analysis of the price formula with uncertainty on the scenario that will happen

In this lecture, I will show you how to solve the case shown in the previous lectures

In this lecture, I will show you how to solve the case shown in the previous lectures

Let’s imagine that a local bakery would like you to estimate the optimal production batch for muffins. You will use that scenario analysis.

In this lecture, I will show you how to solve the case shown in the previous lectures

In this lecture, I will show you how to solve the case shown in the previous lectures

In this lecture, I will show you how to solve the case shown in the previous lectures

In this lecture, I will show you how to solve the case shown in the previous lectures

In production planning, you have to decide how to organize production so that it is optimal not only from the point of view of production but the whole supply chain

The primary goal of Production Planning is to efficiently produce, with low inventory and provide at the same time on-time delivery. I will discuss what does it mean in practice.

Several drivers related to production planning have impacts on value generation. In this lecture, I will go over them so you know when to look for potential improvements.

There are a few typical problems that usually occur in production planning. I will go through the ones you should pay attention to well as I will show you what analyses you should carry out to see whether they exist in your customer’s company.

Now let’s have a look at more advanced methods of finding optimal production batches. They can be very useful in more complicated case studies.

In this lecture, I will discuss further more advanced techniques such as: simulation analysis, decomposition analysis, feasibility analysis, and sensitivity analysis 

The future is pretty difficult to figure out. You can use scenario analysis or you check ALL the potential options and see which is optimal. I will talk about this technique in this lecture and when to apply it. The impact of the price change on your profit will depend on a few factors. I will discuss in this lecture what you should take into account and how to calculate it.

In this lecture, I will show you how to solve the case shown in the previous lectures

In this lecture, I will show you how to solve the case shown in the previous lectures

In this case, we will do the simulation of the whole logistics system and show you how to choose from many options.

Here we will give you tips on how to calculate the cost of the whole system and how to prepare for the simulation

We present here the final solution to the case. We show how to do the simulation of logistic costs for 8 different options in 5 minutes

Let’s imagine that you are working for a cheese producer. Your task is to find the optimal production batch. Use for this the simulation method.

In this lecture, I will show you how to solve the case shown in the previous lectures

In this lecture, I will show you how to solve the case shown in the previous lectures

The role of the production planning will be different if you have implemented continuous flow with kanbans. We will discuss in this section what is continuous flow.

Kanban is a way in which you can drastically limit work in progress. I will show you in this lecture what it is and how it looks like in practice

I will show you how to calculate the impact of Kanban in Excel

The ideal in production is the so-called continuous flow - everything goes smoothly and fast. Products are being produced fast and cheap. In this section, I will tell you how to achieve it.

Using a sandwich factory I will show you the mistakes people do when they try to create a continuous flow.

I will continue our example of a sandwich factory. I will show you how the continuous flow should look like.

I will continue our example of a sandwich factory. We add the Kanban to the continuous flow

I show here an example of continuous flow in services

Production planning will look differently if you have implemented continuous flow and Kanban. In this section, I will show you how to calculate optimal production batch and Kanban size.

Let’s imagine that you have to define the Kanban for French fries in a chain of burgers.

Let's solve the previously introduced case study.

Let's solve the previously introduced case study.

Let’s imagine that you have to calculate the size of the Kanban for legs in a furniture factory.

Let's solve the previously introduced case study.

Let's solve the previously introduced case study.

Let’s continue our case study with the chair producer. This time we will have 2 types of legs.

Let's solve the previously introduced case study.

Let's solve the previously introduced case study.

Let's solve the previously introduced case study.

Let's solve the previously introduced case study.

Let's solve the previously introduced case study.

Apart from optimizing the production you have to think strategically and know when you have to add a new capacity/factory. In this section, I will show you how you can do that

Here I will show you how to manage capacity depending on your industry and demand forecast. 

Locations of some factories depend on the so-called supplier catchment area. You are looking for an area where you have a sufficient amount of resources or suppliers. Here we will see how catchment area influences the decision on capacities

The customer catchment area is important in picking the right location for the factory. Both B2B as well as B2C. Here I will show you how to approach this subject

In this lecture, we show how you can measure and analyze what is the maximal reach of your B2B business having in mind transportation costs and markups. We will provide you with a fast way to identify potential customers and measure your targeted price on a specific foreign market

Quite often you have to make important decisions faced with uncertainty. In those situations, it is very useful to apply the so-called decision tree. In this lecture, I will show you how to use this technique.

Quite often you have to make important decisions faced with uncertainty. In those situations, it is very useful to apply the so-called decision tree. In this lecture, I will show you how to use this technique.