The basic functions of an Production Planning System include: inventory control, bill of material processing, and elementary scheduling. Production Planning helps organizations to maintain low inventory levels. It is used to plan manufacturing, purchasing and delivering activities. Manufacturing organizations, whatever their products, face the same daily practical problem - that customers want products to be available in a shorter time than it takes to make them. This means that some level of planning is required.
Production Planning System which lays out a detailed schedule of the required minimum start and completion dates, with quantities, for each step of the Routing and Bill Of Material required to satisfy the demand from the Master Production Schedule.
Purchasing Planning lays out both the dates that the purchased items should be received into the facility and the dates that the Purchase orders, or Blanket Order Release should occur to match the production schedules.
Production planning System helps to calculate and estimate goals and stages of manufacturing process during the constant changes of multiple factors. Some of these factors might include an increase of product range, introduction of new manufacturing equipment, changing inventory stock and others.
For a manufacturer it is very important to be able to make calculations and estimates of these factors as precisely, as possible.
As a result he wants to be able to answer all of the following questions:
What are we planning to produce?
What do we need for that?
What do we have?
What else is needed?
By answering the above questions manufacturer is able to prioritize what to produce and in which quantities, making the overall use of resources more efficient. Still, today many small manufacturing businesses employ intuition and obsolete methods when making a production planning decisions, losing precious time and unrealized business potential their business presents.