Production planning strategies incorporates a multiplicity of production elements, ranging from the everyday; staff to the ability to realize accurate delivery times for the customers. Its purpose is to minimize production time and costs, and efficiently organize the use of resources and maximizes efficiently workplace.
There are three (3) essential production planning strategies:
1. Chase strategy – match the production rate to the order rate by hiring and laying off employees as the order rate varies. Some of the advantage of chase strategy is keeping the inventory low, which frees up cash that can be used to buy raw materials or components, and reduces inventory costs such as cost of capital, warehousing, depreciation, insurance, taxes, obsolescence and shrinkage.
2. Stable workforce – variable work hours – vary the output by varying the numbers of hours worked through flexible work schedule or overtime. This strategy provides workforce continuity and avoids many of the emotional and tangible costs of hiring and firing associated with the chase strategy.
3. Level strategy – maintain a stable workforce working at a constant output rate. Scheduling consistently arranges the same quantity of goods for production based on the total demand for the goods.
4. Make-to-order – companies that used this strategy produce goods after receiving an order from the customer.
5. Make-to-stock – goods are produced before customers place orders. This strategy typically allows manufacturers to produce goods in long production runs, taking advantage of production efficiencies. A master production schedule determines the exact number of units to produce for each production run.
Our company uses the combination of chase strategy and makes to order strategies. Like what I mention before, our company