Steps in Writing a Production Plan
Writing a production plan follows certain procedures:
1. Estimating the number of products to be produced
Determine the number of products you intend to sell and the number of products you intend to stock to accommodate unexpected demand. Go over your marketing plan.
2. Planning of raw materials and components
List down all the raw materials needed and the sources where you can obtain them. Find out if there are enough supplies and compare their prices.
3. Identifying specific operations for production
Observe other manufacturers performing similar activities. Discover their secrets as much as possible. Use the most useful combinations of technology. Remember that full mechanization is where production is geared towards fully
4. Identifying the machines and equipment and the way to use them
Carefully study your plans to acquire machines needed in the operation. There are 2 classifications of machines: the general purpose machines that perform a wide range of functions and the specialized machines that are intended for one function only.
5. Planning the number and level of skilled workers needed
With the knowledge of the operations and mechanism needed in the manufacture of your product, you can now determine the number of workers needed in each operation and the level of skills they possess. You can also determine the specific jobs which require specific workers and their reasonable wages, salaries and benefits. You need to plan these carefully.
6. Planning the stages of manufacturing
Make a flow chart of the actual manufacturing of the product. Note the following stages in manufacturing:
7. Costing the product or service
There are two types of cost. The direct cost includes all the costs of the items needed to produce the product while the indirect cost covers all other operating expenses like utilities (electricity, water, etc), salaries and wages, office rentals, selling cost, financial cost (loans plus interest etc.)
8. Planning the machine and equipment maintenance
All machines and equipment require attention periodically in order to keep
them in satisfactory condition. Preventive maintenance rather than remedial maintenance, should be stressed. The former seeks to catch trouble before it happens;
this is accomplished by scheduling inspections at carefully determined intervals. The latter, or remedial maintenance, deals with trouble after it occurs.
9. Planning financial requirements for production
Before you can operate your business you will need a working capital to buy raw materials and some property and resources like machineries and equipment All the property and resources that you will acquire in connection with your operations will form part of your fixed assets. It will not be wise to buy them on impulse.
10. Planning how much working capital will be tied up in stock
In preparing a production plan, try to forecast the amount of materials needed for production but do not invest much on stocks. Remember, they will remain idle for a long period causing you to have less cash on hand.
11. Planning the business premises
Choose locations where there is comfort and convenience for everyone including the product distributors. Factories are usually located near the source of materials.