Operation planning in supply chain management is a complex task. This is because the operation planning factors impact the production process. These factors include the availability of raw materials. They also include production facility capacity, demand for final product, and disruptions in the supply chain. Operation planning must also consider the company's objectives. This blog post discusses the nuances of operation planning. It also shares how to overcome some challenges.
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A challenge in operation planning is forecasting. Forecasting estimates future demand for a product or service. This is difficult because many factors impact demand. They are the economy, changes in consumer preferences and new competitors.
AI and ML are used to help forecast demand. They analyse data to see trends. This can then be used to predict more accurately.
2. Production Capacity
Another challenge is production capacity. It is the maximum amount of a product or service produced by a manufacturing process.
There are two types of production capacity. They are theoretical and practical. Theoretical capacity is the maximum output that can be achieved. That is if all the machines in a production system are used to their full potential. Practical capacity is the maximum output that can realistically be achieved.
Practical capacity is often lower than theoretical capacity. This is because of many factors. They are downtime, maintenance, and employee breaks.
To overcome this challenge, firms need to assess their production capacity accurately. They can do this by doing production capacity analysis. This is a process that assesses the capacity of the production system. This also identifies constraints.
Constraints need to be identified. Then, firms put try to improve production capacity. This could mean investing in new machinery. Training employees to use the existing machinery can be done too.
3. Supply Chain Disruptions
Another challenge is supply chain disruptions. It is an event that disrupts the flow of goods and materials in the supply chain.
Supply chain disruptions occur due to many reasons. They are natural disasters, political unrest, and transportation problems. They can also be caused by suppliers going out of business. Failing to meet delivery deadlines is another reason.
Supply chain disruptions have a major impact on businesses. They can cause production to stop entirely. They can also lead to shortages of raw materials and finished products.
Firms must address supply chain disruption risks. This could involve diversifying the supplier base. Having alternative sources of raw materials is there. Making contingency plans can also be done.
4. Miscellaneous Challenges
It is important to think of other challenges impacting operation planning. They are quality issues and regulatory changes.
Quality issues can occur when products do not meet the required standards. This could lead to customer returns, production delays, and financial losses.
Regulatory changes can impact operation planning if the products or services being produced are subject to government regulation. For example, if the government introduces new environmental regulations, this could impact the production process and the materials used.
New product development can also impact operation planning. This is because new products often require different production processes and materials. This can lead to supply chain disruptions and production capacity changes.
It is essential to consider all of these potential challenges when operation planning. By doing so, companies can be better prepared to deal with them if they do occur.
Operation planning is a complex process that must take into account many factors. The challenges discussed in this article are just some of the challenges that need to be considered.
Companies must overcome these challenges to ensure that their operation planning is successful. They can do this by conducting a production capacity analysis, implementing measures to mitigate the risks of supply chain disruptions, and considering all potential challenges.
If you want to learn more about operation planning, overcoming these challenges, and embark on a career in this field, consider enrolling in Professional Certification in Supply Chain Management & Analytics by the prestigious IIT Roorkee. This program will give you the skills and knowledge you need to become a successful supply chain analyst.
Some key features of the operation planning course in supply chain management include Certification by IIT Roorkee, hands-on learning with real-world SCM projects, and live sessions with IIT Roorkee faculty and industry experts.
If you need assistance regarding the program, contact us through chat support or drive to our training centres in Mumbai, Thane, Pune, Chennai, Bengaluru, Delhi, Gurgaon, or Ahmedabad. We will be happy to assist you.