Advanced Planning and Scheduling

Pros & Cons of Demand Planning vs. Resource Planning for Floor Managers

Demand planning & resource planning are important aspects of manufacturing that every floor manager struggles to merge together. The pros & cons


demand planning, resource planning

Demand planning and resource planning are two important aspects of manufacturing that practically every manager struggles to merge together. While demand planning calls for production to ramp up in anticipation of higher order volume, then slow down as orders decrease, resource planning requires a facility to make the best use of the resources that are available to satisfy the fluctuating demand.

Unfortunately, it’s pretty rare that these two planning methods work perfectly together. In fact, it’s next to impossible to get things to line up so that capacity of resources perfectly aligns to fluctuating demand. For many factories, this means that balancing demand planning and resource planning becomes a matter of guesswork, scrambling and customer apologies. Production struggles to meet demand during peak times, and it becomes someone’s job to figure out how to make a profit after the sale is made. The cost of production is rarely looked at during these times, because meeting customer demand is so important. All too often, someone discovers too late that they are selling goods at a loss because no one made sure that they could produce without overtime and as a result their labor costs have gone up.

With production planning software, it’s possible for a manufacturing facility to have a high level of agility and efficiency. APS software is able to use data on material and labor and create schedules that achieve the optimal method of production to satisfy demand. It can schedule workers and production so that goods are made during normal shift hours and overtime is reduced. Your facility will not have to schedule expensive overtime at the last minute because proactive scheduling will result in taking advantage of your resources at their maximum level at during normal shifts.

With the cost savings your company has from using this software, you’ll be able to sell and produce your products at higher margins and deliver faster than your competition.

Visualizing Demand vs. Capacity with the Inventory Plan in PlanetTogether APS

See how PlanetTogether APS helps floor managers visualize demand and resource capacity in one view. In this video, we use the Inventory Plan to show how upcoming demand, current inventory, and available capacity line up over time—so you can quickly spot when demand planning will overload your resources or drive overtime. It’s an ideal next step if you’re trying to move beyond guesswork and spreadsheets and want a clear picture of how demand and capacity actually interact on your shop floor.

 

Balance Demand and Capacity—And Protect Your Margins

In this article, you’ve seen how hard it is to get demand planning and resource planning to line up in real life. Demand planning pushes you to ramp up production for higher order volume, while resource planning is constrained by the people, machines, and time you actually have. The result is often guesswork, scrambling, last-minute overtime, and profit surprises once the dust settles.

With the right production planning and APS software, you can use real data on materials and labor to create optimized schedules that satisfy demand and keep production within normal shifts—reducing overtime and improving margins.

Our short eBook, “Producing for Profit,” shows what that transformation looks like inside a real manufacturing business. You’ll follow a growing manufacturer that’s struggling with late orders, high overtime, and constant firefighting—until they adopt a connected planning and scheduling system that aligns demand, capacity, and cost.

In this eBook, you’ll see how they:

  • Replace reactive scheduling and gut feel with a data-driven production plan
  • Use APS to align demand planning with real capacity, so they can meet orders without relying on expensive last-minute overtime
  • Improve on-time delivery while reducing expediting and excess inventory
  • Free planners from spreadsheet chaos so they can focus on improving margins and service instead of just “getting through the week”

If you’re ready to stop choosing between satisfying demand and protecting profit, this eBook is your next step.

Download Our Free White Paper Now

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