Advantages of Aggregate Planning

Aggregate planning refers to intermediate range capacity planning that typically covers a period of 2 to 12 months. The goal of aggregate planning is to create a production plan that will make optimal use of the manufacturing facility’s resource capacity to meet projected demand. Items are aggregated (grouped) into categories as it can be difficult to predict the exact demand quantity of each item.

These plans provide the framework for which manufacturers can determine staffing requirements, materials needed, output rates, timeline estimates, and budget costs in advance. The effort put into aggregate planning will help your operations save money, streamline operations, and increase productivity.

Aggregate planning is important as it allows manufacturing facilities to anticipate and prepare accordingly for expected increases in demand while allowing for variation as the plan is created for groups or categories of items.

Before implementing aggregate planning into your manufacturing operation, it is important to understand the advantages associated with it. In this blog, we will explore just some of the numerous advantages of aggregate planning for your manufacturing operations.

Advantages of Aggregate Planning

The advantages of utilizing aggregate planning include the following:

• Minimize Staffing Fluctuations - Through utilizing aggregate planning to forecast production demand, businesses are able to predict staffing requirements. Businesses that are in need of additional employees on a temporary basis tend to fill these positions with workers from temporary employment agencies. With proper forecasting, a business will be able to reduce or eliminate the need to hire extra workers. Ultimately, this will save the business both time and money as it will not need to pay additional fees to the staffing agency and it won’t have to pay workers to train the new additions.
• Reduce Overhead - Within a manufacturing facility, having excess inventory can cost a lot of money. This is because the facility must ensure that it has enough material on hand to produce the finished goods as well as the space to store those items. In addition, having finished products laying around increases the likelihood that they will become damaged or become obsolete before they are sold. Adhering to an aggregate planning model can help production facilities keep lower levels of inventory and reduce overhead costs. 
• Accommodate Changes - Most production companies cannot stick to a single plan at all times as production orders can change often. Aggregate planning allows for contingency plans to be put in place in order for production facilities to be able to accommodate for significant changes in customer orders and production. Updating forecasts and production plans periodically allows planners to take into account any changes in expected demand or supply and revise plans.

A software that can easily aid with aggregate planning is PlanetTogether’s Advanced Planning and Scheduling (APS) software. This software can help with the strategic objectives of aggregate planning such as determining resources, projecting demand, adjusting capacity to meet demand, and calculating capacity requirements.

With PlanetTogether, we’re able to make strategic decisions that improve operations. We can proactively prepare for anticipated increases or slowdowns in demand.

DICK MARX, MATERIALS MANAGER, KNAPHEIDE TRUCK EQUIPMENT

While working with an aggregate plan facilitates intermediate production planning, it is important to convert aggregate units into actual products offered. The results of this will be a Master Production Schedule (MPS) that identifies the quantity and timing of materials and parts for every individual product.

PlanetTogether APS software concurrently plans and schedules your production based on actual or predicted demand and allows you to plan your production months in advance. In addition, its “What-If” scenario feature allows you to create and evaluate the best production plan and make adjustments in seconds.

Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With PlanetTogether APS you can:

• Create optimized schedules that balance production efficiency and delivery performance
• Maximize throughput on bottleneck resources to increase revenue
• Synchronize supply with demand to reduce inventories
• Provide company-wide visibility to resource capacity
• Enable scenario data-driven decision making

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!