Demand Planning vs. 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.