Best practices

Capacity Planning & Scheduling

How to develop an optimal production plan?

Published by Maxime Godenne On 30 Jan 2019


If governing is all about anticipation, it is also a matter of planning. While the basic concepts of production planning have been relatively stable over the past two decades, there is still a long way to go to deploy these processes at the optimal level. Indeed, planning loops are becoming increasingly complex in a context of high competitive pressure and demand driven by ever-growing volatility and instability.

To this must be added some challenges related to the specific production environment of various industries such as automotive, aeronautics or maritime industries, which have high process and product variability, as well as a large number of criteria to comply with, such as the work-in-progress level, equipment capacity and availability, batch priority, etc.

Given this context, the ability to develop an optimal and realistic production plan may seem tricky. We at Planilog believe it is essential to focus our attention on one of the most critical levels of production planning, that is capacity planning and scheduling.

What is production planning?


Production planning is a decision-making process that aims to anticipate the use of resources and the execution of activities to achieve specific objectives.

Resources can be material such as machines or raw materials, or human, i.e. the staff of the work center. Activities can be operations in the workshop or tasks (maintenance or process) to be performed. Each activity can have a level of priority, an earliest start date and a delivery due date.

There are many optimization objectives such as reducing cycle time, reducing delays, optimizing the resource utilization rate,... The planning process takes into account the internal or external constraints known now or that may be expected in the future.

Three Time Horizons

Strategic planning (long term, 1 to 5 years)

  • Looking for industrial partners 
  • Sourcing of suppliers and subcontractors
  • Opening, closing or relocating the production site
  • Launching a new production range
  • Plant configuration

Tactical planning (medium term, 3 to 6 months)

  • Sales & Operation Planning - S&OP
  • Master Plan Schedule - MPS
  • Resource Workload Plan 

Operational planning (short term, 1 to 6 weeks)

  • Activity scheduling
  • Workshop management and follow-up
  • Load balancing and business rules management

What is capacity planning? 

Production capacity planning is the primary link from strategic to operational planning. This process will provide a list of detailed production and operational planning guidelines for managing the day-to-day operations of manufacturing facilities. The crucial nature of this step is that it will determine the scheduling alignment with the different planning horizons.

In addition, its pivotal position in the planning process highlights the possible divergence between different optimization objectives. Some of the " common " objectives of production planning are: 

  • Early identification of bottlenecks
  • Customer delivery satisfaction (On Time Delivery - OTD)
  • Reduction of work in progress (WIP)
  • Reduction of cycle times
  • Maximum resource utilization rate

However, these objectives can be in conflict: the satisfaction of delivery times can be incongruent with the reduction of stocks or the respect of the capacity constraints.

The main goal of capacity planning is to find a positive balance between these different objectives. It involves scheduling production so as to meet both available capacities and delivery deadlines, and using production facilities as close as possible to its maximum load. Coordinated action is therefore the key success factor in optimizing production flows.

Three questions for the planner 

  • Capacity planning : What capacity is needed to satisfy demand?
  • Production planning : What is the production plan most in line with the reality by integrating demand and current capacity? 
  • WIP planning: What activity is required to ensure the delivery of work in progress?

APS system


APS or Advanced Planning & Scheduling system is a decision support tool for optimizing production planning over different time horizons. 

They are considered as ERP and CAMM system extensions that are unable to solve all supply chain planning problems. They use operational research and industrial mathematics methods that take into account production constraints and aim to optimize the Supply Chain by integrating performance objectives for one or more production plants.

Our Planilog solution

Step #1. From Infinite capacity to finite capacity

Start with infinite capacity planning to ensure that all data is correct. All activities must be planned and delivery dates respected. After measuring the load gap, and setting the APS (Advanced Planning & Scheduling) launcher in Finite Capacity mode, Planilog offers you the most realistic option to apply. 

Step #2. From non-blocking to blocking constraints

Plan your human resources constraints, supplies, semi-finished products, time matrix preparation and other constraints in blocking mode. The launch of the Planilog APS engine in blocking constraint mode will allow you to determine the most realistic production schedule based on your constraints in terms of time, capacity, batch priority, sequencing or setup.

Step #3. Kaïzen and collaborative approach

Use Planilog's collaborative functions to communicate between departments and report difficulties to treat them in a curative and preventive mode as part of a Continuous Improvement process. 

Step #4. Key Performance indicators

Measure the quality of your planning based on your KPIs and compare the gap between the actual situation and your objectives. Indicators allow you to objectively measure the effectiveness of your system and promote communication between users involved over different time horizons (operational, tactical, strategic).

Find out more

Feel free to contact us to learn more about our solution, to attend to an online demo, or simply let us know your planning and scheduling needs.

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