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Production planning, among other things, involves meticulous co-ordination among all the departments of a company like marketing department, sales department, inventory department and finance department.  Without effective co-ordination, the company will not be able to get profit and without profit, no business can survive for long; business aims at profit and profit sustains business.

To achieve and maintain profitability, many interdependent activities must continue effectively without hiccups. Profit is not possible if the customers are not satisfied. Customer satisfaction which is the breath of any successful enterprise depends on apart from the obvious fact of quality the continuous availability of the products which binds the customer with the company. Continuous availability of the product which is an essential feature for brand-building exercise solely depends on continuous availability of the resources required for production and the presence of necessary resources in terms of materials, machines and men is guaranteed only if there is stable finance of the company. It is clear now how all activities of all departments are actually integrated networks of operations moving along the path of assured profit.

Production planning necessarily leads to scheduling.  Generally, production planning first aims at completion of production in time; second, it aims at reducing throughput time; that is, the time taken for a job to be completed, the time taken from the opening of order till its completion.  It means efficient handling of production-related jobs avoiding wastage of time.  It is very strategically significant; the more the time is taken to complete tasks, the more is the cost of production which in turn influences pricing policy. Thirdly, it utilizes the capacity of personnel and the machinery to the maximum so that the cost of production does not escalate resulting in consequence in a strain on price; that is, the more money you put in production, the more the company is forced to a higher price tag for its products. It is a commonplace fact with any business.

Production scheduling is also an indispensable tool to obtain steady flow of production which guarantees delivery of products on time to the customers. Schedule reflects a comprehensive picture of the company in terms of production requirement to meet the demand and of the availability of resources whether adequate or inadequate. It takes into account the production plan, and other facts like backlog, availability of capacity and all in the background of the policies and goals of the management.  There are different kinds of scheduling like Finite Capacity Scheduling and Infinite Capacity Scheduling.

Since scheduling is a very critical strategy for any business, particularly manufacturing business, we will give some more thought to it in our next session.

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