The Significance of Production Planning

Proper production planning will be crucial to your success. You will need to have a system in place to know when you should be reordering and also in what quantities.

Avoiding Inventory Issues

Failure to properly plan can leave you either running out of stock or having too much stock on hand, each causing their own problems. The issue of running out of inventory is obvious, you have nothing to sell. Customers can end up getting impatient and looking to other sources to fulfill their needs when you are out of stock, resulting in even more loss of profit.

On the other hand, when you order too much of a product, it can end up taking up storage space that may be better used for other items. Or in some cases, some products expire over time, which can also lead to waste when you over order.

Planning Production Orders

In order to efficiently schedule production orders, you need to know how much stock you go through of a product and how often. In order to do this, you’ll need to employ an accurate inventory tracking system to give you that information.

Thankfully, technology has made this easy with point of sale systems that can do it for you. These point of sale systems can track the exact time and place every order happens and the quantity of each product sold, making it easy to see what your popular items are. Take a look at what times of the year you tend to go through the most of your product.

Consider the Manufacturing & Shipping Times

The other piece of information you’ll need to observe is the average production and shipping time for your orders. If it takes two months to make a production order and then another month to ship it by sea, you should probably order 4 months in advance, just in case there are production or shipping delays.

Chinese Holidays that Affect Production

There is also the Chinese New Year Holiday that goes from the end of July through mid-February that you should account for as well. Because of the holiday most people tend to order in large quantities around that time filling many factory production and shipping vessel capacities, so you may want to order even a little earlier beforehand.

If you follow these steps, you’ll make ordering a lot less stressful on yourself without having to panic order. Proper production planning will help you maximize your profits, minimize loss, and ensure customer satisfaction by minimizing the chance you’ll run out of stock.

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