A production plan is a week-by-week statement of how many of each product a workshop will make. It sets demand against the hours your people and machines have and the materials in the store. For a small workshop it fits on one sheet, and it is checked before anyone promises a delivery date.
This guide builds one for an 8-week season in a five-machinist workshop in Cairo, in Egyptian pounds. You will see capacity worked out in units, a level plan tested against a chase plan, and the materials timed to arrive.
What goes into a production plan
Six numbers go in and one comes out: how many to make each week. The formula is planned production = demand + closing stock you want − opening stock.
| Input | What it is | Where it comes from |
|---|---|---|
| Demand | Confirmed orders plus the forecast, week by week | The order book and your demand forecast |
| Opening stock | Finished goods already on the shelf | Your stock records |
| Closing stock | What you want left at the end of the period | Your choice: often zero at the end of a season |
| Capacity | Units your people and machines can make in a week | Hours available × units per hour |
| Materials | What each unit uses, what is in the store and what is on order | Your bill of materials and your raw materials records |
| Lead times | Days from ordering a material to having it | Your suppliers' real delivery record |
Production plan vs production schedule
The plan sets quantities per week; the schedule sets who makes what, on which machine, on which day. Plan the season first, then schedule one week at a time.
Larger factories call the product-by-product weekly plan a master production schedule. A small workshop can keep plan and schedule on the same sheet.
How to build a production plan in 6 steps
For example, a workshop in Cairo sews school shirts with five machinists. Every figure below is an illustration, worked so you can copy the method.
Step 1: Put demand in weeks
List confirmed orders and the forecast for each week of the season. In this example, two school shops have confirmed orders and the owner forecasts walk-in buyers on top.
Demand for the 8 weeks before schools open: 200, 200, 250, 300, 400, 550, 700 and 600 shirts. That is 3,200 shirts, an average of 400 a week, with the peak in week 7.
Step 2: Work out capacity in units
Capacity in units = people × hours a week × units per hour. Plan below the full figure, because power cuts, breakdowns, absence and maintenance take hours every week.
| Item | Working | Result |
|---|---|---|
| Standard time per shirt | 30 minutes of sewing | 2 shirts an hour |
| Hours per machinist | 8 hours × 6 days | 48 hours a week |
| Full capacity | 5 machinists × 48 hours × 2 shirts | 480 shirts a week |
| Planned capacity | 480 × 85% | 408 shirts a week |
The 85% is this workshop's own allowance for lost hours. Set yours from the last few weeks: shirts made, divided by what full capacity would have made.
Step 3: Choose a level, chase or mixed plan
A seasonal plan has three shapes. The open textbook Operations Management, by Azim Abbas and Seyed Goosheh, names all three; in short:
- Chase: production follows demand week by week, with overtime or extra workers at the peak and idle hours before it.
- Level: production stays the same every week, and stock built early covers the peak.
- Mixed: a level base, with overtime, subcontracting or stock taking up the rest.
Here is the shirt season both ways. The level plan makes 400 shirts every week, the season's average.
| Week | Demand | Level: made | Level: stock at week's end | Chase: made | Chase: overtime needed |
|---|---|---|---|---|---|
| 1 | 200 | 400 | 200 | 200 | 0 |
| 2 | 200 | 400 | 400 | 200 | 0 |
| 3 | 250 | 400 | 550 | 250 | 0 |
| 4 | 300 | 400 | 650 | 300 | 0 |
| 5 | 400 | 400 | 650 | 400 | 0 |
| 6 | 550 | 400 | 500 | 550 | 142 |
| 7 | 700 | 400 | 200 | 700 | 292 |
| 8 | 600 | 400 | 0 | 600 | 192 |
| Total | 3,200 | 3,200 | 3,200 | 626 |
The chase plan fails on hours. Week 7 needs 292 shirts above the planned 408, or 146 extra hours: 29 more hours for each machinist, a 77-hour week.
The level plan's only cost is cash. At its peak it holds 650 finished shirts, which at EGP 200 each to make is EGP 130,000 waiting on shelves.
The same textbook's chapter summary notes that a level plan often costs least. This workshop uses it as a mixed plan: 400 a week, with Saturday overtime only to recover a week that falls short.
The EGP 200 is the shirt's full cost: fabric, buttons, labour and the workshop's overheads. How to build that figure is in manufacturing costs.
Step 4: Check the materials against the plan
Multiply the weekly quantity by what each unit uses, then order early enough to cover the lead time. In this example each shirt takes 1.5 metres of fabric, at EGP 60 a metre.
| Item | Working | Result |
|---|---|---|
| Fabric a week | 400 shirts × 1.5 m | 600 m |
| Fabric for the season | 3,200 shirts × 1.5 m | 4,800 m |
| Cost of the season's fabric | 4,800 m × EGP 60 | EGP 288,000 |
| Orders, with a 2-week lead time | 1,200 m in store, then 1,200 m ordered in weeks 1, 3 and 5 | Each order lands as the last one runs out |
A plan the store can't feed is only a wish. Check buttons, thread and packing the same way, from the bill of materials.
Step 5: Turn the week into a daily target
Divide the week's quantity by the working days: 400 ÷ 6 is about 67 shirts a day. Pin the daily target where everyone sees it, with a line for what was really made.
Step 6: Compare plan with actual, daily and weekly
Tally output at the end of each day, and re-plan once a week. A shortfall found on Wednesday can be made up by Saturday; one found at the end of the season can't.
| Day | Target | Made | Note |
|---|---|---|---|
| Monday | 67 | 70 | |
| Tuesday | 67 | 64 | |
| Wednesday | 67 | 42 | Power cut: 3 of the 8 hours lost |
| Thursday | 67 | 68 | |
| Friday | 67 | 70 | |
| Saturday | 67 | 59 | |
| Week | 400 | 373 | 8 failed inspection, so 365 good shirts |
The week ended 35 good shirts short. Early in the season that only trims the stock being built, from 200 to 165 shirts, but the 35 go into week 2's overtime.
Types of production, and what each means for the plan
How you make things decides what the plan fixes. Most small workshops mix two of these.
| Type | How it works | What the plan sets | Example |
|---|---|---|---|
| Job | Each order made to its own design | A promise date per order, from the hours each needs | A carpenter's fitted kitchen |
| Batch | A run of one product, then a changeover to the next | Run sizes and their order in the week | A bakery: 200 loaves, then buns |
| Flow | One product made without stopping | A steady daily rate | A water-bottling line |
The shirt workshop makes to stock: it plans from a forecast and sells from the shelf. A workshop that makes to order plans from its order book, and the plan's main output is the promise date.
Three mistakes that break a production plan
- Planning at 100% capacity. Machines stop and people are absent. A plan with no allowance is late from its first power cut.
- Promising dates before checking materials. The hours may be there while the fabric is two weeks away.
- Planning from the office only. The daily tally shows problems the plan can't, such as a slow machine or a missing part, while there is still time to act.
Measures that show the plan is working
Five measures cover a small workshop, each worked on the example's first week.
| Measure | Formula | Week 1 |
|---|---|---|
| Plan attainment | Good units made ÷ units planned × 100 | 365 ÷ 400 = 91% |
| Rejection rate | Units failed ÷ units made × 100 | 8 ÷ 373 = 2.1% |
| Downtime | Planned hours lost to stops | 3 hours × 5 machinists = 15 hours |
| On-time orders | Orders delivered by the promised date ÷ orders due × 100 | No order due yet |
| OEE | Good units × standard time ÷ planned production time | 365 × 30 min ÷ 14,400 min = 76% |
OEE, overall equipment effectiveness, combines availability, speed and quality in one figure; the simplest form is used here, from OEE.com's calculation guide. The planned time is 5 machinists × 48 hours × 60 minutes.
These measure the making. For the stock side, the inventory management KPIs cover turnover, dead stock and stockouts.
Running the plan's numbers in ArmPOS
ArmPOS has no production module: no bill of materials, no work orders and no automatic use of materials when goods are made. The plan itself lives in a spreadsheet; ArmPOS keeps the stock and sales numbers it starts from.
- Get last season's demand. Reports › Product sales report exports each product's sales by date to EXCEL (Sales reports).
- Keep confirmed orders as quotations. A quotation doesn't change stock. When you deliver, Convert to Invoice turns it into the sale (Quotations, on plans that include them).
- Set up materials and shirts as products. To buy fabric by the roll and count it by the metre, build a Roll unit on Metre with Multiply 50 (Categories, brands and units).
- Record material orders as purchases. A purchase saved as ordered or pending leaves stock unchanged; set it to received when the fabric arrives (Record a purchase).
- Record each run with two adjustments. A Subtraction takes off the materials used, and an Addition puts on the shirts made. Put the week in the Note (Count and adjust stock). The full method is in barcodes in manufacturing.
- Warn before a material runs short. Set each material's Stock Alert to what the plan uses before the next delivery lands (Add your first products).
- Watch the cash the plan ties up. Inventory Valuation multiplies stock on hand by cost, so you can see the level plan's stock in pounds (Stock reports).
A workshop that needs work orders and automatic use of materials needs an ERP system, which runs production as well as sales.
Frequently asked questions
What are the main parts of a production plan?
Demand by week, opening and closing stock, capacity in units, materials with their lead times, and the quantity to make each week.
What is the difference between a level and a chase production plan?
A level plan makes the same amount every week and builds stock for the peak. A chase plan makes what each week needs, using overtime or extra workers at the peak.
How far ahead should a small workshop plan?
Plan the whole season in weeks, and fix only the next one or two. Further out, the plan rests on a forecast and should change as orders come in.
How do I find my workshop's real capacity?
Count what you made over the last few normal weeks and divide by the hours worked. Plan with that rate, not with the speed printed in the machine's manual.
Can ArmPOS make a production plan?
No. ArmPOS has no production module. It holds the sales history, materials, purchases and stock that a spreadsheet plan starts from.
A production plan is only as good as its starting stock. Create a free ArmPOS account to keep materials, purchases and finished goods in one place. Workshops in Egypt can start from ArmPOS in Egypt.
