Production Planning and Control

The successful execution of a planning strategy demands that the analysis has been performed with
confidence in the accuracy of the information provided clarity in the way the information is
presented completeness of the information to be considered. Planning must also address the
resources and expertise that will be needed to implement the chosen purchasing strategy. The trend
to outsource both the initial conversion of raw materials, the manufacture of certain semi-finished
or finished products and some services, requires that the original expertise in purchasing these
materials and services is now needed to manage suppliers fulfilling a higher added-value process.
In addition, consideration must be given to decide the specific value drivers of the subcontracting
initiative for which Nestlé needs to control either the sourcing or pricing (or both). The realization
of the importance of the S&IM spend categories will result in Purchasing allocating more attention
to them. The task of planning a S&IM purchasing initiative may well require a different skill set
and knowledge base to that traditionally expected of a Strategic Buyer.

Forecasting technique and tools used by the company

Nestle uses an approach; their sales team calls it Bottom up approach for forecasting. In this
approach the sales team of a region tells its month wise demand per year to the zonal manager
than the zonal managers of all zones collects this data and forward it to national manager, then the
brand manager makes some changes if required, this how the forecasting is done in Nestle
Pakistan.

Role of aggregate planning

Aggregate planning is the process of determining the level of time, capacity, production,
subcontracting, inventory, out of stocks, and pricing over a specified time horizon, it is meant to
maximize profit by making decisions in the product family rather making decisions in SKU level.
It also shows how the company can efficiently and effectively use its facilities. Aggregate planning
optimizes the process of supply chain because all the supply chain stages work on a specific
aggregate plan. It is also used to determine how much workforce will needed and which suppliers
to select, how much capital and warehouse capacity will be required, or new production equipment
are needed to be purchased or not for the production. It plays a vital in supply chain because if
wrong planning can result in loss.

Production strategy used by the company

Production is an important part of the chain. At our store, the aim is to improve the environment
to maximize the growth of products while reducing consumption of resources and reducing waste.
The factories are equipped with full system control and monitoring of facilities and emissions and
can be controlled using edema conditions and ensuring their compliance with environmental
standards (NEQS). The production strategy follows the forecasted data of the sales team, after
analyzing the data brand team sends the data to the production. Nestle produces MilkPak in
batches.

Role of MPS in the production

Master Production Scheduling (MPS) supply chains are located in areas of innovation, such as
consumer needs, electrical planning, preliminary planning and marketing campaigns. This
software creates a plan that production is able to follow while also accounting for uncertain
challenges.
Instead of being production planning software that responds only to the needs of consumers, it
tries to maximize the potential of all production activities. Because the design of the production
plan has become a key component of an activity, there are many benefits to increasing efficiency
within the activity.
MPS plays an important role in production, the software provides a brief overview of any
manufacturing plans and allows manufacturers to have a clear understanding of what to expect,
which is explained throughout the organization. It also helps prioritize the requirements of supply
chain. Another aspect of MPS is that it helps to locate the potential bottleneck in the process in
order to help stabilize the production.

Role OF MRP in inventory management and production scheduling

When creating, planning resources is important for your work. Without resource planning, the
process will be very challenging to face in various fields of the supply chain, such as goods,
production and output. This is why the use of an MRP (Product Planning Process) system can
control production up to production, making project managers easier to order and prepare waiting
lists. It helps in inventory management, cost reduction and product optimization.

Advanced planning and scheduling software (APS) can be easily integrated into the MRP system.
APS offers an extension of your MRP system through several features and can effectively optimize
production in installations. It helps in resource scheduling, schedule optimization, capacity
planning and order management.

Role of Capacity Planning

Capacity planning is an integral part of the company's overall product plan. Capacity planning and
control is the process of establishing, measuring, monitoring and setting capacity levels to ensure
that all production plans and plans are implemented to the best possible extent. Capacity planning
plays a vital role by increasing Output speed limit capacity. As a result, capacity planning for the
business potential will be determined in the future to meet the demand for its products and services.
Capacity affects the cost of operations. The efficiency method depends on the expected demand.
Actual needs are usually different from desires. The result is either too much or too limited.
Excessive or lack of energy increases the cost of a production package. Although the numbers are
not perfect, sales will decrease. Eligibility decisions have a direct impact on the amount of
investment mentioned above. Capacity decisions lead to long-term commitments. These long-term
decisions are irreversible unless they are expensive

Inventory Management techniques and tools for dependent demand and independent
demand items
The inventory is managed by software called SAP (System Applications and Products). Another
method for managing the inventory is “Manual Counts” that is done by the “inventory clerk” on
daily basis, who is specially hired for this purpose. The counted stocks are recorded on a
whiteboard that’s placed inside the warehouse. It contains not just the information about the name
and no. of products but also in which lane they are and in what volume they are in. The whiteboard
information is updated every time a picker picks the order and also when the goods are loaded on
a truck for delivery. For further verification, Barcodes are also placed to scan the cartons of the
products every time they enter or exit the warehouse. Every batch of goods has a batch code like
this 2 043 1382 1 Z which tells the following information:
 The year in which that product was manufactured
 The day of the year in which it was Packed  A plant code in which it was Manufactured
 The no. of times a good goes through the machine
 A machine code

 Handling of goods in warehouse

There are five pickers in the warehouse. The supervisor assigns 4 of them to pick products by a
list. The list contains information about the product batch number, quantity, lane number and the
pallet number. Two of them pick the goods, the third one gives instruction and the fourth person
rechecks it. The FIFO method is adopted in the warehouse because Nestle is a FMCG company
and most of its goods are perishable and have limited time span. So what first goes into the
warehouse should be dispatched first.
 Order of goods
The goods are ordered on the basis of LIFO method. Orders are received from distributors across
the country. LIFO is used because it takes transportation cost, time to record and place an order
along with the delivery process. As for Nestle MilkPak, it has an expiry of 6months, so it needs to
be delivered first.
 Delivery of goods
There is a gate in the warehouse from where the goods are delivered, once the picker picks up the
goods, the process of delivery from warehouse begins. The supervisor of the warehouse rechecks
the goods are picked in the right quantity, packed in the right way and loaded in the right truck.

Lot sizing techniques for dependent demand and independent demand items
Nestle Milkpak has trucks which have the following capacity. The data is on the basis of cartons
per truck. Size of item No. of cartons 1 liter 1092 250ml 1815 1.5 liter 1040 500ml 1750 loading,
unloading, handling and transportation conditions acceptance letter, it is the conformance letter
that ensures that the warehouse accepts or receives the inventory, it includes:
 Invoice number
 Whom to sold
 Whom to ship
 Dispatch date
 From whom
 Product description
 Unit price