Using data analytics as a decision support platform for effective production planning

Abstract

Material planning has a huge impact on the performance of Engineer to Order (ETO) companies. Since the ETO companies initiate the product design, raw material procurement and production after the customer places the order, it is difficult to have a forecast of required raw materials, so the procurement of crucial materials and components needed for production is done after the customer places the order. This creates an uncertainty for the materials to arrive in time for the production. If there are material and component delays, then it is difficult to follow the pre-planned production plan. This creates a need to replan the prepared production plan, which creates a ripple effect and disrupts the entire production flow. So, there is a need to have a right system to visualize the material planning flow from the design team in the company to the procurement department to the production planning department, as this will give an overall visual mapping of the material flow and enable better production planning. This visual map can help the production planners to prepare a reliable production plan by considering the late arrival materials and planning the production accordingly in such a way that the production plan does not require replanning due to later arrival of materials. Data analytics softwares can be used for this purpose of mapping and visualizing the material flow.