Today we’ll be diving into the delicate operations that are production and labor planning and how the CPG industry is looking to mitigate its modern challenges through synchronization of its asset planning tools.
Production planning and labor planning are closely interconnected aspects of efficient business operations. In an increasingly challenging and complex world of CPG manufacturing, investing in the right strategies for synchronization of your two major pillars of planning is critical to increased productivity, reduced costs, and overall improved operational performance.
A November 2022 Deloitte survey found that 70 percent of CPG manufacturers indicated the sector expects this year to be more stressful than the past five years. The survey found that 62 percent of CPG executives anticipate challenging supply chain issues this year and 52 percent are shortening their supply chains to try and mitigate the risks. The survey also found that 80 percent were concerned about global economic and geopolitical stability and 40 percent said that the financial situation had worsened within the last year. Just 30 percent believe that the economic picture will improve this year.
Here are some of the ways the industry is tackling today’s challenges through synchronized planning.
1. Demand Forecasting and Capacity Planning: Accurate labor planning starts with forecasting your production demands. By accurately forecasting market demands, you can ensure that you have the right amount of labor available when needed, at the right time, in the right place.
2. Balance Workload: Production planning helps in distributing work evenly across your shifts, your days, and your departments. This prevents situations where one shift is overloaded while another one is underutilized.
3. Lead Time Production: Effective production planning can lead to reduced lead times in manufacturing processes. This means that products can be produced and delivered more efficiently. As a result, Labor can be allocated more efficiently, avoiding the need for unnecessary overtime or rushed work.
4. Effective Scheduling: When you have a well-structured production plan, you can create more accurate schedules for your workforce. Scheduling can consider factors such as production volumes, machine availability, labor skills, etc. This prevents last-minute changes, reduces downtime, and optimizes labor allocation.
5. Resource Allocation: Production planning determines the resources needed for each production cycle, including raw materials and equipment. The availability of this information can determine the effective allocation of labor to ensure that production runs smoothly and efficiently.
6. Skills Matching: Effective labor planning considers the specific skills and qualifications of your workforce. By aligning the right workers to the planned demand, you can ensure the labor is used efficiently and tasks are executed on time and accurately.
7. Flexibility and Adaptability: Production plans should allow for flexibility to accommodate unforeseen changes that demand or supply chain disruptions. When production plans are adaptable and integrated with labor planning, the latter can be adjusted accordingly without major disruptions or costly overtime.
8. Reduced Overtime and Burnout: Poor production planning can lead to situations where excessive overtime is required to meet production targets. This can lead to employee burnout, decreased morale, and increased labor costs. Synchronization of production planning and labor planning can help minimize the need for overtime by distributing work more evenly across your available assets.
9. Communication and Collaboration: Effective asset planning, labor, or production requires collaboration between different departments, including finance, operations, and human resources. When these departments work together, labor can be accurately communicated and labor planning can be aligned with your production and capital expense goals.
10. Performance Tracking and Analysis: Effective labor planning involves setting benchmarks and goals. By tracking actual production against these goals, you can identify areas for improvement and make adjustments to both labor planning and production planning to achieve better outcomes.
In summary, A well-coordinated approach ensures that the right amount of labor is available with the right skills at the right time. Ultimately, this leads to improved efficiency, cost savings, and overall business success. This means investing in new technologies and integrating your appropriate ERP systems to supercharge the flow of data that is necessary for optimized operations.
Quoting the aforementioned study from Deloitte, almost half of the profitable CPG respondents said they’re investing in the collection of more detailed data from their supply chains. Deloitte asked respondents to describe strategies for driving profitability as they also try to overcome modern challenges. This report said the CPG companies were focused on holding down costs, increasing efficiencies, and finding creative ways to overcome the common industry challenges that we have started to face. Especially since COVID with 77 percent saying they will invest in new product innovation.
