Planning for Business Production

The story is often told of an accountant who, after performing an audit of a company’s financial health, offered a set of recommendations on improving the profitability of the company. As the company executives looked over the recommendations, most of them were accepted with little hesitation. One recommendation, however, seemed very upsetting to them.

During one portion of the production activities, the accountant found, half of the work was outsourced to another company at a rate significantly higher than the cost of the in-house process.

To the accountant, the answer seemed clear: perform all of the process in-house. The president of the company explained their dilemma.

During the production analysis performed when the company facility was being designed, it was overlooked that a critical process step took twice as long as the previous production steps to complete. The accountant suggested getting a second assembly, to which the president sighed and asked “where would we put it?”

The production facility, because of one simple oversight during the production analysis, was simply too small to add the necessary equipment and due to the costs involved in moving to a larger facility, it was more cost effective to contract the extra load out to a third party.

The Lesson Learned

An often overlooked and underrated segment of business planning is the production analysis. Production analysis is the determination of equipment necessary for a given operation, the volume and type of materials required, the size and nature of facility required for the operation, and the rate at which such facilities can, under realistic circumstances, produce in a given time period.

As can be seen in our tale of woe above, overlooking even the smallest segment of production can have costly consequences. Most planners overlook potential bottlenecks in the production process, particularly if the step seems like a minor detail.

To adequately perform a production analysis, the capacity of each segment must be taken into account. The production capacity of a company, without resorting to expensive, outsourced services, is limited to the slowest component in the production process.

Most equipment suppliers are ready and willing to share technical specifications on their products in hopes that such information will lead to another sale for them. Amongst the information critical to process analyses are:

• Average production capacity
• Operational personnel requirements
• Physical production space dimensions

With these critical details, a comprehensive picture may be developed regarding overall facility production potential, payroll projections, and physical facility requirements.

Final Thoughts

As can easily be seen, though often underrated, the production analysis is a critical component of business planning. Though the information required can easily be obtained, it can be very time consuming, particularly for busy business executives. This is where companies like ours enter the picture.

Our staff of highly skilled writers specializes in research and development of reports of all types and at every conceivable level of detail. With the use of cutting-edge techniques (which includes state-of-the-art research software), our writers routinely produce materials that are rarely matched by our competitors. The key to understanding this fact is knowing their individual philosophy of every document produced being a reflection of their personal reputation and honor. Putting this dedicated staff to work on your project requires only one thing … your order.