What Is Manufacturing Process Planning?
by Lindsay Kramer
Published on 22 Nov 2019
Manufacturing process planning is a critical step in business planning because during this stage, a company’s leaders identify, source and price the parts used in its products. The leaders also determine where and how to manufacture the products and what it will cost the company. Once a manufacturing plan is in place, the company’s leadership team can develop its operating budget and from there develop other specific budget plans.
Manufacturing process planning is also known as production planning . Production planning is used in nearly all industries, from agriculture to the oil and gas industry. There are numerous types of production planning, each of which is best suited to specific business models and industries.
What Is Included in a Manufacturing Plan?
A manufacturing plan, like a business plan, is a comprehensive file that covers all aspects of a product’s assembly. For a print shop that manufactures custom-printed T-shirts and hats, the manufacturing plan should cover all of the following:
- Where to source the blank T-shirts and hats
- The type of ink used to print designs on them, its cost and the processes involved in printing and curing it
- The machinery used to print the designs, such as different models, their costs and their operational processes
- The number of employees needed to operate the printing machinery
- The shipping time from the blank products’ source to the print shop
- How long it takes to deliver a printed product to the customer, from initial design to delivery of the finished product
- The series of steps necessary to create the finished product
When developing a manufacturing plan, the manufacturing process planner finds ways to shorten production time and lower production costs without compromising the finished product’s quality. This could mean buying raw materials in bulk, adding employees to the assembly line to ensure products move through it quicker, or arranging production stations to maximize efficiency between one step and the next.
Types of Production Planning
There are five recognized types of production planning:
- Job method
- Flow method
- Mass production
- Batch method
- Process method
The job method of production planning incorporates concerns about human workers’ labor into the manufacturing plan, like the skill set necessary to build the product and the number of workers needed to assemble products. Typically, the job method of production planning is used for products that don’t require much or any specialized manufacturing equipment.
In contrast, the mass production method is specifically for planning for manufacture using specialized equipment. The process method is also applied to manufacturing plans that involve specialized machinery and require a specific, streamlined assembly sequence.
The flow method and batch method of production planning are somewhat similar. With the flow method, the goal is to reduce labor and material costs by streamlining workflow. With the batch method, assembly stages are broken out into steps, and at each point in production, specialized teams manufacture parts and portions of products.
Concerns for a Manufacturing Process Planner
For a small business, the role of a manufacturing process planner is to identify the most cost-effective way to manufacture a product .
For example, a commercial bakery might need to produce 3,000 doughnuts every day. The manufacturing process planner’s task is to determine what kind of equipment is necessary to produce 3,000 doughnuts according to the brand’s doughnut specs, which production facilities can handle the workload, what it will cost the company to produce 3,000 doughnuts per day and how to ensure the doughnuts are distributed to the bakery’s buyers in a timely manner.
Key skills for a manufacturing process planner include:
- Organizational skills
- Communication skills
- An understanding of logistics principles
- Problem-solving skills
Manufacturing Business Plan
Use this manufacturing business plan as your template to start and grow your manufacturing company. This business plan for a manufacturing company includes market analysis, strategy, and more.
Download this Manufacturing Business Plan free for easy editing in Microsoft Word, Google Docs or Apple Pages:
Also Read: MoreBusiness.com’s Free Starting a Business Guide
Table of Contents
1.0 EXECUTIVE SUMMARY
1.1 company.
Titus Mold Manufacturing, Inc. designs prototypes and molds, which are used by production manufacturers to fabricate consumer products. We are a start-up company that developed and patented revolutionary design software called Virtual Design Center. Our initial plan is to create a precision manufacturing facility to produce prototypes and molds for clients. Our goal is to provide our customers with fast turnaround, exceptional quality, unparalleled customer service, and competitive pricing.
1.2 PRODUCTS & SERVICES
We design and manufacture prototypes and molds. By utilizing Virtual Design Center, we will work in real-time with our customers to meet their design needs, which will reduce errors and detect design flaws early in the process. In turn, this will save the customer time and money. We plan to position ourselves as a forward-thinking company that continually invests in new ideas and technologies – unlike our competitors, which are similar mold manufacturing facilities. Because of our unique software, sophisticated technology and efficient processes, we will be in a position to potentially compete on price and quality. As this manufacturing business plan will outline, our unique Virtual Design Center gives us a definitive advantage.
1.3 MARKET ANALYSIS
The U.S. manufacturing industry makes up a substantial portion of the GDP, and the mold-manufacturing sector generates sales of more than $5 billion. Manufacturing drives the U.S. economy more than any other industry. Within that enormous industry, we have identified two strong markets with very high growth potential – automotive parts and medical devices manufacturing. As new car companies respond to shifting consumer demands for more fuel-efficient cars, and as the medical community develops new technologies, the need for new parts, designs and molds grows.
1.4 STRATEGY & IMPLEMENTATION
To achieve our business goals, we will create a high-tech, precision manufacturing facility and will implement highly efficient operations processes. We plan to promote Titus Mold Manufacturing and our proprietary Virtual Design Software with an aggressive, targeted marketing campaign. This will include a media campaign, print and online advertising and a targeted direct-mail campaign. In addition, we will focus heavily on establishing our presence within the industry at relevant trade shows.
1.5 MANAGEMENT
Our leadership team currently consists of Chief Executive Officer John Baker, President Michael Smith, and Vice President Susan Jones. Additional key leaders will include directors of finance, marketing and sales, human resources, information technology and operations. While these positions remain unfilled at this time, we do have several extremely qualified candidates interested in joining with us in this new venture.
1.6 FINANCIAL PLAN
Our Company will earn revenue from the sale of design services and manufactured molds. The attached Income Statement demonstrates that our gross profit margin will exceed 72%, and we will achieve break-even with sales of $XXX,XXX. We expect to reach profitability by the middle of Year 2.
1.7 SOURCES & USE OF FUNDS
Titus Mold Manufacturing, Inc. requires $4,450,000 to launch. At present, we have raised $150,000 in venture capital funds. In addition, co-owners John Baker, Michael Smith and Susan Jones have each invested $100,000 into the company. We are currently seeking funds from outside investors and business loans.
The start-up funds will be used to cover the facility, build-out costs, equipment, software and initial operating costs including payroll, taxes, and utilities.
2.0 COMPANY
2.1 company & industry.
Titus Mold Manufacturing, Inc. is located in Molder, Missouri. Our company designs and manufactures prototypes and molds for use in casting metals or forming other materials, such as plastics, glass or rubber. Our business operates within the manufacturing industry and is classified under NAICS code 333511 – industrial mold manufacturing.
2.2 LEGAL ENTITY & OWNERSHIP
Titus Mold Manufacturing is an S-Corporation that was formally organized in Missouri. The company’s principal owners are John Baker, Michael Smith and Susan Jones, who hold equal shares of ownership in the company.
2.3 COMPANY HISTORY TO DATE
Our company is a new business that will create prototypes and quality molds, utilizing the latest design software, e-commerce technology, high tech machinery and innovative operations processes. As the company’s founders and owners, we have a combined 40 years of experience in software development and the manufacturing industry. Our experience includes product research and development, engineering and production management. After recognizing the need for and value of creating a more efficient customer experience to secure and retain business, we decided to create Titus Mold Manufacturing, Inc.
2.4 FACILITIES
Our company is preparing to lease a manufacturing facility in Molder, Missouri. We are presently operating out of temporary administrative offices at the Barton Business Incubation Center.
We are working with a local realtor and BBIC to identify potential industrial space available for lease. We require a 10-12,000 sq. ft. facility to accommodate product development and engineering, a mold shop, a tool shop, quality assurance area, inventory storage and administrative offices. As the business grows, we intend to add injection-molding capabilities.
2.5 KEY ASSETS
Titus Mold Manufacturing holds a patent for its revolutionary Virtual Design Center (VDC). The VDC combines the best of virtual and in-person presentations and meetings, allowing customers to work in real-time with our design engineers. This allows us to serve clients nationwide.
3.0 PRODUCTS/SERVICES
3.1 description.
Titus Mold Manufacturing, Inc. will make prototypes and molds for the manufacturing of consumer products. A mold, which is usually made from aluminum or steel, is a hollow form that gives a particular shape to a product while it is in a liquid state. The molds are used for products made from plastic, glass, metal or other raw materials.
There are three main phases to manufacturing a prototype or mold. First, engineers and product developers create a design. Titus Mold Manufacturing is able to complete a design from start to finish for a customer. If need be, Titus will work with the customer through the design process via our one of a kind Virtual Design Center. Secondly, we make test molds. We then inspect and test the molds for quality assurance. Finally, we manufacture prototypes and molds based on specific design specifications, using precision machinery to form the desired prototype or mold.
3.2 FEATURES & BENEFITS
Virtual Design Center will be the key to distinguishing and drawing attention to our company. Once we have a particular industry or customer’s attention, we will sell them on our fast turnaround, exceptional quality, unparalleled customer service and competitive pricing.
Obviously, speed, quality, service and price are qualities most of our competitors will list in their mission statement. However, Titus Mold Manufacturing will – from the beginning – invest in top quality, highly sophisticated machinery as well as implement innovative operations policies. These steps will ensure our ability to deliver beyond normal industry standard and surpass our customers’ expectations saving them time and money.
3.3 COMPETITION
Our competitors are companies that provide similar types of design and mold-making services. There are far too many competitors to list specifically in this manufacturing business plan. To their advantage, they have an established customer base. Further, many mold-making companies also have injection-molding machinery, which enables them to manufacture actual products.
However, the vast majority of our competitors are not taking full advantage of current technology, nor are they implementing modern operational systems. Their waste is ultimately passed along to the customer via longer turnaround times and higher overhead costs .
3.4 COMPETITIVE ADVANTAGE/BARRIERS TO ENTRY
By relying on our technology and an activity-based costing system, rather than a time-based system, we will be able to maintain competitive prices and sustain high profitability. Our technology and systematic efficiencies will allow us to have advantages in cost, speed and design capability. Ultimately, these advantages will quickly come to define Titus Mold Manufacturing as an industry leader.
Our Virtual Design Center technology gives us a significant advantage over our competitors, and our patent prevents others from being able to replicate the services we offer.
3.5 DEVELOPMENT
As our company grows, we plan to expand our facility and create an injection-mold manufacturing plant. At that point, we will be able to control all operations in-house from initial design to mold creation and even mass production of the finished products. In addition, we will stay atop technology trends and upgrade equipment and processes as needed and can be afforded. We will also continue to research and pursue shares of existing markets such as packing, defense, electronics and telecommunications and update portions of this manufacturing business plan accordingly.
4.0 MARKET ANALYSIS
4.1 market size.
The US manufacturing sector includes more than 300,000 companies with combined annual sales of about $4 trillion. Furthermore there are approximately 2,500 mold manufacturers with combined annual sales of more than $5 billion. To capture a portion of those sales, Titus Mold Manufacturing will utilize a targeted industry approach to pursue specific, definable, market segments.
4.2 TARGET CUSTOMER
After extensive research, we decided to initially pursue market segments in the automotive and medical devices industries. These are two very distinct markets with very different needs. While the automotive industry’s purchasing decisions are driven primarily by price, the medical device industry focuses on a fast turnaround time and quality to make purchasing decisions.
The U.S. automobile manufacturing industry includes about 160 companies with combined annual revenue of about $250 billion. While the majority of those sales are swallowed up by a handful of major car manufacturers, there are thousands upon thousands of parts needing to be manufactured for each vehicle. By specializing in manufacturing molds for certain parts, we will establish our niche in the market. Our research indicates this is a perfect time to assimilate into this industry as carmakers make dramatic shifts in design and efficiency to address rising fuel costs.
The medical devices industry is by far one of the most forward-thinking, always-evolving industries. Researchers and product developers are continually striving to improve products and procedures. With this constant change and product evolution comes the constant need for new product molds. Couple the advances in medical technology with an increasingly aging population, and it’s clear the healthcare industry as a whole is a solid market and mold manufacturers will reap the benefits.
4.4 SWOT ANALYSIS
The SWOT analysis for this manufacturing business plan is as follows:
- Propriety software (Virtual Design Center)
- Potential for global customer base
- Manufacturing & production expertise
- Software development expertise
- Understanding of emerging technologies
- Understanding of target markets
- Competitive product pricing
- Exceptional quality and customer service
- Implementation of cost saving processes
- No company history
- Small initial customer base
- Lack of leverage with new relationships
Opportunities
- New products & processes
- Bringing new technology into the industry
- Developing a new reputation
- Hiring new talent
- New innovations and applications of our technology
- Impact of new legislation
- Technologies developed by competitors
- Challenges in building a talented staff
- Retaining key staff members
- Market demand fluctuations
5.0 STRATEGY & IMPLEMENTATION
5.1 philosophy.
Titus Mold Manufacturing’s business philosophy is to make the needs of our customers our main priority. It is our mission to provide our customers with fast turnaround, exceptional quality, unparalleled customer satisfaction and competitive pricing. With the introduction of our patented Virtual Design Center program and the unveiling of our modern design and manufacturing facility, we will position Titus Mold Manufacturing as a superbly innovative company and a future industry leader.
To achieve this position, we will implement our company’s plan to create a state-of-the-art mold-manufacturing facility and invest in the most accurate precision machinery available. We will implement the most comprehensive design software and set the highest standards of operational systems and quality control.
5.2 INTERNET STRATEGY
Our plan is to position Titus Mold Manufacturing as a technology-driven innovative company within the mold-manufacturing sector of the manufacturing industry. To do this, we are putting forth a great amount of time and resources into developing a premiere Web site. We are working with a design firm and have secured a domain name – TitusMolds.com. We have already initiated the process of integrating our Virtual Design Center into the site.
In addition to describing our manufacturing processes and design capabilities, we will feature numerous success stories and images of prototypes and molds we have produced. Our site will also include a simple online form to complete for custom quotes as well as a generic form to submit questions and comments.
Our vision is to create a Web site that will become an integral part of our marketing, sales and daily operations. We will use Wix to set up our site. This tool has all of the features we need, including the ability to create and edit the site very quickly. It also has ecommerce and other capabilities. Using Wix will also enable us to save money since we can create the site ourselves and will not have to hire a web designer.
5.3 MARKETING STRATEGY
Titus Mold Manufacturing recognizes the critical importance of marketing. We will require a properly designed and executed marketing plan to ensure market penetration and business success. Until we hire an in-house sales and marketing team, we will work with a marketing and public relations firm. Once a sales and marketing staff is in place, we will reassess the need for an outside firm.
In addition to conveying to our potential customers the fast turnaround, exceptional quality, unparalleled customer service and competitive pricing offered by Titus Mold Manufacturing, we will also position our company as future-minded and a leader in the integration of innovative technology into the mold manufacturing process.
Our marketing plan will include an initial publicity campaign that introduces our company and patented Virtual Design Center. Further, we will launch a comprehensive advertising campaign in automotive manufacturing and medical devise trade publications and related Web sites. The publicity campaign will be closely followed by a direct-mail campaign to targeted customers.
The other main component of our marketing plan will be to attend trade shows which will require booth construction and maintenance, marketing materials such as brochures, and promotional items such as pens with our logo.
To increase local awareness of our company and to foster a positive public perception, we will participate in and sponsor local charity events such as Walk for the Cure and March of Dimes and youth sports teams. We will also reach out to local high schools and colleges to offer internships and promote careers in manufacturing.
5.4 SALES STRATEGY
Titus Mold Manufacturing will build a sales team focused on securing new business in the short and long term. The sales team will be motivated by commissions and performance-based bonuses.
Under the direction of executive management, we will employ an outside sales staff as well as an inside sales staff, which will be cross-trained to handle general customer service calls. The outside sales staff will focus primarily on trade show attendance, comprehensive follow up, relationship building, closing deals, and securing referrals.
5.5 STRATEGIC ALLIANCES
We plan to develop strategic alliances with local and regional injection-molding manufacturing facilities that do not have mold-making capabilities within their facilities. One such alliance has been developed with Hilden Manufacturing Company located within our region. More are developing.
5.6 OPERATIONS
Our facility’s space will be divided in proportion to our needs and will include product development and engineering labs, mold shop, tool shop, quality control and testing area, inventory storage and administrative offices. Each area will be staffed with trained employees and wherever possible factory-floor technicians will be cross-trained. Our administrative offices will include space for executive, marketing and sales, accounting, information technology, security, maintenance, and human resource departments. To become a fully operational mold-manufacturing facility, we will require the following machinery and software.
- Viper, SLA 7000 & SLA 5000
- Eden260, Eden333 & Eden500V
- Vantage, Titan & Maxum
- RTV Tooling
By utilizing the latest precision machinery and software and superior operational and quality control processes such as LEAN Manufacturing, Rapid Prototyping and Manufacturing, and Six Sigma , Titus Mold Manufacturing will control costs while ensuring quality. Additionally, once we are operational, our company will become ISO 9001-2000 certified. Titus will also follow FDA requirements and comply with Medical Directive standards to further ensure quality control.
Operationally, our strengths lie in our knowledge and expertise within the manufacturing industry. We know what fixed assets we require and what regulations we must adhere to. However, while we cannot know for certain the quality of our managerial team at this point, we expect to hire and implement a top notch team. As previously mentioned, we have several promising prospects and will, of course, strive to recruit top talent.
The following is a list of business goals and milestones we wish to accomplish within the next three years.
- Secure necessary funds.
- Locate and lease suitable manufacturing facility.
- Purchase machinery, equipment and supplies.
- Hire skilled employees to complete our team.
- Set up shop and open for business.
- Successfully penetrate targeted markets.
- Secure contracts to achieve projected sales goals.
- Become a profitable company.
- Establish a solid reputation as an industry leader.
Our first major milestones will be securing funds and setting up our business. This is our primary focus right now. In three years, we hope to have established our company in the community and within our industry.
5.8 EXIT STRATEGY
Should management or our investors seek a business exit, there are several options we would be willing to pursue. Our company could most likely be sold to a manufacturing company that does not already have mold manufacturing capabilities. A management buyout could also be pursued once our business credit is firmly established.
6.0 MANAGEMENT ORGANIZATIONAL STRUCTURE
6.1 organizational structure.
Titus Mold Manufacturing understands the importance of a loyal and enthusiastic team to reduce turnover and increase productivity. Our company’s management philosophy will encourage responsibility and mutual respect. While we will present a strong decisive management team, we will also foster an atmosphere of genuine employee appreciation and open communication.
6.2 LEADERSHIP
Our company will be managed and run by our executive staff including Chief Executive Officer John Baker, President Michael Smith, and Vice President Susan Jones, as well as our Board of Directors. Our management staff of directors and supervisors will oversee daily operations. However, as a small manufacturing facility starting out, the CEO, President and VP will be responsible for the majority of purchasing, hiring, training, quality control, and additional day-to-day duties.
Additional key leaders will include directors of finance, marketing and sales, human resources, information technology and operations. While these positions remain unfilled at this time, we do have several extremely qualified candidates interested in joining with us in this new venture.
As we start our mold manufacturing business, we will implement a plan to hire management and production staff first and fill in with mid-level management and administrative staff as our budget and needs change.
6.3 BOARD MEMBERS & ADVISORS
Our Board of Directors is not yet fully formed. CEO John Baker will serve as Chairman. The board will consist of company owners (shareholders), officers and directors.
Duties of the Board of Directors may include:
- Establishing broad company policies and objectives.
- Selecting, appointing, and reviewing the performance of executive staff.
- Insuring the availability of adequate financial resources and approving annual budgets.
- Accounting to the stakeholders for the organization’s performance
We will actively seek individuals to sit on our Board of Directors who will have the ability to add to and advise our organization such as lawyers, accountants, and professionals in the automotive or medical fields.
7.0 FINANCIAL PLAN
7.1 requirements.
Titus Mold Manufacturing, Inc. requires $4,450,000 to launch and operate. We are currently seeking funding from outside investors and business loans. We are also looking into additional options including supplier financing, deferred rent, subleasing space, partnerships, vending and client advance payment.
At this time, we have raised $450,000 in working capital and are seeking the additional funds to start our business. We have raised $150,000 in venture capital funds. In addition, co-owners John Baker, Michael Smith and Susan Jones have each invested $100,000 into the company.
7.2 USE OF FUNDS
The start-up funds will be used to cover operating costs including payroll, taxes, and utilities. Start-up funds will also be used to purchase capital expenditures such as leasehold improvements, software and machinery, which will produce future benefits for the company. Approximately forty percent will be spent on assets, while the other sixty percent will be spent on operations until we realize profitability.
7.3 INCOME STATEMENT PROJECTIONS
The accompanying income statement demonstrates our company’s profitability. Our income shows a gross profit margin of seventy-two percent. Our monthly operating expenses average $116,325. Projected net income will average $54,075 per month in our third year.
After completing a comprehensive break-even analysis, we will achieve our break-even point by the middle of year two.
7.4 CASH FLOW PROJECTIONS
The nature of our business requires that our company collect payment after the product is complete. So we have included the accompanying cash flow statement, which projects our monthly flow of cash. While we expect to reach break-even by our eighteenth month, it will take nearly two years to become cash flow positive.
7.5 BALANCE SHEET
Our balance sheet will depend greatly on our sources of capital. We expect to raise approximately $1.5 million through loans and $2.95 million through equity capital.
Our assets will be comprised of cash, leasehold improvements, equipment, software and other tangible assets.
7.6 ASSUMPTIONS
Our projections are based on the assumption that the manufacturing industry, particularly the medical and automotive industries, will continue to follow present trends. Industry regulation and government legislation is always poised to interfere with business projections, but there are no indications at this time to expect any negative influence to our projections. Additionally, we are not relying on new regulations or the passage of new legislation to enable our company to reach our projected numbers.
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Production Planning in Manufacturing: Best Practices for Production Plans
As the creation of products and services has become more extensive and varied, the manufacturing industry has become more competitive. There are many things to keep an eye on such as material requirements planning, supply chain management and inventory control. Operations continue to become more complex, and this means manufacturing companies require more thorough production planning.
A production plan is the best way to guarantee you deliver high-quality products/services as efficiently as possible.
What Is Production Planning?
Production planning is the process of deciding how a product or service will be manufactured before the manufacturing process begins. In other words, it is how you plan to manage your supply chain, raw materials, employees and the physical space where the manufacturing process takes place.
Production planning is very important for manufacturers as it affects other important aspects of their business such as:
- Supply chain management
- Production scheduling
- Material requirements planning
- Production lead time
- Capacity planning
ProjectManager is a project management software that helps manufacturers cover every aspect of production planning. Plan with Gantt charts, execute with kanban boards and manage your resources along the way. No other software offers sophisticated project and resource management features in one intuitive package. Get started today for free.
Why Is Production Planning Important?
If a manufacturing operation wishes to expand, that evolution demands careful production planning and production scheduling. Someone must take on the responsibility of managing resources and deciding how they will be allocated. This process is a big part of capacity planning —how much can be made in a certain period of time, with the available resources?
Without production planning, it is easy to use too much of a resource for one product and not leave enough for another, or fail to schedule your resources properly, which results in delays that affect your production scheduling. It’s just as easy to let resources go to waste. These issues indicate a lack of efficiency in your production planning process.
No matter the product or service or the size of the operation, production planning is the best way to ensure resources are used appropriately, products and services are high-quality and nothing goes over budget .
Types of Production Planning
Every operation is unique, and the same production plan isn’t right for everyone. In order to get the most from project planning, you need to decide which method is best for your manufacturing process. That said, here’s a quick intro to the different types of production planning.
The job method is often used when manufacturing a single product, for which a unique production plan is created. This production planning method is generally used in smaller-scale productions, but it can also be applied to larger manufacturing facilities. The job method is especially advantageous when a product or service requires specific customizations.
Batch Production Method
Batch production consists in manufacturing goods in groups, instead of being produced individually or through continuous production. This method is useful when manufacturing products on a large scale.
Flow Method
The flow method is a demand-based manufacturing model that minimizes the production lead time by speeding up the production line. The manufacturing process starts based on work orders, and once it starts, it doesn’t stop until all finished goods are produced. This is called continuous production and it’s achieved by using machinery and little intervention to minimize waiting time.
Process Method
The process method is more or less what most people picture when they think about production—an assembly line. With the process method, there will generally be different types of machinery completing separate tasks to put together the finished goods.
Related: 10 Free Manufacturing Templates for Excel
Mass Production Method
The mass production method is primarily focused on creating a continuous flow of identical products. It’s similar to the flow method, but at a much bigger scale, which cuts production costs. When uniformity is just as critical as efficiency, you need to use “standardized processes” to guarantee all products look exactly the same.
What Is a Production Plan?
A production plan is a document that describes how production processes will be executed, and it’s the final outcome of the production planning process. It describes the human resources, raw materials and equipment that will be needed and the production schedule that will be followed.
The person responsible for production planning must also be very familiar with the operation’s inner workings, resources and the products/services they produce. This usually entails collaborating with people on the floor, in the field or in different departments to create products and deliver services.
How to Make a Production Plan
When you set out to create a production plan, make sure to follow these 5 steps to make it as robust as possible.
1. Estimate/Forecast Product Demand
Understanding product demand planning is the best way to decide which product planning method is the best choice for your operation. From here, you’ll be able to estimate which resources are required and how they’ll be used in the manufacturing process.
2. Access Inventory
Accessing inventory is about more than simply taking stock: you should make an inventory management plan so that you don’t experience shortages or let things go to waste. For this step, focus on the inventory control and inventory management techniques you can use to handle inventory in the most efficient way possible.
3. Resource Planning
A successful production plan requires you to be familiar with the resource planning details of the manufacturing process. Note the minimum number of people and raw material requirements necessary to create a product or execute a service. You need to also consider what machines and systems are essential for executing your production plan.
Related: Free Resource Plan Template for Excel
4. Monitor Production
As production takes place, monitor how the results compare to the production schedule and resource management projections. This is something that should continually take place and be documented during the production process. Monitoring production is especially important for the fifth step in the production planning process.
5. Adjust the Plan to Make Production More Efficient in the Future
The final step of production planning is to reflect on the information you gained in step four and strategize what can be done to make the production plan run more smoothly in the future. Production planning is about manufacturing a product or service, yes, but it should also be a learning experience for creating even better production plans for next time.
Common Production Planning Mistakes
As you go through the production planning process, you must stay vigilant of common missteps. Here are three mistakes often made during production planning. Luckily, they can be prevented.
Not Expecting the Unexpected
This means having risk management strategies in place if things go awry. The goal is to never have to employ them, of course, but it’s better to have them and not need them. Production planning is not complete if it doesn’t anticipate risks, issues and changes. When you plan for them, you’re ready to problem solve if and when they happen.
Getting Stuck Behind the Desk
You should work with intelligent production planning tools, but that doesn’t mean you should only rely on an enterprise resource planning software for production planning and not oversee resources and operations in person. When production planning is only done from behind a screen, the end result will not be as informed as it could be. The best production planning is active and collaborative.
Neglecting Equipment
Regardless of the product or service, manufacturing means using tech. In order to get the most from your equipment, you need to take care of it. This means tracking usage and keeping up with regular maintenance. This looks different depending on the industry and product or service, but the principle is the same: continually take care of your equipment before it becomes a problem that will slow down production.
Production Planning Best Practices
No matter what product or service is being manufactured, there are many tried-and-true best practices that set your operation up for success. When creating a production plan, keep these two in mind.
Make Accurate Forecasts
When you don’t properly estimate the demand for your product or service, it is impossible to create a detailed production plan. Demand planning is never static. You need to consider buying trends from previous years, changes in demographics, changes in resource availability and many other factors. These demand planning forecasts are the foundation of skillful production planning.
Know Your Capacity
Capacity planning means knowing the maximum capacity your operation can manage—the absolute most of a product or service it can offer during a period of time. This is the only way to anticipate how much of each resource you will need in order to create X amount of products. When you don’t know the production capacity, your production planning is like taking a shot in the dark.
Use ProjectManager for Production Planning and Scheduling
As the nature of manufacturing goods and services changes, you need modern tools to plan production and make schedules. ProjectManager is an award-winning project management software that offers all the tools you need for excellent production planning and scheduling. With it, you can plan projects, create schedules, manage resources and track changes with one tool.
Plan with Gantt Charts
Manage your product manufacturing across a timeline with our Gantt chart view. With it, you can view your resources (such as raw materials) tracked by cost to make sure you’re never overspending. You can then link any dependent tasks to avoid bottlenecks in your manufacturing.
Get a Birds-Eye-View
To keep your production plan on track, you need to have a high-level view so that you can pinpoint setbacks before or as they occur. Our real-time dashboard collects your data and converts it into colorful graphs and charts that give you at-a-glance analytics.
Easily Measure and Report Your Progress
Any operation will have stakeholders, and they want to be kept in the loop. ProjectManager’s project status reports make it easy to share key data points. They can be generated in a single click, making it simple to generate them before important meetings.
Related Production Planning Content
- How to Make a Production Flow Chart for Manufacturing
- Production Schedule Template
- How to Create a Master Production Schedule (MPS)
Manage every detail of your operation with ProjectManager’s powerful cloud-based project management tools. Our suite of tools is trusted by tens of thousands of teams, from NASA to Volvo, to aid them in the planning, scheduling, tracking and reporting on the progress and performance of their production plans. Our software makes lets you get out from behind your desk and make adjustments on the go. Try it for yourself for free for 30 days!
Related Posts
- 20 Must-Have Project Management Excel Templates and Spreadsheets
- How to Make a Production Flow Chart for Manufacturing Processes (Example Included)
- What Is Lean Manufacturing?
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Manufacturing Business Plan Template
Written by Dave Lavinsky
Manufacturing Business Plan
Over the past 20+ years, we have helped over 7,000 entrepreneurs and business owners create business plans to start and grow their manufacturing businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a manufacturing business plan template step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your manufacturing business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a new manufacturing business, or grow your existing manufacturing business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your manufacturing business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Manufacturing Businesses
With regards to funding, the main sources of funding for a manufacturing business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
Personal savings is the other most common form of funding for a manufacturing business. Venture capitalists will usually not fund a manufacturing business. They might consider funding a manufacturing business with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results. With that said, personal savings and bank loans are the most common funding paths for manufacturing businesses.
How to Write a Business Plan for a Manufacturing Company
If you want to start a manufacturing business or expand your current one, you need a business plan. Below we detail what you should include in each section of your own business plan:
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of manufacturing business you are operating and the status. For example, are you a startup, do you have a manufacturing business that you would like to grow, or are you operating a chain of manufacturing businesses?
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the manufacturing industry. Discuss the type of manufacturing business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing strategy. Identify the key members of your team. And offer an overview of your financial plan.
Company Analysis
In your company analysis, you will detail the type of business you are operating.
There are many types of manufacturing businesses, such as:
- Clothing manufacturing
- Garment manufacturing
- Food product manufacturing
- Diaper manufacturing
- Tile manufacturing
- Toy manufacturing
- Soap and detergent manufacturing
- Mobile accessories manufacturing
- Mattress manufacturing
- Bicycle manufacturing
- Pillow manufacturing
- Brick manufacturing
- Toilet paper manufacturing
- Furniture manufacturing
- Peanut butter manufacturing
- Cosmetics manufacturing
- Footwear manufacturing
In addition to explaining the type of manufacturing business you will operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, number of wholesale contracts, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry or market analysis, you need to provide an overview of the manufacturing industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the manufacturing industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section:
- How big is the manufacturing industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your manufacturing business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section must detail the customers you serve and/or expect to serve.
The following are examples of target market segments: wholesalers, other manufacturers, exports, retailers.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of manufacturing business you operate. Clearly, retailers would respond to different marketing promotions than export markets, for example.
Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most manufacturing businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other manufacturing businesses.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes manufacturers in other niches, as well as those vertically integrated businesses that make their own product. You need to mention such competition as well.
With regards to direct competition, you want to describe the other manufacturing businesses with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What types of products do they manufacture?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide high quality manufacturing practices?
- Will you provide services that your competitors don’t offer?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a manufacturing business, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type of manufacturing company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to manufacturing, will you provide R&D, design, prototyping or any other services?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.
Place : Place refers to the location of your manufacturing company. Document your location and mention how the location will impact your success. For example, is your manufacturing business located near a distribution hub, etc. Discuss how your location might be the ideal location for your customers.
Promotions : The final part is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local websites
- Social media marketing
- Local radio advertising
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your manufacturing business, including sourcing inputs, designing processes, managing production, coordinating logistics and meeting with potential buyers.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to secure your 1,000 th contract, or when you hope to reach $X in revenue. It could also be when you expect to expand your manufacturing business to a new city.
Management Team
To demonstrate your manufacturing business’ ability to succeed, a strong team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in managing manufacturing businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in manufacturing or successfully running small businesses.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you offer short-run production, or will you focus strictly on long-run? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your manufacturing business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a manufacturing business:
- Location build-out including design fees, construction, etc.
- Cost of equipment and supplies
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your production facility blueprint, or capabilities specifications.
Putting together a business plan for your manufacturing business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the manufacturing industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful manufacturing business.
Manufacturing Business Plan FAQs
What is the easiest way to complete my manufacturing business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Manufacturing Business Plan.
What is the Goal of a Business Plan's Executive Summary?
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of manufacturing business you are operating and the status; for example, are you a startup, do you have a manufacturing business that you would like to grow, or are you operating a chain of manufacturing businesses?
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Manufacturing Business Plan
Looking for the perfect manufacturing business plan example for your new manufacturing fabrication or production business You are at the right place We have created this Baggit manufacturing business plan example to help you get started with your business plan
If you are planning to start a new manufacturing , fabrication, or production business, the first thing you will need is a business plan. Use our Baggit – manufacturing business plan example created using upmetrics business plan software to start writing your business plan in no time.
Before you start writing your business plan for your new manufacturing business, spend as much time as you can reading through some examples of manufacturing, fabrication, or production business plans.
Reading some sample business plans will give you a good idea of what you’re aiming for and also it will show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.
We have created this manufacturing business plan example for you to get a good idea about how a perfect manufacturing business plan should look like and what details you will need to include in your stunning business plan.
Manufacturing Business Plan Example Outline
This is the standard manufacturing business plan outline which will cover all important sections that you should include in your business plan.
- Business Profile Summary
- Market Research Summary
- Marketing Summary
- Business Description
- Unique Value Proposition
- Company History
- Legal Structure
- Vision & Mission
- Professional Advisors
- Goals & Objectives
- Premium Sustainable Leather Designer Bag
- Alternate Sustainable Material Bag
- Heirloom Limited Edition Bag
- Basic Purse
- Industry Profile & Outlook
- Local Market
- Ci Comme Ca
- Target Market
- Customer Survey Summary
- Premium Sustainable Leather Material Bag
- Digital Marketing
- In-Person Marketing
- Print Marketing
- Location(s)
- Legal Issues
- Insurance Issues
- Jennifer Martinez
- Packaging/Shipping/Handling
- Manufacturing Assistant
- Marketing Designer
- Production Flow and Delivery Method of Products and Services
- Risk Assessment
- Breakeven analysis
- Projected Profit and Loss
- Projected Cash Flow
- Projected Balance Sheet
After getting started with upmetrics , you can copy this manufacturing business plan example into your business plan and modify the required information and download your manufacturing business plan pdf and doc file . It’s the fastest and easiest way to start writing your business plan.
What to include in a manufacturing business plan?
Now before you go ahead and write your plan, we’ll discuss a few main sections that’ll help you write a well-rounded plan:
1. Executive Summary
The executive summary section of your business plan sums up everything that your business stands for. It consists of a summary of all the major sections of your business plan including mission and vision statement, market research, marketing, and finances.
If you want to explain your business idea to someone in under 10 minutes, an executive summary would do the job. If you plan on getting funded, write a good and well-rounded executive summary as this is probably the only section your investor would read.
For example, if you are going to manufacture bags your executive summary would consist of a brief description of your target audience, your product, major points of market analysis and financial plan, your funding requirements and how would you provide a return on that funding.
2. Business description
This section consists of information about your company ranging from your product, the size of your team to your legal structure. It describes the aims and objectives of your business and what you do to fulfill them.
This section sums up the structural and legal aspects of your business. It serves as a reference for whenever you want to make changes to your company’s structure.
Continuing the above example of a bag manufacturing unit, your business description would consist of the following things:
- The part of bag production your unit participates in.
- The number of employees and their position in your company.
- The legal structure of your business .
- The market needs your business fulfills.
3. Product Description
This section consists of a detailed description of your product, the market it caters to, and your pricing strategy .
This section helps you define your product clearly and concisely. It also helps your customers understand your product and its purpose better.
For example, as a bag manufacturing unit, you will note down the size, the material, and the type of bags you manufacture.
4. Market Research
This section would consist of everything you can find out about your industry through research. It consists of an overview of your industry, market size, major competitors, and target market.
This section comes in handy for formulating your marketing strategy and for finding your USP. Moreover, it helps you optimize your product as per the tastes and preferences of your customers.
For example, like a bag manufacturing business you’ll research about the bag industry, the local market, what market segments buy bags, out of them who will be your target audience, and finally what kind of bags your target audience prefers.
5. Sales and Marketing Strategy
This section would consist of the mediums you will use for reaching out to your target audience . It would also consist of methods of highlighting your USP for attracting a customer’s attention towards your product.
This section is necessary for letting your target audience know about your existence. You can promote your product through various mediums like print, advertising, digital media, etc.
For example, like a bag manufacturing business, your target audience will be bag wholesalers and retailers, you’ll have to find what kind of bags they prefer buying, what terms and conditions do they prefer, and what medium you can use for reaching out to them.
While selling your bags you must always try to find a middle ground between the deal the wholesaler or retailer wants and the one you are willing to offer.
6. Operations Plan
Your operations plan consists of your goals and aims for your business, as well as the ways for achieving them. It typically describes what an average day at your business would look like, and what target would your daily business activities help in fulfilling.
Your operations plan helps you stay organized as a business. It also helps you manage your business smoothly and efficiently.
Continuing the above example your operations plan would consist of the number of bags you’ll manufacture per day, the sales and marketing you’ll carry out on a daily, weekly, or bi-weekly basis, etc.
7. Financial Plan
The financial plan section consists of your funding requirements, projected balance sheet , cash flow , and profits.
A good financial plan helps your business in becoming a profitable one. Moreover, it keeps your business afloat during difficult times.
As a manufacturing business, you will include your cost of production, the number of units you’ll have to sell to reach the break-even point , and how you will optimize the production cost and other miscellaneous costs to make your business a profitable one.
Manufacturing business plan summary
In conclusion, a manufacturing business plan can help you decide everything ranging from your production to marketing and pricing strategy.
Moreover, it eliminates the hassles of doing a business and helps you manage your business better. It also helps you recognize loopholes in your ideas and way of working.
Above all, a business plan prepares you equally for threats and opportunities. So if you want to start your manufacturing business, go ahead and start planning.
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We have plenty of free business planning resources available to help you with your planning. You can download our resources to learn all about business planning.
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Getting started: A guide to creating a manufacturing business plan
Thank you for downloading, and happy manufacturing!
Every day people are trying and failing at entrepreneurism.
The journey is a difficult one, and the chances of success are slim. Those that succeed sometimes have a brilliant idea, while others have a wealth of resources. The one commonality among all successful entrepreneurs is that they had a manufacturing business plan.
You need to know where you are going, how you will get there, and what you will do when you arrive. This is especially important for those in the manufacturing industry because of the significant amount of forethought required.
Even if you are leveraging digital solutions to minimize the amount of time, money, and effort required to bring your product to market, you will still need a plan. This is not an area where you can wing it and hope for the best.
Below, we will examine the basics of a manufacturing business plan, what is necessary to include, how to create one for your own company, and some common mistakes that you should avoid.
Table of contents:
What is a manufacturing business plan, why does a manufacturing company need a business plan, what are the key components of a business plan, how to write a business plan for a manufacturing company, common mistakes to avoid.
A manufacturing business plan is a formal document that outlines the goals and objectives of your business. It includes detailed information about your:
- Products or services
- Target market
- Marketing strategy
- Financial projections
- Operational details
The purpose of a business plan is to give you a roadmap to follow as you build and grow your business. It forces you to think through every aspect of your venture and identify potential problems or roadblocks before they happen.
Manufacturing business plans can also be used to attract investors or secure funding from lenders. If you are looking for outside financing, your business plan needs to be even more detailed and include information on your management team, financial history, and expected growth.
Ideally, you should update your business plan yearly to ensure that it remains relevant and accurate. As your business grows and changes, so too should your plan.
No matter how simple or complex your ideas may be, you need a plan, or they will never become a reality. A business plan will clearly understand your costs, competition, and target market. It will also help you to set realistic goals and track your progress over time.
Let’s look at a manufacturing strategy example. You have a great idea that you think will revolutionize the automotive industry . Your new safety harness will be made from a lightweight, yet incredibly strong, material that cannot be cut or torn. You are confident that your product will be in high demand and generate a lot of revenue.
But before you walk into Ford or Toyota to try and get a purchase order , you need to have a plan. You must know:
- How much will it cost to produce your product
- How many units do you need to sell to break even
- Who is your target market is
- What is your competition selling
- How will you reach your target market
You also need to clearly understand the regulatory landscape and what it takes to bring a new product to market. All of this information (and more) should be included in your business plan.
This is not just a document that you create and forget about. It is a living, breathing tool that should be used to guide your actions as you build and grow your business.
Every manufacturing business plan will be different, but almost always, they will include the same five components:
Executive summary
Company description, products and services, market analysis.
- Financial plan
Let’s take a closer look.
The executive summary is the first section of your business plan, but it is typically written last. This is because it should be a concise overview of everything that follows, and you can only do that once you have completed the rest of your plan.
Include the following in your executive summary:
- The problem that your product or service solves
- Your target market
- Your unique selling proposition (what makes you different from your competitors?)
- Your manufacturing business model (how will you make money?)
- Your sales and marketing strategy
- A brief overview of your financial projections
Someone should be able to quickly scan through your executive summary and have a pretty good understanding of what your business is and how it plans to be successful.
This is where you can get a bit more creative, explaining your company’s history, mission, and values. You will also include information on your team or management structure.
It can be simple but should inspire faith in your ability to execute your business plan.
You will need to provide a detailed description of your product or service, as well as any unique features or benefits that it offers. You should also include information on your manufacturing process and quality control procedures.
If you have any patents or proprietary technology, they should be listed here as significant assets for your business.
For example, let’s say you are planning on creating a brand-new line of disposable coffee cups. The dimensions, materials, and other specifications would be listed here, along with any unique benefits (such as being made from recycled materials).
You might also include information on your manufacturing process, such as the fact that the cups will be produced in a certified clean room or that you will employ workers local to where the product is sold.
Chances are, you started down this path because you realized that there was a market opportunity for your product or service. In this section, you will need to provide detailed information on the opening, as well as the analysis that convinced you to pursue it.
This should include:
- Market size (current and projected)
- Key market segments
- Customer needs and wants
- Competitive landscape
This is where you will need to do your homework, as you will be justifying your business decision to enter this particular market. The more data and analysis you can provide, the better.
For our coffee cup example, the market analysis might include:
- Information on how many cups are used every day
- Projected growth
- Key segments (such as office workers or on-the-go consumers)
- Customer needs (such as convenience or sustainability)
It would also examine the competitive landscape, including both direct and indirect competitors.
Financial plan
You’re in this to make money, and so are your potential investors. In this section, you will need to provide detailed information on your manufacturing business model and how it will generate revenue. This should include:
- Initial investment
- Sales forecast
- Carrying costs
- Pricing strategy
- Expense budget
You will also need to provide information on your long-term financial goals, such as profitability or break-even point. Discuss production line details, inventory management strategies , and other factors impacting your bottom line.
The process of creating a business plan for a manufacturing company is similar to any other type of business. However, there are some key considerations to keep in mind.
First, you need to understand your industry and what it will take to be successful in it. This includes understanding the competitive landscape, the costs of goods sold , and the margins you can expect to achieve.
You also need to have a clear understanding of your target market and what needs or wants your product or service will address. This market analysis should include information on your target customer’s demographics, psychographics, and buying habits.
While there will be many things specific to your company, here are five questions to answer for each of the sections listed above.
Executive summary:
- What is the problem that your company will solve?
- How will your company solve that problem?
- Who are your target customers?
- What are your key competitive advantages?
- What is your business model?
Company description:
- What is the legal structure of your company?
- What are your company’s core values?
- What is your company’s history?
- Who are the key members of your management team?
- Where is your manufacturing facility located?
Products and services:
- What product or service does your company offer?
- How does your product or service solve the problem that your target market has?
- What are the key features and benefits of your product or service?
- How is your product or service unique from your competitors?
- What is the production process for your product or service?
Market analysis:
- Who is your target market?
- What needs or wants does your target market have that your product or service will address?
- What is the size of your target market?
- How do you expect the needs of your target market to change in the future?
- Who are your key competitors, and how do they serve the needs of your target market?
Financial plan:
- What are the start-up costs for your company?
- How will you finance your start-up costs?
- What are your monthly operating expenses?
- What is your sales forecast for the first year, and how does that compare to your industry’s average sales growth rate?
- What are your gross margin and profit targets?
Even if you do nothing but answer these questions, you’ll be well on your way to creating a thorough manufacturing business plan.
How to stabilize your growth
However, new manufacturing entrepreneurs often fall into a handful of traps when creating their business plans.
- Not doing enough research – You can’t know everything about your industry, but you should do your best to understand as much as you can before writing your business plan. This means talking to experts, reading trade publications, and studying the competition
- Not being realistic – It’s important to be optimistic when starting a new business, but you also need to be realistic. This is especially true when it comes to financial projections. Don’t overestimate the amount of revenue you will generate or underestimate the costs of goods sold
- Not having a clear understanding of your target market – You need to know who you are selling to and what needs or wants your product or service will address. This market analysis should include information on your target customer’s demographics, psychographics, and buying habits
- Failing to understand your competition – You need to know who your competitors are, what they are offering, and how you can differentiate yourself. This information will be critical in developing your marketing strategy
- Not having a clear vision for the future – Your manufacturing business plan should include a section on your long-term goals and objectives. What does your company hope to achieve in the next five years? Ten years? Twenty years?
Creating a business plan for manufacturing can be simple. It can be quite simple if you break it down into smaller pieces.
Once you have it in place, staying on track can be quite a bit more difficult. By using ERP software like Katana , you can track all of your key metrics in real time, avoid any potential issues, and make course corrections as needed.
To start following your plan and creating a successful manufacturing company, try out Katana’s 14-day free trial today.
- Manufacturing guide
- 1.1. Production vs manufacturing
- 1.2. Production scheduling software
- 1.3. Production tracking software
- 2.1. How to manufacture a product
- 2.2. Manufacturing best practices
- 2.3. A guide to creating a manufacturing business plan
- 2.4. Manufacturer e-commerce
- 2.5. Marketing for manufacturers
- 2.6. Manufacturing business processes
- 2.7. Small business manufacturing software
- 3.1. Job shop manufacturing
- 3.2. Production quality control checklist
- 4.1. Just-in-time (JIT) manufacturing
- 4.2. Tips to reduce manufacturing waste
- 5. Light manufacturing
- 6. Advanced manufacturing
- 7. IoT in manufacturing
- 8.1. Manufacturing execution system (MES)
- 9.1. Manufacturing overhead formula
- 9.2. Manufacturing inventory software
- 10. Good manufacturing practices (GMP)
- 11.1. MRP in supply chain management
- 11.2. Best MRP software
- 12.1. Best ERP software for manufacturing
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Manufacturing Process Planning
What is manufacturing process planning.
Manufacturing process planning is an aspect of product lifecycle management (PLM) that helps engineers to author, simulate, and manage manufacturing information while collaborating to align manufacturing plans with product design. Manufacturing process planning includes operation sequencing, machining process planning, assembly process planning, and assembly line planning, as well as the communication of plans throughout the organization and extended enterprise.
Many manufacturing companies today face the competitive challenge of getting more customized, high-quality products to market faster than ever before. This high-mix, low-volume environment makes the task of manufacturing planning and collaboration highly complex – and even more so for companies that address the challenge by distributing production across multiple plants and suppliers, often in multiple geographic locations.
While many companies still attempt to resolve the needs of manufacturing planning process within their enterprise resource planning (ERP) systems or with a spreadsheet or CAD-based process plans, these solutions fail to offer the scalability and extensibility needed to address today’s manufacturing demands. Manufacturing process planning software, on the other hand, gives manufacturers the ability to align assembly plans quickly and intelligently in support of frequently changing product configurations.
Manufacturing process planning software helps design and manufacturing engineers to concurrently develop product and manufacturing process definitions. This ensures that manufacturing constraints are reconciled during product design and vice versa. Importantly, this PLM software tool connects all members of the design/build process – from design, engineering, and manufacturing to plants and suppliers – into one virtual enterprise.
Manufacturing engineers and shop floor personnel can leverage manufacturing process planning.
Manufacturing process planning functions
Providing close collaboration between engineering, manufacturing, and execution, manufacturing process planning software uses PLM workflow, change management, and configuration capabilities to create and manage the manufacturing bill of materials (MBOM) and the bill of process (BOP) for each product. The software also helps manufacturers to standardize and reuse assembly planning across multiple plants and production lines.
To put it succinctly, the software enables manufacturers to generate and communicate the information needed to know what to make and how to make it. Functions include:
MBOM and EBOM reconciliation – Because manufacturing process planning is integrated with product development on a PLM platform, BOM accountability check tools in the software ensure that engineering and manufacturing BOMs are up to date with the latest product design or process changes.
BOP creation and maintenance – Manufacturing process planning software provides the means to create processes and operations within the BOP and assign relevant parts and assemblies from the MBOM, as well as tools and resources from the bill of equipment (BOE), to specific operations. The software also helps keep engineering and manufacturing in sync by communicating changes from product engineering to be reflected in the BOP.
Line balancing – Manufacturing process planning software provides time management and balancing tools, including display of rolled-up times for operations, stations, and operators, as well as cycle time and wait time in the plan. It supports lean initiatives through visibility of value-added and nonvalue-added activities.
Creation of shop floor work instructions – Engineers can author electronic work instructions for operations under the BOP. The manufacturing process planning software links textual instructions to reference parts, resources, and visual aids, including 3D graphical representations, to provide shop floor personnel with accurate, and clear guidance.
Benefits of manufacturing and assembly process planning
Manufacturing process planning helps manufacturers to evaluate alternative manufacturing scenarios, maximize resource utilization, and optimize throughput from the very beginning of the product lifecycle. This process results in the implementation of the best production strategies.
Additional benefits:
Flexibility to quickly shift production
Greater production efficiencies
Consistent quality across multiple production lines or plants
Reduced time to market
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Stellar Food for Thought
[Infographic] 4 Steps in Developing a Manufacturing Plan
- Food process & packaging engineering
- Strategic planning
![[Infographic] 4 Steps in Developing a Manufacturing Plan: Strategic planning for food processors series](https://stellarfoodforthought.net/wp-content/uploads/2015/10/4-steps-in-developing-a-manufacturing-plan.jpg "manufacturing process in business plan")
A manufacturing plan is a key piece of your food business’ overall strategic plan. Your manufacturing plan is a clear set of actions driven by gaps and discoveries from your manufacturing analysis, or the analysis of your business’ manufacturing processes.
It defines what your manufacturing strategy will look like in the future, whether it’s multiple facilities, renovations or even consolidating operations or products.
The goal is to ensure the appropriate technology is in place and to optimize current production practices to meet your sales goals. Developing the manufacturing plan helps identify where constraints exist and highlights areas to improve production efficiency.
![[Infographic] 4 Steps in Developing a Manufacturing Plan: Strategic planning for food processors series](https://stellarfoodforthought.net/wp-content/uploads/2015/10/4-steps-in-developing-a-manufacturing-plan-822x1024.jpg "manufacturing process in business plan")
To learn more about strategic planning, download our e-book The Strategic Planning Guide for Food Processors.
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