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Production Plan in Business Plan: A Comprehensive Guide to Success

Last Updated:  

February 26, 2024

In any business venture, a solid production plan is crucial for success. A production plan serves as a roadmap that outlines the steps, resources, and strategies required to manufacture products or deliver services efficiently. By carefully crafting a production plan within a business plan, entrepreneurs can ensure optimal utilisation of resources, timely delivery, cost efficiency, and customer satisfaction. In this article, we will delve into the intricacies of creating an effective production plan in a business plan , exploring its key components, strategies, and the importance of aligning it with overall business objectives .

Key Takeaways on Production Plans in Business Planning

• A production plan : a detailed outline that guides efficient product manufacturing or service delivery.
• Importance of a production plan : provides a roadmap for operations, optimises resource utilisation, and aligns with customer demand.
• Key components : demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance.
• Strategies : lean manufacturing, JIT inventory, automation and technology integration, supplier relationship management, and continuous improvement.
• Benefits of a well-executed production plan : improved efficiency, reduced costs, enhanced product quality, and increased profitability.

What is a Production Plan?

A production Seamless Searches plan is a detailed outline that specifies the processes, resources, timelines, and strategies required to convert raw materials into finished goods or deliver services. It serves as a blueprint for the entire production cycle, guiding decision-making and resource allocation. The production plan considers factors such as demand forecasting, capacity planning, inventory management, and quality assurance to ensure efficient operations and optimal customer satisfaction.

Why is a Production Plan Important in a Business Plan?

The inclusion of a production plan in a business plan is vital for several reasons. First and foremost, it provides a clear roadmap for business operations, helping entrepreneurs and managers make informed decisions related to production processes. A well-developed production plan ensures that resources are utilised efficiently, minimising wastage and optimising productivity.

Additionally, a production plan allows businesses to align their production capabilities with customer demand. By forecasting market trends and analysing customer needs, businesses can develop a production plan that caters to current and future demands, thus avoiding overstocking or understocking situations.

Furthermore, a production plan helps businesses enhance their competitive advantage. By implementing strategies such as lean manufacturing and automation, companies can streamline their production processes, reduce costs, improve product quality, and ultimately outperform competitors.

Key Components of a Production Plan

To create an effective production plan, it is crucial to consider several key components. These components work together to ensure efficient operations and successful fulfilment of customer demands. Let's explore each component in detail.

Demand Forecasting

Demand forecasting is a critical aspect of production planning. By analysing historical data, market trends, and customer behaviour, businesses can predict future demand for their products or services. Accurate demand forecasting allows companies to optimise inventory levels, plan production capacity, and ensure timely delivery to customers.

One approach to demand forecasting is quantitative analysis, which involves analysing historical sales data to identify patterns and make predictions. Another approach is qualitative analysis, which incorporates market research, customer surveys, and expert opinions to gauge demand fluctuations. By combining both methods, businesses can develop a robust demand forecast, minimising the risk of underproduction or overproduction. Utilising a free notion template for demand forecasting can further streamline this process, allowing businesses to organise and analyse both quantitative and qualitative data efficiently in one centralised location.

Capacity Planning

Capacity planning involves determining the optimal production capacity required to meet projected demand. This includes assessing the production capabilities of existing resources, such as machinery, equipment, and labour, and identifying any gaps that need to be addressed. By conducting a thorough capacity analysis, businesses can ensure that their production capacity aligns with customer demand, avoiding bottlenecks or excess capacity.

An effective capacity plan takes into account factors such as production cycle times, labour availability, equipment maintenance, and production lead times. It helps businesses allocate resources efficiently, minimise production delays, and maintain a consistent level of output to meet customer expectations.

Inventory Management

Efficient inventory management is crucial for a successful production plan. It involves balancing the cost of holding inventory with the risk of stockouts. By maintaining optimal inventory levels, businesses can reduce carrying costs while ensuring that sufficient stock is available to fulfil customer orders.

Inventory management techniques, such as the Economic Order Quantity (EOQ) model and Just-in-Time (JIT) inventory system, help businesses strike the right balance between inventory investment and customer demand. These methods consider factors such as order frequency, lead time, and carrying costs to optimise inventory levels and minimise the risk of excess or insufficient stock.

Resource Allocation

Resource allocation plays a pivotal role in a production plan. It involves assigning available resources, such as labour, materials, and equipment, to specific production tasks or projects. Effective resource allocation ensures that resources are utilised optimally, avoiding underutilisation or overutilisation.

To allocate resources efficiently, businesses must consider factors such as skill requirements, resource availability, project timelines, and cost constraints. By conducting a thorough resource analysis and implementing resource allocation strategies, businesses can streamline production processes, minimise bottlenecks, and maximise productivity.

Quality Assurance

Maintaining high-quality standards is essential for any production plan. Quality assurance involves implementing measures to monitor and control the quality of products or services throughout the production process. By adhering to quality standards and conducting regular inspections, businesses can minimise defects, ensure customer satisfaction, and build a positive brand reputation.

Quality assurance techniques, such as Total Quality Management (TQM) and Six Sigma , help businesses identify and rectify any quality-related issues. These methodologies involve continuous monitoring, process improvement, and employee training to enhance product quality and overall operational efficiency.

In addition to the core components of a production plan, it's also important for businesses to consider the broader aspects of their business strategy, including marketing and advertising. Understanding the costs and returns of different marketing approaches is crucial for comprehensive business planning. For instance, direct response advertising costs can vary significantly, but they offer the advantage of measurable responses from potential customers. This type of advertising can be a valuable strategy for businesses looking to directly engage with their target audience and track the effectiveness of their marketing efforts.

Strategies for Developing an Effective Production Plan

Developing an effective production plan requires implementing various strategies and best practices. By incorporating these strategies into the production planning process, businesses can optimise operations and drive success. Let's explore some key strategies in detail.

Lean Manufacturing

Lean manufacturing is a systematic Seamless Searches approach aimed at eliminating waste and improving efficiency in production processes. It emphasises the concept of continuous improvement and focuses on creating value for the customer while minimising non-value-added activities.

By adopting lean manufacturing principles, such as just-in-time production, standardised work processes, and visual management, businesses can streamline operations, reduce lead times, and eliminate unnecessary costs. Lean manufacturing not only improves productivity but also enhances product quality and customer satisfaction.

Just-in-Time (JIT) Inventory

Just-in-Time (JIT) inventory is a strategy that aims to minimise inventory levels by receiving goods or materials just when they are needed for production. This strategy eliminates the need for excess inventory storage, reducing carrying costs and the risk of obsolete inventory.

By implementing a JIT inventory system, businesses can optimise cash flow, reduce storage space requirements, and improve overall supply chain efficiency. However, it requires robust coordination with suppliers, accurate demand forecasting, and efficient logistics management to ensure timely delivery of materials.

Automation and Technology Integration

Automation and technology integration play a crucial role in modern production planning. By leveraging technology, businesses can streamline processes, enhance productivity, and reduce human error. Automation can be implemented in various aspects of production, including material handling, assembly, testing, and quality control.

Continuous Improvement

Continuous improvement is a fundamental principle of effective production planning. It involves regularly evaluating production processes, identifying areas for improvement, and implementing changes to enhance efficiency and quality.

By fostering a culture of continuous improvement, businesses can drive innovation, optimise resource utilisation, and stay ahead of competitors. Techniques such as Kaizen, Six Sigma, and value stream mapping can help businesses identify inefficiencies, eliminate waste, and streamline production workflows.

Frequently Asked Questions (FAQs)

What is the role of a production plan in business planning.

A1: A production plan plays a crucial role in business planning by providing a roadmap for efficient production processes. It helps align production capabilities with customer demand, optimise resource utilisation, and ensure timely delivery of products or services.

How does a production plan affect overall business profitability?

A2: A well-developed production plan can significantly impact business profitability. By optimising production processes, reducing costs, and enhancing product quality, businesses can improve their profit margins and gain a competitive edge in the market.

What are the common challenges faced in production planning?

A3: Production planning can present various challenges, such as inaccurate demand forecasting, capacity constraints, supply chain disruptions, and quality control issues. Overcoming these challenges requires robust planning, effective communication, and the implementation of appropriate strategies and technologies.

What is the difference between short-term and long-term production planning?

A4: Short-term production planning focuses on immediate production requirements, such as daily or weekly schedules. Long-term production planning, on the other hand, involves strategic decisions related to capacity expansion, technology investments, and market expansion, spanning months or even years.

How can a production plan be adjusted to accommodate changes in demand?

A5: To accommodate changes in demand, businesses can adopt flexible production strategies such as agile manufacturing or dynamic scheduling. These approaches allow for quick adjustments to production levels, resource allocation, and inventory management based on fluctuating customer demand.

In conclusion, a well-crafted production plan is essential for business success. By incorporating a production plan into a comprehensive business plan, entrepreneurs can optimise resource utilisation, meet customer demands, enhance product quality, and drive profitability. Through effective demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance, businesses can streamline production processes and gain a competitive edge in the market.

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10.2 The Production Process: How Do We Make It?

• What types of production processes do manufacturers and service firms use?

In production planning, the first decision involves which type of production process —the way a good or service is created—best fits with company goals and customer demand. An important consideration is the type of good or service being produced, because different goods may require different production processes. In general, there are three types of production: mass production, mass customization, and customization. In addition to production type, operations managers also classify production processes in two ways: (1) how inputs are converted into outputs and (2) the timing of the process.

One for All: Mass Production

Mass production , manufacturing many identical goods at once, was a product of the Industrial Revolution. Henry Ford ’s Model-T automobile is a good example of early mass production. Each car turned out by Ford ’s factory was identical, right down to its color. If you wanted a car in any color except black, you were out of luck. Canned goods, over-the-counter drugs, and household appliances are other examples of goods that are mass-produced. The emphasis in mass production is on keeping manufacturing costs low by producing uniform products using repetitive and standardized processes. As products became more complicated to produce, mass production also became more complex. Automobile manufacturers, for example, must now incorporate more sophisticated electronics into their car designs. As a result, the number of assembly stations in most automobile manufacturing plants has increased.

Just for You: Customizing Goods

In mass customization , goods are produced using mass-production techniques, but only up to a point. At that point, the product or service is custom-tailored to the needs or desires of individual customers. For example, American Leather , a Dallas-based furniture manufacturer, uses mass customization to produce couches and chairs to customer specifications within 30 days. The basic frames in the furniture are the same, but automated cutting machinery precuts the color and type of leather ordered by each customer. Using mass-production techniques, they are then added to each frame.

Customization is the opposite of mass production. In customization, the firm produces goods or services one at a time according to the specific needs or wants of individual customers. Unlike mass customization, each product or service produced is unique. For example, a print shop may handle a variety of projects, including newsletters, brochures, stationery, and reports. Each print job varies in quantity, type of printing process, binding, color of ink, and type of paper. A manufacturing firm that produces goods in response to customer orders is called a job shop .

Some types of service businesses also deliver customized services. Doctors, for instance, must consider the illnesses and circumstances of each individual patient before developing a customized treatment plan. Real estate agents may develop a customized service plan for each customer based on the type of house the person is selling or wants to buy. The differences between mass production, mass customization, and customization are summarized in Exhibit 10.5 .

Converting Inputs to Outputs

As previously stated, production involves converting inputs (natural resources, raw materials, human resources, capital) into outputs (products or services). In a manufacturing company, the inputs, the production process, and the final outputs are usually obvious. Harley-Davidson , for instance, converts steel, rubber, paint, and other inputs into motorcycles. But the production process in a service company involves a less obvious conversion. For example, a hospital converts the knowledge and skills of its medical personnel, along with equipment and supplies from a variety of sources, into health care services for patients. Table 10.1 provides examples of the inputs and outputs used by various other businesses.

There are two basic processes for converting inputs into outputs. In process manufacturing , the basic inputs (natural resources, raw materials) are broken down into one or more outputs (products). For instance, bauxite (the input) is processed to extract aluminum (the output). The assembly process is just the opposite. The basic inputs, like natural resources, raw materials, or human resources, are either combined to create the output or transformed into the output. An airplane, for example, is created by assembling thousands of parts, which are its raw material inputs. Steel manufacturers use heat to transform iron and other materials into steel. In services, customers may play a role in the transformation process. For example, a tax preparation service combines the knowledge of the tax preparer with the client’s information about personal finances in order to complete the tax return.

Production Timing

A second consideration in choosing a production process is timing. A continuous process uses long production runs that may last days, weeks, or months without equipment shutdowns. This is best for high-volume, low-variety products with standardized parts, such as nails, glass, and paper. Some services also use a continuous process. Your local electric company is an example. Per-unit costs are low, and production is easy to schedule.

In an intermittent process , short production runs are used to make batches of different products. Machines are shut down to change them to make different products at different times. This process is best for low-volume, high-variety products such as those produced by mass customization or customization. Job shops are examples of firms using an intermittent process.

Although some service companies use continuous processes, most service firms rely on intermittent processes. For instance, a restaurant preparing gourmet meals, a physician performing surgical procedures, and an advertising agency developing ad campaigns for business clients all customize their services to suit each customer. They use the intermittent process. Note that their “production runs” may be very short—one grilled salmon or one physical exam at a time.

Concept Check

• Describe the different types of production processes.
• How are inputs transformed into outputs in a variety of industries?

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How To Write the Operations Plan Section of the Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Stage of Development Section

Production process section, the bottom line, frequently asked questions (faqs).

The operations plan is the section of your business plan that gives an overview of your workflow, supply chains, and similar aspects of your business. Any key details of how your business physically produces goods or services will be included in this section.

You need an operations plan to help others understand how you'll deliver on your promise to turn a profit. Keep reading to learn what to include in your operations plan.

Key Takeaways

• The operations plan section should include general operational details that help investors understand the physical details of your vision.
• Details in the operations plan include information about any physical plants, equipment, assets, and more.
• The operations plan can also serve as a checklist for startups; it includes a list of everything that must be done to start turning a profit.

In your business plan , the operations plan section describes the physical necessities of your business's operation, such as your physical location, facilities, and equipment. Depending on what kind of business you'll be operating, it may also include information about inventory requirements, suppliers, and a description of the manufacturing process.

Keeping focused on the bottom line will help you organize this part of the business plan.

Think of the operating plan as an outline of the capital and expense requirements your business will need to operate from day to day.

You need to do two things for the reader of your business plan in the operations section: show what you've done so far to get your business off the ground and demonstrate that you understand the manufacturing or delivery process of producing your product or service.

When you're writing this section of the operations plan, start by explaining what you've done to date to get the business operational, then follow up with an explanation of what still needs to be done. The following should be included:

Production Workflow

A high-level, step-by-step description of how your product or service will be made, identifying the problems that may occur in the production process. Follow this with a subsection titled "Risks," which outlines the potential problems that may interfere with the production process and what you're going to do to negate these risks. If any part of the production process can expose employees to hazards, describe how employees will be trained in dealing with safety issues. If hazardous materials will be used, describe how these will be safely stored, handled, and disposed.

Industry Association Memberships

Show your awareness of your industry's local, regional, or national standards and regulations by telling which industry organizations you are already a member of and which ones you plan to join. This is also an opportunity to outline what steps you've taken to comply with the laws and regulations that apply to your industry. 

Supply Chains

An explanation of who your suppliers are and their prices, terms, and conditions. Describe what alternative arrangements you have made or will make if these suppliers let you down.

Quality Control

An explanation of the quality control measures that you've set up or are going to establish. For example, if you intend to pursue some form of quality control certification such as ISO 9000, describe how you will accomplish this.

While you can think of the stage of the development part of the operations plan as an overview, the production process section lays out the details of your business's day-to-day operations. Remember, your goal for writing this business plan section is to demonstrate your understanding of your product or service's manufacturing or delivery process.

When writing this section, you can use the headings below as subheadings and then provide the details in paragraph format. Leave out any topic that does not apply to your particular business.

Do an outline of your business's day-to-day operations, including your hours of operation and the days the business will be open. If the business is seasonal, be sure to say so.

The Physical Plant

Describe the type, site, and location of premises for your business. If applicable, include drawings of the building, copies of lease agreements, and recent real estate appraisals. You need to show how much the land or buildings required for your business operations are worth and tell why they're important to your proposed business.

The same goes for equipment. Besides describing the equipment necessary and how much of it you need, you also need to include its worth and cost and explain any financing arrangements.

Make a list of your assets , such as land, buildings, inventory, furniture, equipment, and vehicles. Include legal descriptions and the worth of each asset.

Special Requirements

If your business has any special requirements, such as water or power needs, ventilation, drainage, etc., provide the details in your operating plan, as well as what you've done to secure the necessary permissions.

State where you're going to get the materials you need to produce your product or service and explain what terms you've negotiated with suppliers.

Explain how long it takes to produce a unit and when you'll be able to start producing your product or service. Include factors that may affect the time frame of production and describe how you'll deal with potential challenges such as rush orders.

Explain how you'll keep  track of inventory .

Feasibility

Describe any product testing, price testing, or prototype testing that you've done on your product or service.

Give details of product cost estimates.

Once you've worked through this business plan section, you'll not only have a detailed operations plan to show your readers, but you'll also have a convenient list of what needs to be done next to make your business a reality. Writing this document gives you a chance to crystalize your business ideas into a clear checklist that you can reference. As you check items off the list, use it to explain your vision to investors, partners, and others within your organization.

What is an operations plan?

An operations plan is one section of a company's business plan. This section conveys the physical requirements for your business's operations, including supply chains, workflow , and quality control processes.

What is the main difference between the operations plan and the financial plan?

The operations plan and financial plan tackle similar issues, in that they seek to explain how the business will turn a profit. The operations plan approaches this issue from a physical perspective, such as property, routes, and locations. The financial plan explains how revenue and expenses will ultimately lead to the business's success.

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Brewery Business Plan

Start your own brewery business plan

Sedibeng Breweries

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Sedibeng Breweries is a medium-scale brewery that is located in the growing industrial centre of Selebi Phikwe, Botswana. This is a relatively new business in its start-up phase having been incorporated recently.

We are on the brink of penetrating a lucrative market in a rapidly-growing economy. The current trend towards an increase in the number of entrepreneurs and competition amongst existing companies presents an opportunity for Sedibeng Breweries to penetrate the market. Our products will be positioned very carefully. They will be of extremely high quality to ensure customer satisfaction, supported by impeccable service to our customers. Our primary goal will be to establish and strengthen our license to trade, which will be bestowed by the communities in which we function. As Sedibeng Breweries prospers and grows, these communities will continue to benefit from both the value created by Sedibeng Breweries and its behavior as a corporate citizen.

Initial plans are to produce three main lines of products primarily focusing on X, Y, and Z beer (which comes in different flavors: B, P, C and S). These products will be sold in different sized containers ranging from the 250 ml ginger beer to the 500 ml traditional beer. These products shall be extensively distributed to remote, yet extremely viable areas where the market is appreciative of readily available, good quality brew.

To prosper there is need for Sedibeng to be flexible and responsive, to delight customers by providing them with what they want, when they want it and before the competition. From product concept to goods dispatch we intend to ensure that every policy and procedure, system and process must have the objective of improving the flexibility and response of the whole company. There is a need for interaction between all functional areas, particularly between marketing and manufacturing, if the organization is to realize its full potential, with manufacturing being employed as a strategic weapon.

Our marketing strategy will be based mainly on ensuring customers know what need the product(s) is able to fulfill, and making the right product and information available to the right target customer. Hence we intend to implement a market penetration strategy that will ensure that we are well known and respected in our respective industry. We will ensure that our products’ prices take into consideration people’s budgets, and that these people appreciate the product(s) and know that it exists, including where to find it. However these prices will also take into consideration the cost of production and distribution so as to ensure that we remain viable and operational. The marketing effort will convey the sense of quality and satisfaction in every picture, every promotion, and every publication. Our promotional strategy will involve integrating advertising, events, personal selling, public relations and direct marketing. In the long term Internet marketing shall also be undertaken, details of which are provided in the marketing section of the following plan.

Our target markets will primarily constitute the corporate and working class who appreciate good quality traditional beer. The working class will range from the miners, who constitute a large portion of the market, to administrative personnel appreciative of good quality traditional beer. The corporate or managerial segment will constitute those managers, who though aware of their image and reputation, want to put aside their ties and jackets after hours and/or on weekends to drink good traditional beer, easily accessible in the urban areas. The common bond will be the appreciation of a good-quality traditional brew able to fulfill their thirst. Sedibeng is primarily targeting a market share of 6% to attain sales of approximately $1.5 million in our initial year. Sedibeng Breweries will pride itself on its production ability, competitive prices, its high standards of quality and its adaptability to changes in the market and in the method of its practice.

It is important to recognize that we do not intend that our tangible resources alone will make us potent competitors but more so our intangibles, such as our ability to relate to consumers, management style, corporate culture and commitment. These elements will differentiate us from our competitors and contribute towards the development of a sustainable competitive advantage.

We intend to compensate our personnel well, so as to retain their invaluable expertise and to ensure job satisfaction and enrichment through delegation of authority. Our compensation will include health care, generous profit sharing, plus a minimum of three weeks vacation. As an equal opportunity employer, we respect the diversity and human rights of our people, and strive to achieve optimal productivity, while realizing each employee’s full potential. Awards will be given out to outstanding individuals, groups and plants for hard work and production so as to instill a sense of fun  and promote the maintenance of high standards. By encouraging all employees close to our customers to think tactically about what Sedibeng Breweries service offerings should be, and by having enthusiastic, capable and empowered people interacting with our customers, we build the competitive advantage of being able to meet our customers’ needs better than anyone else.

Sedibeng Breweries intends to provide the customer with more than just a traditional brew. We intend to provide a quality brew that will not only be refreshing and pleasurable, but also encourage gatherings and sharing of fun. Our customers are assured of products that have been produced using the highest quality standards.

As we grow we want to grow right. Initially pursuing organic development and expansion we intend to undertake vertical integration in the future so as to be in total control of our raw materials and goods dispatch. For example, we realizing that we have to be in constant touch with our stakeholders to ensure market knowledge at all times. This is the nature of the channels we deal with. Also, we intend to build our management team correctly. We need the right people, in the right place, at the right time if we are to ensure optimum growth. We intend to develop our team so that our people can grow as the company grows– a mutually beneficial relationship. We shall strive to attain our primary goal, which is to develop and strengthen our license to trade, bestowed by the communities in which we function. As Sedibeng Breweries prospers and grows, these communities will continue to benefit from both the value created by Sedibeng and its behavior as a corporate citizen.

1.1 Objectives

Our business strategy will revolve around the need to provide quality brew to our various target customers, in the process fully satisfying their needs. This shall be undertaken through the implementation of high quality control standards and technological innovations, as well as the recruitment of a professional production and sales team, and the production of good quality marketing material designed to cater for various kinds of customers. This marketing material shall be professionally done so as to be reflective of our intended image and reputation. We shall position ourselves as a quality manufacturer that strives to provide quench fulfillment, enjoyment, reliability and a good image. We intend to establish a good rapport with all the relevant stakeholders.

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Our objectives will revolve around the following guiding principles:

• Provision of a great work environment, treating each other with respect and dignity.
• Apply high-quality standards of excellence to all business processes.
• Develop enthusiastically-satisfied customers all of the time.
• Contribute positively to our communities and our environment.
• To continuously formalize and measure cross-functional working communication so as to ensure that the various departments work harmoniously towards attainment of company objectives.
• To instill a culture of continuous improvement in beating standards of customer satisfaction and efficiency.
• Fully commit to supporting growth and development in the economy.

Ultimately we intend to create a stable business platform that will create prosperity for all those involved in the business venture at all levels, and to uplift unemployed Botswanans who are prepared to participate in this venture.

1.2 Keys to Success

The keys to Sedibeng Breweries success will undoubtedly be effective market segmentation through identification of several niche markets and implementation strategies. Along these lines the company intends to implement advertising, personal selling and direct marketing strategies aimed at the target markets. Our advertising marketing strategies will rotate around.

Hence our key success factors will include the following:

Excellence in Fulfilling the Promise: We intend to produce and provide products of uncompromised quality to our customers. This is so as to meet the needs and standards of our customers. Effective and Efficient Distribution Network: The importance of such cannot be overemphasized in our line of business. We intend to establish an excellent distribution network that will enable us to rapidly respond to customers’ orders, and be available in remote areas our competitor has not yet exploited. Assembly Technology: To ensure quality brewed beverages it is essential to utilize the latest and most efficient assembly technology. Keeping abreast with technological developments will ensure we gain, and maintain, a competitive advantage utilizing the latest production techniques. Loyalty and Dedication: The loyalty and dedication of our employees shall be essential to the prosperity of the organization. We recognize that Corporate commitment to success should lead to the survival and prosperity of the products, and ultimately the organization as a whole. Marketing Know-how: In an increasingly competitive market there is need to aggressively market our business so as to be continuously at the top of our prospective and current client’s minds. Adherence to Stringent Values and Principles: Sedibeng needs to acknowledge the fact that the financial and strategic management of the business will ultimately determine its prosperity and success. Hence we intend to adhere to stringent values and principles that will enable such to be achieved.

1.3 Mission

Sedibeng Breweries intends to create a pleasant, enjoyable and sociable environment through the provision of refreshing high-quality brews. Hence we intend to assist in the creation of a welcoming and relaxed ambiance reflective of people enjoying themselves. We are sensitive to the taste, look and feel of good beer, as well as affordable prices depending on the market. We intend to provide the best possible value to our customers who care about quality products at affordable prices, and we want every dollar spent on our products to be well spent. Hence our value proposition is to sell the benefit of refreshness and enjoyment to our various consumers at reasonable prices.

Internally we intend to create and nurture a healthy, creative, respectful and enjoyable office and plant environment, in which our employees are fairly compensated and encouraged to respect the customer and the quality of the product we produce. In addition follow-up will be mandatory so as to ensure customer satisfaction and make any improvements as recommended by the customers in future. We seek a fair and responsible profit, enough to keep the company financially healthy for the short and long term, and to fairly compensate owners and investors for the money and risk.

We also intend to obtain ISO 9000 certification from the South African Bureau of Standards (SABS) so that our products are internationally recognized and approved. This will assist in our penetrating the regional and international markets, intentions of which we have in future. However this will occur after we have established ourselves on the local market. The above is well summarized in our mission statement which goes as follows:

Our mission is to carefully attend to detail in the hygiene in all our brews, and to uphold superb quality at all levels of production. To satisfy all our customers and stakeholders.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Sedibeng Breweries is a relatively new company providing high quality alcoholic and non-alcoholic beverages in the local market. Sedibeng Breweries intends to focus on the brewing process and the brewery itself. The brewery will house four stainless steel vessels whose shiny finish will be highlighted by the flood lights on the ceiling. Interested stakeholders will be able to observe the brewing process during the day and will be offered guided educational tours of the brewing facility.

It will focus initially on providing and satisfying two kinds of markets:

• Working Class: This will range from the miners who constitute a large portion of the market to administrative personnel appreciative of good quality traditional beer.

As it grows it will take on people and expand into related markets. It will also look for additional leverage by establishing relationships and representations with appropriate strategic allies.

2.1 Start-up Summary

Total start-up capital and expenses (including legal costs, logo design, stationery and related expenses) came to approximately $41,700. Start-up assets required and utilized included brewing plant and machinery, pick-ups, office furniture, personal computers and other office equipment. This figure comes to $840,000.

2.2 Company Ownership

Sedibeng Breweries is a Private Limited company incorporated at the Registrar of Companies through the foresight and vision of Mr. X and Mr. Y. Its fiscal year is the calendar year. Though it has only been in existence for seven months it realizes the potential market and opportunity for growth given implementation of the appropriate strategies, aided by the necessary finances.

2.3 Company Locations and Facilities

At present the company plants and offices are located in the growing industrial center of Selebi Phikwe, Kasane and Palaype with intentions of establishing an additional plant in Maun or Francistown, largely depending on the dictates of the market and the obtaining of a lease. Our current facilities provide offices, plants and machinery, office equipment and so on.

2.4 Company Values

This shall be undertaken through implementation of the following company values:

• Ultimately we intend to uphold all the above company values, promoting our employees and respective third parties engaged by us to do likewise.

Through promotion and implementation of the above stated company values we believe that we will be able to attain our corporate and stakeholders’ goals and objectives for the benefit of all concerned, in particular the communities in which we will operate.

Sedibeng Breweries produces and markets several products. There are three main products currently in its production line. These are:

All products are periodically taken for testing to the National Food Laboratory for quality checks so as to ensure that they conform to required quality standards.

3.1 Product Description

Sedibeng Breweries produces products of high quality and impeccable taste. The company currently produces three main lines of products, namely X beer, Y beer and Z beer. All three have unique properties that will enable them to excel on the market. We will also be watching for technological developments in South Africa and overseas, allowing us to be first on the market and produce high-quality products through cost effective means. In addition the company will select suitable products for production under license.

Our current product listing is as follows:

• Z Beer This traditional food product is widely consumed as a substitute for regular meals and energy booster, whenever available. Up to now it has only been available in two sources, namely home prepared or more commonly bought from a shop having a fridge to keep the product refrigerated.

This denies the people in rural area access to these delicious and nutritious foodstuffs. In fact, it is so wholesome that a growing child is able survive on one litter of this per day, as it contains protein, starches, calcium, vitamins and other essential trace elements. We have the ability to produce a long life Z that needs NO refrigeration, which can be sold from the shelf in the same fashion as Ultra Mel and similar products. This means that it can be bought by consumers who might not always have access to cooling or refrigeration facilities, to be consumed later, as a food whilst way from home, or as an emergency food supply. This is available in several flavors, such as x, y, w, t, s and other xx flavors that the market might want. It is also a good product to use in school feeding schemes and similar projects.

3.2 Competitive Comparison

Identifying competition in terms of companies that fill the same needs that we do, our competitors are few in our main product lines, though dominant in the market. Hence there will be a need to strongly differentiate ourselves from these other businesses. However on a broader scale our competition comes in several forms:

• On a larger scale manufacturers of other beverages including soft drinks and coffees also constitute competition, but of a generic nature, as people have to choose between them as refreshments. These products being marketed in supermarkets are often advertised on an extensive basis. To this end we intend to implement a strategy that will integrate the various promotional elements or tools such that our products are well known and appreciated on the market.

3.3 Macro-environment

Over the last few months abnormal weather has affected many parts of Southern Africa, including Botswana, during the key summer season. It has been extraordinarily severe with heavy rainfall, flooding and there definitely promises to be low temperatures, particularly in the winter season. This is likely to have an adverse effect on our initial financial performance, though marginal as consumption levels may decrease slightly.

At a large scale, market research demonstrates that the brewing industry market is growing and changing. Generally there is a trend toward more appealing and attractive brews as potential customers either are moving to the urban areas as a result of urbanization or are satisfied with an existing brew in their area. Research indicates that those in the rural areas are often satisfied with the existing brew due to lack of access to other higher-quality brews, whilst the new generation of executives being more educated and aware of the global environment wants to be seen drinking something attractive and recognized by others–status recognition. In addition this same market is not only more image conscious but appreciative of a quality brew as it is more selective. Therefore with the emergence of this generation of individuals, the appreciation of quality brews and packaging, dictates that our product lines will be popular.

3.4 Technology

Sedibeng Breweries will strive to maintain the latest and most efficient assembly technology so as to ensure quality-brewed beverages, and maintain low production costs ultimately benefiting the consumer. Keeping abreast with technological developments will ensure we gain and maintain a competitive advantage utilizing the latest production techniques.

3.5 Future Products

In putting the company together we have attempted to offer enough products to allow us to always be in demand by our customers and clients. The most important factor in developing future products is market need. Our understanding of the needs of our target market segments shall be one of our competitive advantages. It is critical to our effort to develop the right new products. We also intend to have what we call a “core product engine” that will be the foundation of future products. This shall be established in time as we determine our core product. In the future, Sedibeng Breweries will broaden its coverage by expanding into additional markets (i.e., the whole of Southern Africa) and additional product areas. In doing so we will strive to ensure that it is compatible with the existing products and assembly technology.

3.6 Fulfillment

• We will turn to reliable farmers, suppliers and distributors who will assist in ensuring that the products are delivered timely and are of the highest quality. We will also rely on these stakeholders for relevant information on the market situation (trends, consumer tastes, feelings and comments amongst other things).

SWOT Analysis SWOT analysis .">

We are in a highly lucrative market in a rapidly growing economy. We foresee our strengths as the ability to respond quickly to what the market dictates and to provide quality brew in a growing market. In addition, through aggressive marketing and quality management we intend to become a well-respected and known entity in our respective industry. Our key personnel have a wide and thorough knowledge of the local manufacturing market and expertise, which will go towards penetrating the market. However we acknowledge our weakness of a medium-sized company without a lot of experience, and the threat of new competition taking aim at our niche. Below are the summarized strengths, weaknesses, opportunities and threats.

4.1 Strengths

• An aggressive and focused marketing campaign with clear goals and strategies.

4.2 Weaknesses

• Establishment on the Internet will produce technological challenges.

4.3 Opportunities

• Increasing number of foreign firms, especially from South Africa looking at penetrating the market.

4.4 Threats

The present growth in the market may result in market saturation, through competition. This competition could emerge from a variety of given sources including:

• Intolerable price increases by foreign suppliers may occur.

Market Analysis Summary how to do a market analysis for your business plan.">

Today we are experiencing rapid growth in the economy of unsurpassed nature. This has been brought about by (amongst other things) the relaxation of foreign exchange policies and macro economic policies geared towards attracting foreign investors into the country. The fiscal and monetary policies of the government geared towards maintaining growth with social justice have largely contributed towards this, evidenced by our economy averaging a growth rate of 7% since 1990–very high by international standards.

The current drive and emphasis by the government on diversification of the industrial base away from the minerals sector presents an opportunity for Sedibeng Breweries to make a valuable contribution towards achieving this goal. This will result in implementation of modern production techniques and transfer of knowledge. Having undertaken a thorough and comprehensive research of the market we realized that there was a need for a manufacturer that focuses on producing affordable thirst quenching brew tailored to satisfying client’s needs. Though there are breweries currently on the market, some of whom have been in existence for a relatively long period of time, we believe that there is a market need for one (ourselves in this instance) that particularly focuses on the low to medium earning individuals. We intend to provide products of extremely high quality–something that cannot be over-emphasized in the international arena with the current drive towards globalization. The marketing mix of the products has been carefully and strategically put together to position them in the market.

Aware of the fact that we will be operating in a predominantly monopolistic market structure we intend to ensure that our marketing strategies are considerate of the importance of the fit between our products capabilities and benefits, and the target market, so as to develop a strong sustainable competitive position in the market. As a result we intend to implement a niche marketing strategy, focusing on certain target markets, particularly in view of XX Breweries dominance on the market. Our initial overall target market share shall be 6% of the local market. This share will vary with the actual products, with ginger beer having a larger share than traditional beer due to its uniqueness.

We appreciate that entering such a market is not a bed of roses, particularly as it is monopolistic. Hence we intend to implement an aggressive marketing strategy, well supported by the other business functions. The above prognosis influenced our decision to enter the brewing industry.

5.1 Market Segmentation

Sedibeng Breweries will be focusing on the corporate and working class who appreciate good quality traditional beer. The working class will range from the miners who constitute a large portion of the market, to administrative personnel appreciative of good quality traditional beer. The corporate or managerial segment will constitute those managers who though aware of their image and reputation, want to put aside their ties and jackets after hours and/or on weekends to drink good traditional beer, easily accessible in the urban areas.

Our most important group of potential customers are those in the rural areas who often converge after hours to socialize and update one another on local news. These are potential customers who want to have an enjoyable time whilst drinking a good refreshing beverage. They do not want to waste their time making their own brew, but appreciate a good quality brew at a reasonable price.

We also intend to appeal to the foreign and local tourists who would be looking at experiencing traditional foods and drinks, a change from the usual beverages they often have.

5.2 Target Market Segment Strategy

Our marketing strategy will be based mainly on making the right product available to the right target customer. We will ensure that our products’ prices take into consideration peoples’ budgets, and that these people appreciate the product and know that it exists, including where to find it. The marketing will convey the sense of quality in every picture, every promotion, and every publication. There is already a sense of segment strategy in the way we define our target market. We are choosing to compete in areas that lend themselves to local competition, service and channel areas that match our strengths, and avoid our weaknesses.

Our strategy calls for the development of relationships with suppliers, distributors and retailers to support our business. Regular visits will be undertaken to these areas so as to ensure that we are meeting their expectations.

5.2.1 Market Trends

Our target markets are increasingly growing towards recognizing the difference between poor quality brews and those of high quality. This development is an important trend for us as it represents our target market. We now are having an increasing number of people who appreciate the traditional brews whilst living in the urban areas. With this in mind we intend to ensure that our packaging is respectable and attractive.

Today’s extremely stressful work environment dictates that individuals consume healthy drinks especially in the summer season, this presents an opportunity that we may exploit, marketing the health aspect of our beverages.

5.2.2 Market Growth

Import statistics provide a reliable guide as to the size of the brewing industry. According to the Trade Department, the market has been growing at a steady rate of 7% per annum although it is projected to increase slightly in 1999 and 2000.  According to the most recent Trade Department import statistics for beer and wine, total beer and wine imports stood at 10,421,968 liters ($14,473,000) in 1998 whilst total exports stood at 864,668 liters ($281,363) in the same year. This brought about a total market size estimated at just over 11,286,636 liters in 1998. Specifically, imports for traditional beer stood at 310,627 liters in 1998 which represented an increase of approximately 32.56% from the previous year (1997). In 1997 these imports had risen by approximately 66.14%.

5.2.3 Market Needs

Sedibeng Breweries will set out to provide good quality products that will help instill a jovial environment. Sedibeng Breweries intends to provide the customer with more than a drink to quench one’s thirst. We intend to provide a quality brew that not only quenches one’s thirst but enables one to enjoy themselves and be proud of it. The quality of raw materials and assembly technology evident in our products will serve to enhance the appearance of our customers, in turn adding to their status. The large market is due to the fact that opaque beer is traditional beer for most Botswana. It is consumed for social, ritual and ceremonial purposes and hence appeals to a vast majority of the rural population in particular.

5.3 Industry Analysis

Industry analysis information is presented in the following subtopics.

5.3.1 Competition and Buying Patterns

The key element in purchase decisions made at the Sedibeng Breweries customer level is the availability of an affordable, thirst-quenching product of good quality. The most important factor in this market is the distribution network. This is particularly so considering the good distribution network that XX Breweries Limited has in place enabling them to produce products that are constantly in demand throughout the country.

5.3.2 Main Competitors

Being in a predominantly monopolistic market structure, competition in the brewery manufacturing market as a whole is not that intense (in terms of numbers) at the current time due to the dominance of XX Breweries Limited, which has been on the market for a relatively long period of time. Cognisance should also be taken of home brewers who represent competition on our intended market. However upon closer research we identified several niches in the market that we may exploit, not wanting to confront XX Breweries one-on-one.

In general, our competition will be stiff, as we intend to penetrate the low to medium earning customer. At the same time we shall be differentiating ourselves from XX Breweries. We intend to market ourselves in such a way that with time competitor customers will choose our products over competitors’ on the basis of our higher quality, thirst-quenching brews. We shall now provide a more thorough outline of our main competitors in the same strategic group as ourselves, including their strengths and weaknesses.

XX Breweries Limited and ZZ Breweries – T Brewery Holdings

Arguably the largest and most reputable manufacturer, supplier and marketer of alcoholic and non-alcoholic beverages in the country, XX Breweries has been on the market for a considerable period of time now. Part of the large and extremely reputable conglomerate, YY Breweries International, XX Breweries is currently the dominant domestic producers of beer, sorghum and Coca-Cola products in the country, with an overall market share of more than 95%. XX Breweries is able to take advantage of the financial, managerial and technical clout that it has through YY Breweries International. Due to its size it enjoys an economy of scale and thus the competitive advantage of being able to offer low priced beverages in large quantities to its target markets. YY Breweries International Africa enjoys strong cash flows in the form of royalty payments, management fees and dividends from its Botswana operations due to its dominance.

One of XX Breweries’ main products is S traditional beer, which will be one of our main competitor products. S is currently mass marketed in the whole of Botswana and is popular amongst the rural and town folk. It is also present in the regional countries, including Zimbabwe, Zambia and Mozambique, with current intentions of going beyond these borders. This is mainly because it is in its maturity stage and these efforts of going international are meant to extend its product life. However a frailty of S is that the product does not maintain freshness for a long period, which is debilitating when its intentions are export. Hence Sedibeng intends to take advantage of this weakness.

XX Breweries In Botswana

Recent financial results from T Brewery Holdings indicate that the organization as a whole has continued to perform exceptionally well on the back of a buoyant Botswana economy. Turnover grew by 42% whilst operating profit is up 60% from $21.5 million to $34.5 million. For the 12 months to 31 March 2000, volume growth exceeded non-mining GDP growth by more than 2%, resulting in turnover growth of 12%. According to the audited results, higher volumes and turnover coupled with greater productivity and stringent cost controls translated into excellent earnings growth. With this in mind we strongly believe that there is an extremely lucrative market we may exploit.

Strategy and Implementation Summary

Our marketing strategy emphasizes focus. This will be the key. We are a relatively new company and hence must focus on certain kinds of products with certain kinds of consumers. Initially Sedibeng Breweries will focus on the local market and in the remote and previously inaccessible areas where there is a large market for our products. Hence the form of growth that shall be initially pursued will be that of organic growth mainly due to limited resources and the need to instill confidence in our products. The target customers will include key decision-makers in the retail and supermarket chains who often order or recommend on behalf of the whole organization, the aim being to obtain an initial order and fully satisfy the customer from then on.

• We are focusing advertising on several key media.

We intend to achieve growth by creating a more enthusiastic customer culture than that of our competitors. All criteria from price competitiveness to staff attitudes are to be initially measured six-monthly, and then on a more regular basis as time goes on. The results will go down to depot level and be compared with the overall target. This form of consistent measurement of strategic goals will ensure that the organization remains focused on its goals and objectives, making any necessary adjustments where need be.

6.1 Value Proposition

Our value proposition is offering our customers refreshness and enjoyment at reasonable prices ensuring peace of both body and mind. Hence we intend to:

• Market the company.

This value proposition shall be communicated through advertisements, personal selling, sales literature and catalogues, and referrals that emphasize how the company is able to provide refreshment, enjoyment and fulfillment to the customers.

6.2 Competitive Edge

Our competitive edge will be our dominance of access to previously remote areas, customer orientation and traditional high-quality brew through stringent quality control. Although XX Breweries dominates the local market, it does not penetrate the remote areas as much as we intend to.

Though we shall be serving different market segments we intend to focus on (discussion removed for confidentiality).

6.3 Sales Strategy

We intend to focus on improving our implementation, by working on key objectives and better coordination of marketing efforts. For the short term at least, the selling process will depend on personal selling and advertising to lure and inform potential clients about the products we offer and the benefits of consuming our products. Our marketing does not intend to affect the perception of need as much as knowledge and awareness of the product categories.

6.3.1 Sales Forecast

The sales forecast monthly summary is included below. The annual sales projections are included later in the plan. It should be noted that as we become established and known on the market we project sales to increase at a faster rate than the initial year.

6.4 Marketing Strategy

One core element of our marketing strategy will be that of differentiation from our competitors. In terms of promotion, we intend to sell our company as a differentiated strategic ally, not just our products. In price, we intend to offer extremely reasonable prices in comparison to the competition and we need to be able to sustain that. Market penetration through lower prices shall be undertaken where need be, while premium pricing will be the case of the upper-end of the market.

6.4.1 Service Provision

The service aspect of Sedibeng Breweries marketing mix shall constitute an important element in delivering total quality. This is due to the high degree of exposure our competitors already have. As such we intend our customer service to be key to the retention of customers. We shall follow-up with our clients on a regular basis so as to ensure they are satisfied with our products and delivery times. This is mainly because we intend our customers not to be one-time buyers but regular order seekers. The establishment of a rapport and understanding between our customers and ourselves is going to be an ongoing processes.

We intend to implement database marketing whereby we shall be targeting customers based on their previous purchases, in terms of size, frequency and actual products, so as to forecast their demands and establish long beneficial relationships. Customer service shall be enhanced through infrastructure support in the form of merchandising and credit facilities, and alternative distribution facilities where possible and viable.

6.4.2 Pricing Strategy

Initially our prices will not be under our control but dictated by the market conditions prevailing at the particular time. This is particularly so in the case of products which are also produced by our competitors, as they are often representing a scale for consumers. However we realize that we must charge appropriately for the quality and work we shall be providing, in addition to the distribution of the products. Hence we intend the price will accommodate the mark ups prevailing in the industry, as well as our own costs. To be competitive in the market we intend to offer discounts to customers making bulk orders, which are in competition with the industry. This will also assist in the establishment of customer loyalty. Hence our prices shall be as follows: (discussion removed for confidentiality).

We intend our income structure to match our cost structure, so as to ensure that the salaries we pay to assure good workmanship is balanced by the price we charge. We will make sure that we charge for the product, workmanship and delivery with our aim being to achieve a gross profit margin of at least 30% in our initial years of operation. All in all we intend our prices to be extremely competitive on the market.

6.4.3 Promotion Strategy

Our promotion strategy will be based primarily on informing potential customers of our existence and making the right information available to our target customer. Since we shall be targeting different segments, the promotional tools and messages may vary slightly to match the intended market. However in all cases the marketing will convey the sense of quality, refreshness and health in every picture, every promotion and every publication. Promotional campaigns will seek to promote the ‘sharing aspect’ of the beer, customers drinking these products in groups. Our promotional activities shall be focused towards driving the organization’s overall strategy relentlessly, developing internal consistency and prepare it to confront any radical changes that may arise. In such a market we cannot afford to appear in, or produce, second-rate material that make our products look less than they are. We intend to leverage our presence using quality brochures and other sales literature, including promotional material such as pens, complimentary slips and stickers. Due to the fact that our products are in the introductory phase on the market, promotional expenses are high in order to generate customer attention and knowledge of our products existence.

We intend to spread the word about our business through the following:

Advertising

In view of the fact that we are entering a market largely dominated by XX Breweries Limited which has an approximate market share of approximately 95% (as previously discussed) we intend to undertake extensive advertising of our products in addition to our brand name–company name. This is so as to instill awareness and knowledge of our existence in the market place, which hopefully shall convert into market share. Hence the need to ensure that our products are constantly available to our target market, and of consistent high quality. Whilst we are committed to providing products of uncompromising quality to meet the needs and expectations, the company believes its products should be advertised and promoted in an honest and ethical manner that respects the values of our consumers’ societies. Examples include the Boccim Business Directory which will require us being members of Boccim, Botswana–a review of commerce and industry, Contacts Botswana, and other telephone directories. A constant look out will also be made of any special editions in the local newspapers, which may provide an opportunity to advertise.

These are increasingly becoming important as more firms establish in the country and hence the need to be known. The organization aims to participate in trade shows and quality taste tests. Not only will these increase awareness of the products, but if a particular product were to gain recognition, for example through being chosen #1 at a taste test, the organization will be able to take advantage of this in all its promotional campaigns, adding leverage to its reputation and image. Undoubtedly this would add confidence and pride in our staff complement as their hard work would be recognized often at the highest levels. Communicating such achievements often gives customers a feeling that they can rely on the product, and this builds strong customer loyalty. An example of a trade show we intend to participate at is BITEC. The aim of this exhibition is to provide a conducive environment for companies to display their products in a specialized exhibition. The exchange of technologies, ideas, and contacts will serve as a fertile ground for the blooming of healthy trade relationships and partnerships.

We also intend to participate at the Botswana International Trade Fair (BITF) in August so as to expose our business to potential customers and suppliers. Such fairs serve as important eye openers for both potential customers and ourselves. With time it shall be necessary for us to participate in regional trade shows and fairs such as the South African Exhibition Show so as to gain awareness and ultimately orders from outside the country.

Public Relations

Recognizing that we are relatively new on the market there will be a need to organize an event, of grandeur nature, introducing ourselves onto the market. At this we intend to invite potential customers, senior officials, including the Minister of Industry and Commerce, and other stakeholders so as to penetrate the market. In collaboration with this we also intend to place news stories and features in magazines and newspapers to keep stakeholders updated on the latest developments and to increase awareness. We also plan to have a major festival initially in Selebi Phikwe, appropriately named, that maintains and promotes Botswana culture. This will assist in the recognition and appreciation of our company in the surrounding community especially. Our efforts on community service will show that the company has its community at heart, contributing towards the establishment of a good and reputable image. Homes for the under privileged will be also be built in the medium, to long term as we plough back into the society we operate in. In addition we intend to pursue educational sponsorship for the less advantaged but promising young individuals in the community. This will constitute some of our corporate social responsibility details of which are provided in the respective section.

We also intend to experiment with a road show in the various often-neglected remote areas giving out caps, bags, and other such prizes to individuals who answer questions correctly. This will also enable our business name and products to be better known by the respective communities. However we are extremely confident that these road shows if well planned will be a success as they encourage community participation. Brewery tours shall also be arranged with interested stakeholders including school children and college students. This is so as to increase awareness of our facilities and products and also showing confidence in our production process and standards. Hopefully visitors will leave impressed and confident in our products, adding to the possibility of positive referrals. These same tours will also be arranged with prospective clients/order-takers.

Still in the infancy idea stage we have in mind the hosting of a ‘fest’ whereby guzzlers of our brews as well as first-timers are encouraged to drink as much as possible whilst enjoying themselves. This is likely to be held in the hottest month of the year (October) when people are often extremely thirsty. Hence the name ‘October fest’ might be appropriate. Proceeds of such festivities are to be donated to charities.

Personal Selling

This shall be undertaken in the form of sales calls whereby a sales person will go out to potential customers and distributors informing them what products we are able to offer them. In addition the sales person will listen to client’s needs at close hand, so as to ensure that the product is delivered timely and that it is the right product as demanded by the surrounding community. Close analysis shall also be undertaken of the consumption patterns of the respective communities, that is whether they prefer larger or smaller containers. This will ensure that our products are customized as much as possible to the surrounding community’s needs and wants. In cases where there is the opportunity of obtaining a large order it may be necessary for the top management to go out personally, especially considering the fact that we are still a relatively new firm in the market.

Direct Marketing

This will be used, but only to a limited extent, in the form of telemarketing and informing potential customers and obtaining referrals where possible. In the case of telemarketing it will involve our targeting potential customers/distributors of our products and informing them of our existence and the products we offer. We may then arrange for an appointment with the respective decision-maker/order-maker, with the intention being to lure them into ordering one or more of our product lines.

Internet Marketing

The increasing growth of the Internet as an information source provides an opportunity that we may exploit. This is particularly so in view of the increasing investment and global trade amongst countries, as both large and small organizations look at obtaining the best deal possible. More often than not these organizations will seek out potential clients over the Internet due to the cost of transport and accommodation, apart from the obvious time factor, which is increasingly becoming of importance in view of the dynamic environment. However this will require adequate planning and research so as to establish a professionally done website. This will mainly serve foreign customers and other stakeholders including potential investors.

In all the above we intend to communicate our ability to manufacture good quality brews that will satisfy the customers needs. Hence our messages will influence the buying decision of prospective customers and distributors by emphasizing our unique selling proposition, and persuade prospective buyers that we are different from our competitors. All the above promotional tools shall be well integrated and utilized in tandem so as to maximize their effect.

6.4.4 Distribution Strategy

We believe that through our obsession for improvement, and commitment to a leadership position in our respective markets, we can overcome the traditionally binding constraints of resource base, firm size and narrow conceptualization of our business domain. This shall be undertaken through coordination and logical integration of our distribution operations. We aim to reduce cycle time for key processes, eliminate rework and waste, and optimize our human resources utilization. To attain low lead-times we intend to (discussion removed for confidentiality).

Trade Channels:

• Retail Distribution Channels (discussion removed for confidentiality).

We intend to ensure that our breweries are located close to our major distribution centers not only to minimize costs but also to enable our products to be easily available, in the best condition, in the different markets nationwide. By engaging and establishing good relationships with shebeen owners we intend our products to be readily available to our target market. In terms of actual delivery for every vehicle the daily fuel used, kilometers driven, repairs and maintenance costs must be recorded and compared with the set standard. (Discussion removed for confidentiality.)

6.4.5 Product Marketing

Our product marketing will emphasize the benefits of consuming our products, including refreshment and enjoyment of top-quality brews. We intend to sell the opportunity to enjoy oneself amongst friends, family and/or colleagues. This will come out in our advertising, delivery and collateral such as sales literature and business cards. Our product marketing’s most important challenge will be the problem of being accepted and appreciated on the market as a provider of quality products. Hence we intend to not only meet customers’ expectations but to exceed them, initially targeting a market share of 6%.

We intend to focus on the individual or group who want to enjoy themselves through the consumption and sharing of refreshing healthy beverages. However, not wanting to limit our horizons in the initial period, we intend to be continually looking out for opportunities that we may exploit. In all cases we intend to provide a thorough understanding and appreciation of the products to the customer and the benefits of consuming them.

6.4.6 Product Packaging

Our product packaging shall be of utmost importance, as it will definitely influence our potential customers on whether to try out our products or not. As such we shall ensure that it is not only attractive to consumers but also hygienic. As time progresses we intend to have packaging that enables the container to be used for other purposes after beer consumption, for example keeping water and being able to be deposited to retailers, the former of which we have identified as already being done. In the medium to long term we intend our product packaging to also be recyclable and hence more environmentally friendly–a continuous improvement process. Continuous improvement on packaging will also be undertaken so as to maintain, if not improve product appeal.

Currently the products are served in X ml and Y ml packs. However depending on the dictates of the market, there might be need to introduce new product packs. Hence we intend to ensure that we are flexible if such changes are to occur. A specific example is the X ml T beer pack, which is not being produced by any of the other breweries at the moment, representing an opportunity to be realized.

6.5 Corporate Social Responsibility

Sedibeng Breweries intends to be involved in a wide range of social responsibility engagement programs to invest back into the community in which we operate. Through our social responsibility program we can assist in improving peoples lives. If we contribute to development in a sustainable way, we need to support projects that communities bring to us, rather than strictly creating our own solutions for our communities. This is because if we impose our solution and drive a project it is an artificial response, and the risk is that the project will then always ‘belong’ to us. Whenever the project comes up against a new challenge, we will be expected to fix it, and will be forced to stay in a situation where we have to look after the same few projects forever. Rather we intend to fund several projects that belong to, and will be driven by, the community and become sustainable. However, before we commit ourselves to projects we intend to ensure that skills will be transferred, communities are involved and the projects will be able to become self-sustaining. We know that we cannot address all the development needs of our society. Where we can, we assist and sometimes may form partnerships so as to increase capacity.

We intend to be involved in the following activities:

• Arts and Culture (discussion removed for confidentiality).

Production Summary

Our production system shall strive to attain service excellence in addition to manufacturing safe, quality products. This shall be undertaken through the engagement of modern production techniques using up-to-date assembly technology. This will also result in low production costs being attained by the company. We also intend to ensure that the suppliers we engage are committed and reliable so as not to let down the final consumer in terms of the quality of the product and time of delivery.

In order to improve productivity in our plants we intend to reduce waste and duplication in our breweries by streamlining administrative functions and promoting and instilling a business culture that focuses on the teamwork rather than individual productivity. By the undertaking the above we will optimize our productivity given our available resources.

7.1 Suppliers

Currently the company obtains the vast majority of its raw materials from South African suppliers. However as we are committed to fair terms of trade and promotion of local business we intend to engage local suppliers. Hence raw materials, including x and y, may be sourced from local communal and commercial farmers avoiding intermediaries so as to minimize costs, ultimately benefiting the final consumer. The major advantages of doing so being higher margins, faster payments and lower risks of payment default. Through the use of economies of scale we aim to maintain low input and production costs. This may be undertaken through (discussion removed for confidentiality).

Hence we intend to establish good rapport with all our suppliers and hence long mutually beneficial business relationships. This shall be undertaken through working closely with suppliers to ensure uninterrupted deliveries.

7.2 Receiving

Recognizing that the receiving of our raw materials is an essential element in our entire business, we intend to ensure that it is done by responsible persons who will be present during off loading to check the quantity and condition of the consignment. During the actual off loading the receiving bay personnel will mass check on at least X% of the consignment. Non-confirming raw materials in terms of quality will only be approved with the consent of the managing director who would have undertaken further analysis of it.

7.3 Storage

It shall be the policy of the company to ensure that all raw materials are stored in a secure, clean and pest free manner. Stock takes and reconciliations shall be undertaken on a regular basis, initially done at least once a week. The stock principle of First In First Out (FIFO) shall be implemented. Whenever stock is taken out it shall be recorded on a separate stock or bin card, with reconciliations of raw materials issued to the brewery, issued to production, losses, opening and closing stock taken. Should any deviations arise these must be explained.

7.4 By-Products

Sedibeng Breweries intends to utilize every resource it has to the fullest possible extent. We realize that there shall be a lot of by-products that will be produced from our production of the main product lines. However not wanting to pollute the environment, and our community at large, we plan to utilize by-products whenever possible. This will ensure that our resources are fully utilized.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Sedibeng Breweries shall evaluate the jobs it provides, paying competitive remuneration packages against market benchmarks to employees for their agreed and set out tasks. Consonant with its efforts to create added value by employees, Sedibeng Breweries seeks to negotiate the provision of incentive pay delivery mechanisms against achievement of agreed targets relating to accomplishment in the areas of productivity enhancement, savings and other specific successes, that is, the implementation of an effective performance management system.

Hence our human resources strategy will revolve around:

• Stakeholder inclusivity.
• Maintaining preventative health and safety structures for employees and support for surrounding communities.

8.1 Management Team

The management team, mainly comprising of the shareholders, has wide expertise and broad knowledge of the products and markets, which if well planned for, will enable the business to realize its goals and objectives. Daily management will consist of Mr. B in the role of technical and operations, and Mr. G in dealing with government, corporate bodies, and public relations.

Management style will reflect the participation of the shareholders. The company intends to respect its community and treat all employees well. We will develop and nurture the company as community. We do not intend to be overly hierarchical. Management’s ongoing initiatives to drive sales, market share and productivity will provide additional impetus.

8.2 Personnel Plan

We intend to compensate our personnel well, to retain their invaluable expertise and to ensure job satisfaction and enrichment through delegation of authority. Our compensation will include health care, generous profit sharing, plus a minimum of three weeks vacation. As an equal opportunity employer, we respect the diversity and human rights of our people, and strive to achieve optimal productivity, while realizing the full potential of each employee. Awards will be given out to outstanding individuals, groups and plants for hard work and production so as to instill a sense of fun into the work and promote the maintenance of high standards. Sedibeng Breweries recognizes that our employees contribute fundamentally to the company’s long-term prosperity. We intend to enhance our capacity to attract and retain people of quality, through benefits such as housing and family education grants.

Employee health shall be of extreme importance. This is because the health of our people is an integral element of employee well-being at work and at home. Compliance with relevant legislation is a minimum target in our organization. We also intend to minimize if not totally eliminate the number of isolated incidents of intimidation in the workplace, so as to ensure that production and distribution are not materially affected and sound relationships are maintained between employee and employer and between employees as a whole.

8.3 Training

In-house training shall be continuous with regular external training being undertaken particularly following any new developments in the market. This is so as to ensure that we are continuously able to anticipate our markets needs–a proactive approach, which is so essential if we are to gain and maintain a competitive advantage. Courses on brewing will be undertaken primarily in South Africa, preferably with the established and reputable firms, such as YY Breweries. This will ensure that our personnel are exposed to the latest production techniques and are able to set their standards, or benchmark, using these organizations standards. Internal training will not only include product and technical aspects, but also expand to give much greater knowledge of customers, market trends, products, new technology aids, time management amongst other such variables. We intend to conduct health education sessions for groups and individuals on health risks in the workplace, balanced with lifestyle education and employee assistance programs that incorporate rehabilitation and counseling in a range of illnesses and social or personal problems. This is of particular importance in view of the AIDS epidemic that has grappled the country and continent as a whole to unparalleled levels.

We acknowledge the fact that successful recruiting, motivation and discipline procedures are keys to the growth of the organization. Hence we intend to promote and maintain good labor relations, strong morale and high quality work per employee.

8.4 Feedback and Control

• We will encourage our employees to put forward any suggestions they might have regarding the improvement of any of the company’s functions–an open door philosophy. Such a culture will enhance innovativeness and creativity in turn leading to job satisfaction and enrichment.

Financial Plan investor-ready personnel plan .">

We want to finance growth mainly through cash flow and equity. We recognize that this means we will have to grow more slowly than we might like.

The most important factor in our case is collection days, particularly with the bulk order customers. We can’t push our customers hard on collection days, because they are extremely sensitive and will normally judge us on our terms. Hence they tend to have a certain degree of financial authority. Therefore we need to develop a permanent system of receivables financing systems, using a well-coordinated accounting department. In turn we intend to ensure that our investors are compatible with our growth plan, management style and vision.

Compatibility in this regard means:

• Fundamental respect for giving our customers value, and for maintaining a healthy and congenial workplace.
• Respect for realistic forecasts, and conservative cash flow and financial management.
• Cash flow as first priority, growth second, profits third.
• Willingness to follow the company and contribute valuable input to strategy and implementation decisions.

9.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. Interest rates, tax rates, and personnel burden are based on conservative assumptions.

Some of the more important underlying assumptions are:

• We assume a strong economy, without major recession.
• We assume, of course, that there are no unforeseen changes in economic policy to make our products immediately obsolete.

9.2 Break-even Analysis

Our break-even analysis will be based on running costs, that is costs we shall incur in keeping the business running, including salaries and wages, rent, water and electricity, insurance amongst others. Hence many fixed costs shall be included in these costs. We will thus aim to ensure that our sales levels are running comfortably above break-even.

The following chart and table summarize our break-even analysis. With fixed costs of approximately $41,040 per month at the outset (a bare minimum), we need to bill approximately $93,000to cover our costs. We don’t really expect to reach break-even until several months into the business operation.

9.3 Projected Profit and Loss

Our projected profit and loss is shown on the following table, with sales increasing from more than $1,466,000 the first year to more than $1,612,000 the second, and approximately $1,806,000 in the third year. Profits are calculated to be around $152,000 before tax the first year during the start-up phase of this business. This will be representative of a net profit margin of approximately 7%, which though may not seem that impressive is relatively good for a start-up firm in our line of business. As with the break-even, we are projecting very conservatively regarding cost of sales and gross margin. Our cost of sales should be much lower, and gross margin higher, than in this projection.

9.4 Key Financial Indicators

The following benchmark chart indicates our key financial indicators for the first three years. We foresee major growth in sales and operating expenses, and a bump in our collection days as we spread the business during expansion.

Collection days are very important. We do not want to let our average collection days get above 30 under any circumstances. This could cause a serious problem with cash flow, because our working capital situation is chronically tight. However, we recognize that we cannot control this factor easily, because of the relationship with our clients.

9.5 Expense Forecast

Initial marketing expenses are relatively high as we seek to become known on the market. This will be brought about by the development of sales literature, advertising expenses, and function expenses (including lunches and dinners with interested stakeholders). As our market share increases and capital is generated, further marketing programs and the expansion of those in existence at the time will be undertaken, to ensure market development. Once these programs will start generating revenue for the business, which we shall in turn reinvest.

9.6 Projected Cash Flow

Cash flow projections are critical to our success. Detailed monthly numbers are included in the appendix. However it should be noted that they do not take into account the required capital injection.

9.7 Projected Balance Sheet

The balance sheet shows healthy growth of net worth, and strong financial position. The three-year estimates are included in the appendix.

9.8 Business Ratios

The table below shows our business ratios.

The local brewing market has been growing steadily over the last few years due to increases in people’s disposable income and opening of the economy. With this in mind we intend our marketing programs to expand accordingly. The introduction of quality catalogues and sales literature will enable Sedibeng Breweries to market to potential customers. We project sales to increase accordingly, though slightly slower as we establish a reputation for ourselves. With time, a presence on the Internet and participation in regional trade shows will be key milestones to expanding sales and marketing potentials through the utilization of new channels and identification of potential customers.

Throughout the year we intend to undertake regular evaluations of our marketing programs so as to ensure that we are in-line with our intended objectives.

In summary we intend to undertake the following:

• Saying no: Though difficult initially, we intend to be able to say no to special deals that take us away from the target focus and are unprofitable.

10.1 Contingency Planning

• Though Botswana overall is rather secure on the labor front in terms of strikes we intend to have in place a mechanism that will ensure that were this to occur the negative effects would be minimized. However further research and analysis into the above is still being undertaken.

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What Is Production Planning & Why Is It Important?

Business success often hinges on making the products that customers want in a timely and cost-effective way. Production planning helps companies achieve those goals. It maps out all the processes, resources and steps involved in production, from forecasting demand to determining the raw materials, labor and equipment needed. Production planning helps companies build realistic production schedules, ensure production processes run smoothly and efficiently, and adjust operations when problems occur.

What Is a Production Plan?

A production plan describes in detail how a company’s products and services will be manufactured. It spells out the production targets, required resources, processes and overall schedule. The plan also maps all of the operational steps involved and their dependencies. The goal is to design the most efficient way to make and deliver the company’s products at the desired level of quality. A well-designed production plan can help companies increase output and save money by developing a smoother workflow and reducing waste.

What Is Production Planning?

Production planning involves developing a comprehensive strategy for making the company’s products and services. Initially adopted by large manufacturers, production planning has since become more popular among small and midsize businesses in multiple industries — largely because technology has made it easier to plan and track production processes with less effort. Production planning covers many different aspects of production, from forecasting demand to determining the raw materials, workforce, equipment and steps needed to make the company’s products.

Production Planning vs. Production Scheduling

While production planning provides an overview of what the company plans to do, production scheduling creates a more detailed view of exactly how the company will do it. The production schedule describes when each step in the production plan will occur, as well as the workers, machinery and other specific resources assigned to the job. Production scheduling can be extremely complex, especially when there are many interdependent production steps and the company is making multiple products simultaneously. Production scheduling software (opens in new tab) can help businesses create complex schedules, monitor progress in real time and quickly make adjustments when necessary.

Key Takeaways

• Production planning describes in detail how a company’s products and services will be manufactured.
• A production plan defines the production targets, required resources and overall schedule, together with all the steps involved in production and their dependencies.
• A well-designed production plan helps companies deliver products on time, reduce costs and respond to problems.
• Technology has made it easier for small and midsize companies in multiple industries to use production planning to optimize operations.

Product Planning Explained

Production planning is a broad discipline that involves much more than a focus on manufacturing process efficiency. It is intertwined with nearly every other aspect of the business, including finance, sales, inventory and human resources. Production planning activities include demand forecasting to determine the right mix of products to meet customer needs, as well as selecting the optimal approach to building those products. Production planning also assesses the resources needed to meet production goals and lays out in detail all the operations in the production process. Production plans must include the flexibility to make operational adjustments when problems occur — such as machine breakdowns, staffing shortages and supply-chain problems.

Why Is Production Planning Important?

A well-constructed production plan can help to boost revenue, profit and customer satisfaction, while a poorly designed plan can cause production problems and perhaps even sink the company. Specific benefits of production planning include:

• Knowledge. A production plan provides a framework for understanding the resources and production steps required to meet customer needs. It also helps companies understand the potential problems that may occur during production and how to mitigate them.
• Efficiency. Detailed production planning reduces bottlenecks and helps minimize costs. It also helps ensure the high quality of a product, and it keeps expenses on budget.
• Customer satisfaction. Production planning helps ensure that the company can make and deliver products to customers on time, leading to higher customer satisfaction and a greater likelihood of repeat business.

Types of Production Planning

The design of a product plan depends on the production method that the company uses, as well as other factors, such as product type, equipment capabilities and order size. Here are three of the main types of production planning:

Batch production planning.

Refers to manufacturing identical items in groups rather than one at a time or in a continuous process. For some businesses, batch production can greatly increase efficiency. A bakery creating items for sale the next day might first make a batch of chocolate chip cookies, then move on to oatmeal raisin cookies followed by loaves of semolina bread. A clothing manufacturer making goods for the summer might first set up its cutting and sewing machines to make 500 navy-blue T-shirts, then switch to red fabric and thread to make 400 tank tops. A good production plan for batch processing should look out for potential bottlenecks or delays when switching between batches.

Job- or project-based planning.

Used by many small- and medium-sized businesses, job production planning focuses on the creation of a single item by one person or team. Job-based planning is typically used where the specificity of each client’s requirements means it is difficult to make products in bulk. Many construction businesses use this method. Makers of custom jewelry and dresses are other examples of businesses that may use job production planning.

Flow production planning.

In flow production, also known as continuous production, standardized items are continuously mass-produced on an assembly line. Large manufacturers use this method to create a constant stream of finished goods. During production, each item should move seamlessly from one step along the assembly line to the next. Flow production is most effective at reducing costs and delays when there’s steady demand for the company’s products. Manufacturers can then readily determine their needs for equipment, materials and labor at each stage along the assembly line to help streamline production and avoid delays. The automotive industry and makers of canned foods and drinks are among the companies that use this method.

5 Steps to Make a Production Plan

Production planning is a robust undertaking that starts with forecasting and includes process design and monitoring. Here are five typical production planning steps:

Forecast product demand.

Estimate how much of each product you’ll need to produce over a designated period. Historical data can help with forecasting, but you’ll also need to pay attention to other factors that can affect demand, such as market trends and the economic situation for your customer base. Demand planning software can help companies make more informed decisions about the right amount of product needed to meet demand.

Map out production steps and options.

This step determines the processes, steps and resources needed to produce the required output. At this stage, the company may also examine different options for achieving its production goals, such as outsourcing some stages. The production mapping identifies which steps are interdependent and which can be performed simultaneously. Let’s say the job is to produce 1,000 children’s bicycles. Manufacturing the bicycle frames consists of a series of steps that must happen in sequence — cutting metal tubes, welding and painting — while other activities like assembling wheels can occur in parallel. Do you have all the right equipment? What happens if a machine breaks down? Are your suppliers able to meet your demand?

Choose a plan and schedule production.

Select a production plan after comparing the cost, time required and risks for each option. Sharing the selected plan with all necessary stakeholders typically helps assure a smoother production process since all the stakeholders are aware of what’s needed. Create a detailed production schedule that lays out in detail how the company will execute the plan, including the resources and timing for each step.

Monitor and control.

Once production has begun, you’ll need to track performance and continually compare it against the targets described in the production plan. Careful monitoring helps the company to detect any issues as soon as they pop up, so they can be quickly addressed.

Adjust accordingly.

It’s almost inevitable that production will be affected by events that you can’t plan for or predict. Those events can include changes to client specifications, supply chain lags, equipment failures and worker illness. You may also see ways to improve the production plan after seeing it in action for a while. So it’s vital to keep production plans flexible enough to allow for adjustment when needed. Football coaches often make adjustments to their game strategy at halftime — and the same holds true for production planning.

3 Common Product Planning Mistakes

Being aware of potential pitfalls ahead of time can help companies avoid or mitigate problems once production has started. Here are three of the most common production planning mistakes.

Not anticipating hiccups along the way.

In any complex production process, plans can go awry. Production planning should therefore include risk management strategies, including backup plans companies can rely on in the event of problems. Failing to do so can result in serious problems. For example, if a machine breaks on the line and you didn’t budget for repairs and workforce overtime, the issue may strain the company’s financial resources.

Keeping your distance.

Though production management software can provide real-time visibility into a company’s production status, it’s a good idea to supplement that information with in-person visits to the production line. Those visits can provide valuable insights into how production works in practice — insights that you might not gain if you’re stuck behind a desk.

Failing to maintain equipment.

There’s a tradition in football that the quarterback buys presents for his offensive linemen at the end of each season. Why? Because they protect him and enable him to do his job. Your manufacturing equipment is your company’s offensive line, so don’t neglect it. Tracking usage and paying for regular preventive maintenance helps ensure that your machines can keep your business functioning.

Production Planning KPIs

Key performance indicators (KPIs) are important metrics that help companies track the health of their production processes. By monitoring KPIs and comparing them to target values defined in production plans, businesses can determine whether production is on track and pinpoint problems that need to be addressed. Typical production KPIs include:

This key efficiency metric tracks the percentage of time that production is not occurring during scheduled operating hours. Causes include machine breakdowns, tool adjustments and accidents. Some downtime may be necessary for functions such as machine maintenance, but generally, the less downtime the better.

Setup time.

Also referred to as changeover time, this is the amount of time it takes to switch between jobs. Setup time impacts overall productivity because production is halted during these periods. Production schedules should consider how much time and effort it takes to reconfigure production for each job, including changes to the equipment, raw materials and workforce. Designing production schedules to minimize changeover time can increase efficiency.

Production rate.

In a manufacturing environment, this is typically measured as the number of units produced during a specific period. Comparing the actual production rate for each process with the planned rate can help businesses identify strengths and weaknesses and begin to address problems.

Overall equipment effectiveness (OEE).

This is a measure of overall manufacturing productivity that accounts for quality, performance and availability. The formula for OEE is:

OEE = Quality x performance x availability

Quality is typically measured as the percentage of parts that meet quality standards. Performance is how fast a process is running compared to its maximum speed, which is expressed as a percentage. Availability is the percentage of uptime during a company’s scheduled operating hours. Increasing OEE can be achieved by lowering downtime, reducing waste and maintaining a high production rate.

Rejection rate.

This is the number or percentage of products that failed to pass quality checks. Depending on the nature of the product and the problem, it may be possible to salvage some rejected items by reworking them, while others may need to be scrapped.

On-time orders.

Production delays can be costly both in terms of money and reputation. Generating products on schedule means you’re less likely to need costly expedited shipping or other emergency measures to meet deadlines. And delivering orders on time helps keep customers happy, which means they’re more likely to keep doing business with your company.

Production Planning Tools

Businesses rely on a variety of tools to build production plans and track progress, ranging from visualization tools to sophisticated software that automates many of the steps involved. Typical tools include:

Gantt charts.

A Gantt chart is a detailed visual timeline of all the tasks scheduled for a particular job. More than 100 years since its invention by mechanical engineer Henry Laurence Gantt, this chart remains integral to manufacturing and many other industries. Production planning involves coordinating and scheduling many tasks , and the Gantt chart visually represents when each task will take place and how long it will last. Manually creating and updating Gantt charts to reflect complex, ever-changing production schedules can be a time-consuming and error-prone job, however.

Spreadsheets.

Small companies sometimes start out by tracking simple production plans using spreadsheets. However, for most companies, the inherent complexity of production planning quickly outstrips the capabilities of spreadsheet software.

Production planning software.

Production planning involves a wide range of activities, including forecasting, managing the supply chain, tracking inventory and scheduling jobs. Those activities require information from across the company and beyond. Production planning information is integral to business operations and is used by other groups within the company, including finance. That’s a key reason many companies use enterprise resource planning (ERP) application suites that include production planning software and provide a single solution for managing the entire business.

Manage and Optimize Production With NetSuite

NetSuite cloud-based production management software helps companies maximize manufacturing productivity and minimize cost. NetSuite provides real-time visibility into each aspect of the production process, from inventory tracking and monitoring the production floor to fulfilling orders. Production scheduling capabilities let businesses create and update complex real-time production schedules with minimal effort. Because NetSuite production management software is part of an integrated suite of ERP applications , businesses can share production progress with the entire organization and link production processes to financial reports, inventory management and order management.

Production planning is an important function that can boost profitability and customer satisfaction as well as efficiency. It helps companies match output to demand, optimize production processes and determine how to overcome production problems.

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Production Planning FAQs

What are the 5 steps in production planning.

Here are five typical steps in the production planning process:

• Forecast the short- and long-term demand for your product.
• Map out the various options and processes for manufacturing these goods
• Choose the option that checks as many boxes as possible, and develop a production schedule.
• Monitor production against the plan.
• Adjust the plan where needed. In other words, if it’s broken, fix it.

What are the 3 activities of production planning?

Production planning activities can be divided into three main areas: Develop a production process and strategy; gather the resources needed, from raw materials to machinery and personnel; and select and train the necessary people.

What are the types of production planning?

Three of the main types of production planning are batch planning, job planning and flow or continuous planning . The choice depends on your resources as well as the nature of the product. Batch planning makes the same item in bulk before moving on to another item. Job planning, also called project-based planning, focuses more on custom design and single-item production. Flow production involves a steady stream of mass-produced items moving along the line.

What is the role of production planning?

Production planning is critical to ensure the production process runs smoothly and efficiently and delivers products on time. Planning allows a business to make certain that all necessary preparation is completed before starting production.

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12.3: Production Processes

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What you’ll learn to do: describe the four main categories of production processes

Even though you may not spend a lot of time thinking about the processes used to make different products, they surround you every day. Every time you come in your front door or eat a meal or even drive your car, you interact with things that were made by combinations of job-based, batch, mass, and flow production processes: they were all produced or manufactured by someone, somewhere, and a great deal of thought and planning were needed to make them available.

Businesses know what they want to produce, but the challenge is to select a process that will maximize the productivity and efficiency of production. Senior management looks to their operations managers to inform this decision. As we examine the four major types of production processes, keep in mind that the most successful organizations are those that have their process and product aligned.

Learning Objectives

• Describe batch production
• Describe mass production

Project- or Job-Based Production

Project-based production is one-of-a-kind production in which only one unit is manufactured at a time. This type of production is often used for very large projects or for individual customers. Because the customer’s needs and preferences play such a decisive role in the final output, it’s essential for the operations manager to maintain open and frequent communication with that customer. The workers involved in this type of production are highly skilled or specialists in their field.

The following are examples of project- or job-based production:

• custom home construction

Consider the home in which you live. When the house was built, the contractor used a job process, and highly skilled workers were brought in to install the plumbing, heating, and electrical systems.

custom prints

For example, a print shop may handle a variety of projects, including newsletters, brochures, stationery, and reports. Each print job varies in quantity, type of printing process, binding, color of ink, and type of paper. A manufacturing firm that produces goods in response to customer orders is called a job shop.

Some types of service businesses also deliver customized services. Doctors, for instance, must consider the illnesses and circumstances of each individual patient before developing a customized treatment plan. Real estate agents may develop a customized service plan for each customer based on the type of house the person is selling or wants to buy.

• Unique, high quality products are made.
• Workers are often more motivated and take pride in their work.
• Products are made according to individual customer needs and improve customer satisfaction
• Production is easy to organize

Disadvantages

• Very labour intensive, so selling prices are usually higher.
• Production can take a long time and can have higher production cost, (e.g., if special materials or tools are required)

Batch Production

Batch production is a method used to produce similar items in groups, stage by stage. In batch production, the product goes through each stage of the process together before moving on to the next stage. The degree to which workers are involved in this type of production depends on the type of product. It is common for machinery to be used for the actual production and workers participate only at the beginning and end of the process.

Examples of batch production include the following:

Example \(\PageIndex{1}\)

American Leather, a Dallas-based furniture manufacturer, uses mass customization to produce couches and chairs to customer specifications within 30 days. The basic frames in the furniture are the same, but automated cutting machinery precuts the color and type of leather ordered by each customer. Using mass-production techniques, they are then added to each frame.

• Since larger numbers are made, unit costs are lower.
• Offers the customer some variety and choice.
• Materials can be bought in bulk, so they are cheap.
• Production is flexible since different batches are made
• Workers specialize in one process
• Workers are often less motivated because the work becomes repetitive.
• Initial set-up costs are high.
• Expensive to move products around the workplace.
• Storage space will be needed to store raw materials.

Mass Production

Mass production , manufacturing many identical goods at once, was a product of the Industrial Revolution. Henry Ford’s Model-T automobile is a good example of early mass production. Each car turned out by Ford’s factory was identical, right down to its color. If you wanted a car in any color except black, you were out of luck. Canned goods, over-the-counter drugs, and household appliances are other examples of goods that are mass-produced. The emphasis in mass production is on keeping manufacturing costs low by producing uniform products using repetitive and standardized processes. As products became more complicated to produce, mass production also became more complex. Automobile manufacturers, for example, must now incorporate more sophisticated electronics into their car designs. As a result, the number of assembly stations in most automobile manufacturing plants has increased.

Watch the following video on the process used to manufacture the amazing Peep. It will serve as a point of reference because it features many of the process components we will be discussing in this reading.

• Labour costs are usually lower
• Materials can be purchased in large quantities, so they are often cheaper
• Large number of goods are produced
• Unit costs are relatively low
• Machinery is very expensive to buy, so production lines are very expensive to set up.
• Workers are not very motivated, since their work is very repetitive.
• Not very flexible, as a production line is difficult to adapt.
• If one part of the line breaks, the whole production process will have to stop until it is repaired.delay the production process
• Maintenance cost are very high

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We eat biscuits, bread, cake, chocolate, etc all the time in our day-to-day life. Have you ever thought about how such large quantities are supplied in the market where demands are in the tonnes? What is the production process that goes behind producing every single unit of these items? How are the materials procured, planned, and finally produced? Are the quantities produced useful or not? Read on for answers to these questions.

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Production process definition

The production process is an essential part of any business. It is a process of turning raw materials and ideas into products and services. It is important to develop efficient and effective production processes because they heavily impact business performance.

The production process is defined as the process in which the factors of production, i.e. inputs of resources, are turned into products or services.

Factors of production means capital, labour, technology, land, and other resources that are used to create output, or goods and services.

The factors of production are explained in detail below:

Capital includes the amount invested in the process of production. Investment can be in terms of monetary investments or assets like machines, vehicles, etc.

Labour refers to the people involved and the time and effort that were put into the process.

Technology refers to the technology used in the production process, whether the kind of machinery, the programming of machinery, the capacity of machinery, etc.

Land refers to natural resources such as land, energy, etc., that are used in the process of production and are counted under the category ‘land’.

Examples of the production process

Let's explore the production process with the example of biscuit production. To set up this production process, the company requires a place or land to set up the whole production unit.

Secondly, in the production of biscuits, the organization will need the machines to mix all the necessary ingredients. It will also need an oven to bake the biscuits. In addition, it will need machinery for making the biscuits' packaging and labelling, which will all become capital investment for the company.

The company will also need labour to mix all the ingredients together, separate them into batches of production and different flavours, set the output levels of the machines and temperature of the ovens, decide on the labeling function, and oversee the overall production system.

Another important function and need of the production process is technology to ensure the labels are correct, the names of the product are rightly mentioned, the temperature is set correctly, and all other necessary technical aspects that do not require human intervention.

If all of the above factors of production are in place, the production process of biscuits runs smoothly and can match the requirement of the business and customers.

Production process flow chart

The production process goes through various stages, which can be understood with the help of the flow chart. There are multiple ways to create a production process flow chart, depending on the organization’s need and their production line. The following are generally the basic stages that are involved in most of the production processes. However, these may vary from industry to industry.

Planning: usually the basic requirement of all production processes. This stage helps to define the purpose and how the goals of production can be achieved properly.

Routing: This is the next stage in the production process where the raw materials may be procured, processed, finished, quality checked, and distributed. Decisions are made regarding the quantity and quality of goods and services as well as on the place of production. This is a crucial stage in the production process.

Scheduling: Scheduling means deciding the timings of the production process. For example, how much time should each stage of production involve? How long should each person work on a particular workflow?

Dispatching: This stage is the actual start of the production. It may involve the provision of necessary items, the maintenance of records, the monitoring of workflows as planned, the recording of the number of times a machine works, machine idling time, etc.

Types of production

The methods of production can be classified into many types depending on the company’s product and the organization’s needs. The five types of production are:

Mass production,

Batch production,

Job production ,

Service production, and

Customised production.

Mass Production

Mass production means there is continuous production and all employees work continuously to produce the same items at the same time. In this kind of production, the forms and size of the products remain the same and every employee focuses on the same product. All resources are utilized to produce the same range. To make production more efficient and effective, multiple tasks may be carried out at once to get quick results.

If one company is producing only white bread on a huge level, all employees will focus on the white bread packets only. In this process, most employees will be working towards white bread making: preparing the dough, baking, etc. Others will be working on packing the produced loaves of white bread at the same time, to generate the loaves of white bread quickly and efficiently at once.

Batch Production

Batch production is similar to mass production. However, the products may be produced in batches. This means that the production may be divided based on product size, colour, form, etc.

We can understand this with the example of T-shirt production. The T-shirt manufacturing company may opt for batch manufacturing, as they would want to manufacture in different sizes from small, medium and large, and also in different colours, say red, blue, green, and yellow. Hence, the team may be divided for every batch on the basis of production of the respective size and colour.

Job production means the products are produced in a limited quantity and may be specific to customer preferences. Job production is small-scale, and the task of producing an item or product is completed before taking up other jobs.

Service Production

This method of production involves rendering services via an automated process, such as technical support for customers.

One example in current business in terms of service production is delivery services. Consumers now have the benefit of ordering goods and services from the comfort of their own homes and receiving them directly at their doorstep due to the sheer amount and scope of delivery services available.

Customized Production

Customized production is a process in which goods and services are produced on the basis of the customer's needs. This can be divided into 2 categories:

Craft Production

This category of customised production involves a personal touch based on the specific customer's demand. One of the classic examples of this is designer clothes. Say one dress is specifically designed for a celebrity for a particular award show, on-demand, with a choice of colour and pattern, and customised to the event's theme.

Mass-customised Production

Mass-customised production is similar to craft production. However, the customised selection is produced in mass quantity. The customisation may be on the basis of shape, colour, pattern, product material, etc.

For example, Coca-Cola may have custom 500ml bottles in glass produced in larger quantities according to need. Generally, production processes may share similar factors of production with land, labor, capital, and technology. The process may change relative to demand. The stages of production remain more or less the same from planning to routing, scheduling to dispatching, and finally, follow-up. The types of production, however, may change as per demand for the product and/or the requirements of the organization, in terms of sizes, colour, customisation, etc.

Types of production examples

We have put all types of production with examples of industries in which they are usually implemented in the table below.

Production Process - Key takeaways

• The production process is defined as the process in which the ‘factors of production’, i.e. input of resources, are turned into products or services.

Mass production is when there is continuous production and all employees work to produce the same items at the same time.

• Batch production is similar to mass production. However, the products may be produced in batches. Therefore the production may be divided by size, color, form, etc.

Job production means the products are produced in a limited quantity and may be specific to customers' preferences.

• The method of service production involves rendering services via an automated process such as technical support given to the customers.
• Customised production is the process in which goods and services are produced on the basis of the customers' needs.

The production process involves the following stages :1. Planning2. Routing3. Scheduling4. Dispatching5. Follow-up

Frequently Asked Questions about Production Process

--> what are examples of the production process.

Examples of the production process:

• The T-shirt manufacturing company may opt for batch manufacturing 
• If one company is producing only white bread on a huge level, it is mass production.
• Technical support for customers is service production.

--> What is a production process flow chart?

The production process goes through various stages, which can be understood with the help of the flow chart. There are multiple ways to create a production process flow chart, depending on the organization’s need and production line. The following are generally the basic stages that are involved in most of the production processes. 

1. Planning 2. Routing 3. Scheduling 4. Dispatching 5. Follow-up 

--> What is a production process in a business plan?

Since the production process defines the way how resources are turned into final products, it is an essential part of every business plan. The efficiency of that process has a significant influence on the company's performance.

--> What is the production process?

The production process is defined as the process in which the factors of production, i.e. inputs of resources, are turned into beneficial outputs.  

--> What are the types of production processes?

Types of production processes:

• Mass Production 
• Batch Production 
• Job Production 
• Service Production 
• Customized Production 

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What is flow production?

Flow production is a method for producing a large number of identical products.

Used for mass production

What is an assembly line?

a series of workers or machines to produce a succession of similar goods.

Short lead time and low level of inventory

Why does flow production help achieve economies of flow? 

With flow production, a large number of goods can be produced at the same time, which reduces the unit cost. 

What does a short lead time mean? 

A short lead-time means that the product can be delivered more quickly, which improves customer satisfaction.  

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PRODUCTION PROCESS

The production process is a component appearing under the operating plan of the overall business plan.  The production process is the process a product or service takes in order for it to become ready for customers to buy.  Production will certainly depend on the type and nature of your proposed business. Generally, a manufacturer will have a more sophisticated production process compared to a retailer or service provider. This is not to say that retail and service based businesses are simple, but rather, these types of businesses usually require fewer "processes".

The production process of a manufacturer, in its simplest form, may consist of the following steps.

• 1.   Fabrication (where individual parts are made into raw materials) 2.   Assembling the raw materials into finished products 3.   Quality Control (inspections) 4.   Testing of finished products 5.   Packaging the finished products 6.   Shipping the finished products to retailers, wholesalers, etc.

The above items are major events that occur when manufacturing a typical product. But many other, smaller events may occur during the production process and can be briefly described in the Operating Plan. For example, welding, machinery setup, heating, molding, cooling, wiring, sodering, melting, bending, scratching, drying and cutting, just to name a few. When writing the production process section of the operating plan, a manufacturer must carefully explain each step of the process so that the business plan reader fully understands how the product will be produced.  When explaining the production process in the operating plan, try to avoid technical jargon or terms only people within the industry would know. In addition, try to be concise and to the point - you do not want to bore the reader.

As mentioned earlier, the production process is usually less demanding for retailers and service providers. For example, a clothing retailer would simply purchase their products from a supplier, unpack the products as they are shipped, place the products in storage, place the products on the shelves as they are needed, and finally sell the products. This process is so obvious that many retailers write a one sentence description in the operating plan to describe their production process. In addition, such retailers would also discuss one or two major aspects of the process, such as inventory control and ordering.

In conclusion, if you are planning on establishing a retail business or a service business, simply provide in your operating plan a one sentence description of the production process and discuss your planned inventory practices and ordering policies.  Also, if you are proposing a unique production process or a structure different from your competitors, be sure to fully explain it.

For additional information relating to the Components of the Operating Plan, please refer to section named Operating Plan .

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Production Company Business Plan Template

Written by Dave Lavinsky

Production Company Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their production companies.

If you’re unfamiliar with creating a production company business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a production company business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Production Company Business Plan?

A business plan provides a snapshot of your production company as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Production Company

If you’re looking to start a production company or grow your existing production company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your production company to improve your chances of success. Your production company business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Production Companies

With regards to funding, the main sources of funding for a production company are personal savings, credit cards, bank loans, and angel investors. When it comes 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 ensure 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 and bank loans are the most common funding paths for production companies.

Finish Your Business Plan Today!

How to write a business plan for a production company.

If you want to start a production company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your production company 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 kind of production company you are running and the status. For example, are you a startup, do you have a production company that you would like to grow, or are you operating a chain of production companies?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the production industry.
• Discuss the type of production company you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of production company you are operating.

For example, your production company might specialize in one of the following types of production companies:

• Feature Film Production Company : this type of production company handles all of the necessities that go with producing a major film – hiring on-screen and off-screen talent, writers, musicians, location scouts, a team for pre-production, post-production, legal, etc.
• Commercial Production Company: this type of production company can produce stock footage, short corporate videos, training videos, and creative projects such as music videos and short films
• Post Production Company: this type of production company handles video editing, special effects, color correction, sound mixing, and editing to eventually produce the final video.
• Niche Production Company: this type of production company focuses on one specific niche that it has perfected. They often combine the best of animation, commercial, and post-production companies.

In addition to explaining the type of production company you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of clients served, the number of films with positive reviews, reaching X number of clients served, etc.
• Your legal business 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 production industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the production industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason 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 of your production company business plan:

• How big is the production 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 target market for your production company? 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 of your production company business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, companies, filmmakers, studios.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of production company you operate. Clearly, small businesses would respond to different marketing promotions than filmmakers, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize 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 production companies.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes social media platforms, web developers, apps and even college or university students. You need to mention such competition as well.

For each such competitor, provide an overview of their business 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 clients do they serve?
• What type of production company are they?
• 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 concierge services or customized packages for your clients?
• Will you offer products or services that your competition doesn’t?
• 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 production company business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type o f production company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide video editing, music editing, pre-production, or post-production services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your production company. Document where your company is situated and mention how the site will impact your success. For example, is your production company located in New York or Los Angeles, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your production company marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Be part of filmmaker associations and networks
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

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 production company , including client communication and interaction, planning and producing production services, billing clients, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your production company to a new city.  

Management Team

To demonstrate your production company’s potential to succeed, a strong management 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 production companies. 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 as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a production company or successfully running a small filmmaking company.  

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 s heet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue 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 book 5 films or videos per day, and/or offer production packages ? 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 production company, 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 lender 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 ensure 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.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a production company:

• Cost of equipment and production studio supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

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 studio location lease or a list of production services you plan to offer.  

Writing a business plan for your production company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the production industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful production company.  

Production Company Business Plan FAQs

What is the easiest way to complete my production company business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your production company business plan.

How Do You Start a Production Company Business?

Starting a production company business is easy with these 14 steps:

• Choose the Name for Your Production Company Business
• Create Your Production Company Business Plan
• Choose the Legal Structure for Your Production Company Business
• Secure Startup Funding for Your Production Company Business (If Needed)
• Secure a Location for Your Business
• Register Your Production Company Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Production Company Business
• Buy or Lease the Right Production Company Business Equipment
• Develop Your Production Company Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Production Company Business
• Open for Business

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People face failure. Not all entrepreneurs are capable of thriving to survive in this industry. Indeed, businesses fail. And that is the truth about it. But do you remember how all the plans that didn’t push through? If you do, then now is the time to correct mistakes from the past. Don’t take planning as anything. Whether in food, film, or media production, organizing your activities helps in achieving your goals. Take your time to prepare a production plan . Be guided in executing the right activity to achieve your goals. Create a structure and release the doubt. Increase your potential and start planning for the production today.

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What is a Production Plan?

Small businesses are always tangled with several challenges while starting a business. You can expect that there will be projects, events, and daily activities. A production plan is a detailed document that outlines the structure of the company’s operations. In the plan, there is a structure, schedule, goal, activities, and the definition of resources in between. It is one step closer to success at a time. So, whenever your path is uncertain, a production plan will help in opening the right direction. This is why entrepreneurs must consider rewriting their planning techniques. If you are having issues with the layout, the proper organization saves the day.

Business Production Situation

According to an article published by Forbes, 80% out of 100 small business owners guarantee success in the first year of business operation. It manifests an above-average rate of success. However, behind this curtain are failing attempts for smaller businesses to stand out. Generally, the business industry is at a 50% stake in reaching accomplishment and failure. Surprisingly, many companies today face a battle without enough capital. Sometimes, competition is thick and no weapon to defend. These are just among the factors that affect the whole organization. But, don’t thrive for the worst. You need a little encouragement to compete. Here, you must adjust your business activities, schedule, and operations. 

Generally, you need to plan. So, before you start getting back to your daily grind, let us learn more about writing down your production plan. Follow below. 

How To Create a Production Plan

If you are a manufacturing firm, it is not always easy to look into the company’s needs. There will always be lapses. And that is one thing that you should avoid. But you can do this through planning. You need your plans outlined to track the inputs of the production. That is why we help you go through it. You should understand every step by following the list below.

1. Forecast Market Demand

First things first, you need to stretch it out. To effectively plan for the future of the business, you need an estimate of the sales through market demand. How many products should you produce to meet the target demand? When should these products be released? Another way to secure this process is through current and historical information. On top of the line, there will be orders in the coming weeks. So, you need to think ahead. In general, take advantage of internal and external resources.

2. Know the Production Options Available

Here, you need to verify the tools and resources necessary to produce your products and services. Take for example, when you have a bakery business, you need to know the machines that are required to produce bread and cakes. You can start this by listing the food on the menu. Then, create a flowchart. Once these are all secured, you can already identify the resources that should be available for the business to operate. You can improve the process by having the right materials.

3. Determine the Human Resources

Aside from the equipment, you need to count how many employees you will need to operate. Of course, it is not enough to operate without the labor workers that control and monitor the production. To do this accurately, separate each team into a department. But base them according to the availability of position and equipment. Your staff should be enough to deliver and produce without delays. But aside from that, you need to weigh in your production budget. Or else, it can lead to a big commotion.

4. Monitor Plan Control

An action plan without constant monitoring is just a waste of time. Neglecting this will eventually lead to pitfalls. So, you need to measure the risk factors. This is where you compare and contrast the production process. Record a report as this helps you determine a recurring problem. Don’t let issues happen in a blink of an eye. Monitor and control while you can.

5. Make the Necessary Adjustments

For the last step, make the adjustments you intend to make with your plan. What are the challenges? Does the plan need tweaking? Production planning can be a little tricky when done wrong. Now that you have monitored and measured the risk percentage, pen down all the actions necessary. Change them according to your evaluation. Here, you should achieve a comprehensive management plan . Weigh the budget, schedule, and activities too.

How do you define a production planning procedure?

Production planning is a process that is taken during manufacturing. It details all the necessary procedures for the company to operate. It includes hiring staff, checking the resources, evaluating the results. Through this process, the production will run smoothly.

What are the essential components of production?

Production consists of various components. These are essentials to execute the manufacturing process. This includes planning, producing, scheduling, evaluating, and following ups—all of these work hand in hand for the company to deliver quality products with no delay.

What are the primary goals of the production plan?

The general objective of production planning is to secure the workflow process of a manufacturing company. As the demand goes up, it is important to ensure that all the products released are of quality.

Are you struggling to meet your daily quota? Remember, one-day unproductive results in several risks in the business. This profoundly affects your reputation, and of course, the sales. But you can change honest mistakes. While you look at the list of tips in creating a production plan, you can resume your manufacturing business and align all the plans with your objectives. Understandably, running a business is daunting and frustrating. But you will never know your potential unless you try. So, start today. Highlight your potential by outlining all the plans necessary. 

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10 Production Schedule Templates for Production Planning

Praburam Srinivasan

Growth Marketing Manager

February 13, 2024

If you’re in the business of making something—a new app, a website, or even a multimedia project—you need to carefully plan, control, and execute your production to succeed. A good production schedule helps you to deliver your goods on time while optimizing your resources. 

These blueprint plans keep everyone in the know and on track throughout every stage of the production process. These schedules specify who is responsible for each task, the completion date, and the next steps in the process .

In this guide, we’ll cover the benefits of a well-designed schedule and share 10 production schedule templates you can start using now. 🦄

What is a Production Planning Template?

Benefits of using a master production schedule template, what makes a good production planning template, 1. clickup production tracking template, 2. clickup production cost analysis template, 3. clickup daily production report template, 4. clickup manufacturing project plan template, 5. clickup manufacturing communication plan template, 6. clickup sprint planning template, 7. clickup development schedule template, 8. clickup build plan template, 9. clickup release planning template, 10. excel production schedule template by simple sheets.

A production planning template is a framework that creates a visual representation of production scheduling. The schedule establishes a production process and assigns a plan and budget, outlining the task sequence, timing, and allocation of necessary resources to create something or deliver services.

Production schedules usually include details on the production status, such as task description, start and end dates, role and responsibility assignments, and required materials for each step.

These resources are handy for optimizing workflows and minimizing obstacles that could delay production. They help project managers ensure on-time and on-budget delivery of goods and services.

A well-planned production schedule assists businesses in making intelligent, well-informed decisions and planning more efficiently. 

Using a production schedule template improves your business’s efficiency and organization while contributing to the overall success of the production process. Some of the key advantages of using a production planning template include: 

• More efficient resource allocation : A good production plan will help you allocate resources efficiently, including workforce, equipment, and materials. This helps reduce production costs and improve profitability 
• Better time management : Production schedule templates help you create clear, reasonable timelines for each task, giving teams actionable deadlines and avoiding burnout or bottlenecks. You’ll also avoid unnecessary downtime 
• Standardized processes : A production plan creates a framework for your operations and provides a consistent and replicable production process. This enhances quality control and reduces potential errors in production 
• More transparency with accountability : Production schedules allow you to assign roles and responsibilities for each task, making it clear who’s responsible for each step. This makes the process transparent and holds team members accountable for their contributions 

Some templates also allow you to run “what-if” scenarios. This helps you plan for different production scenarios and see how your team could overcome potential challenges. It’s a great way to build flexibility into your production schedule and keep things running smoothly, even when the unexpected happens. 

A good production planning template helps make your production more efficient, flexible, and cost-efficient. The template must have an organized, logical layout and be easy to use, edit, and update.

Users need to identify tasks, timelines, and resources at a glance. Suitable templates should also have space for additional information, such as task descriptions and start and end dates. Production planning templates also benefit from built-in communication aids, including notes and comments sections, which promote collaboration within the team.

Excellent production schedule templates offer dependency indications for a smooth workflow and guide resource allocation. They typically incorporate visual elements, such as Gantt charts and milestone trackers, to mark progress within the project.

The best production planning templates are the ones that help you coordinate production tasks, minimize waste, and propel you to better on-time delivery. Experiment with several templates to see what works best for your team.

10 Production Planning Schedule Templates to Use in 2024

Here are 10 versatile and efficient production planning templates to try this year.

The ClickUp Production Tracking Template offers a comprehensive solution for any organization that needs to master production management. The template seamlessly integrates with the ClickUp ecosystem, so you can use the framework to streamline production tasks while taking advantage of the platform’s robust project planning tools . 

The template allows you to meticulously map tasks, allocate resources, establish priorities, and identify dependencies by featuring an incredibly intuitive interface, complete with click-and-drag functionalities. The multiple views available let you create dynamic visualizations of the workflow to spot potential problems and remove them before they cause production issues. 

ClickUp’s commitment to collaboration shines through in this template. It offers plenty of space for feedback, notes, and comments and informs teams with real-time updates. It’s a great way to avoid any issues with missed emails or poor version management because everything your team needs to stay on track is in one centralized hub. 

Efficient production is vital for your bottom line, and the ClickUp Production Cost Analysis Template covers materials, labor, and overhead costs to help inform your decisions. You can gain insight into your production inefficiencies and forecast pricing impacts.

Product managers can leverage the template’s information to make better decisions and improve the production process. By gaining better cost visibility in your production process, you can optimize your resources and boost your long-term profitability and efficiency.

Let this template do the heavy lifting by collecting essential data and providing key actionable insights. It connects with the rest of the ClickUp platform, so it’s an excellent option if you already use the program as strategic planning software for your business. 

Production planning templates offer a high-level view of your process, but you must also know the daily details. The ClickUp Daily Production Report Template is an excellent addition to your  product development process , giving your team space to update everyone on daily events. 

Using the template within the ClickUp platform allows you to create real-time insights and progress tracking for more efficient reporting and better decision-making. 

The Daily Production Report Template offers total customization, including status, fields, and multiple view options to incorporate it with your workflow. It’s a great way to maintain oversight, provide accountability, and create transparent collaboration with your production team.

For those working specifically within the manufacturing industry, the ClickUp Manufacturing Project Plan Template will streamline the planning and organization process. The template has space for project objectives , manufacturing tasks, resource allocation, progress tracking, and more. 

Execute your projects more effectively and efficiently while optimizing your budget and resources. With careful planning and this functional template, you’ll reduce operation costs and make your production line more profitable. 

It’s a great addition to your ClickUp ecosystem and a perfect addition if you already use ClickUp as a CRM platform for manufacturers . Add this template to your current ClickUp lineup and see how it strengthens your manufacturing plans, making them faster and more cost-effective. 

Learn about the best manufacturing schedule software !

Our next free production schedule template is the ClickUp Manufacturing Communication Plan Template for better coordination and team collaboration, so you’ll avoid misunderstandings that may cause delays in the manufacturing processes.

This template helps you establish better communication paths between departments, suppliers, and stakeholders to keep information flowing and ensure everyone gets the same regular updates. Using this template, you’ll be able to document critical decisions and actions so everyone stays on the same page. 

No matter the size of your operation, this template is a must-have in your collection of  product management tools .

If your team operates on an Agile project management approach, sprint planning is a big part of your production plan. Make sprint planning more efficient with the ClickUp Sprint Planning Template . The template’s design makes it easier to plan each sprint, bringing clarity to a task regardless of complexity.

Use the platform’s many visualization features to create easy-to-read task planning and schedules because it plugs into ClickUp seamlessly. ClickUp’s collaborative features also make it easy for your team to keep the planning template current, so any project manager or team member can monitor progress throughout the sprint lifecycle and know where the team is at with every task on the list. 

Are you looking for a way to keep your development team on track? The ClickUp Development Schedule Template is the resource you need, no matter what you’re working on and what stage of development you’re in.

The template streamlines creating a schedule with visual task management, collaborative features, real-time updates, and automated reminders. This keeps your team on track with tasks and ensures they meet deliverable deadlines.

The Development Schedule Template provides stakeholders with real-time updates. It’s a great way to update them on progress so they have the information they need at any time. With everything in one central hub, they can easily check progress while allowing the development team to continue working on their tasks.

You have an idea. Now, you need a plan to build it. The ClickUp Build Plan Template helps you organize your resources, timelines, and milestones to create a comprehensive plan for making your idea a reality. 

From concept to launch, the build plan template becomes a roadmap where you can visualize tasks and progress while getting real-time updates from your team. It’s perfect for gaining clarity in each project development phase. It helps you set realistic deadlines while using internal and external resources wisely.

ClickUp’s free Build Plan Template offers plenty of customization options, including statuses, fields, and views, so you can tweak the template to suit the needs of your team. Use this template to create innovative plans for your next big idea. 

This resource also works as a film production schedule template to align all departments and partners on development!

Are you trying to plan your next big software release? Keep your team on the same page with the ClickUp Release Planning Template . This is an alternative production planning template for those within the software development business. ClickUp designed the template to help oversee the launch of new software, giving you a way to organize your release plan strategically. 

Start with plotting tasks, milestones, and dependencies to anticipate and remove potential bottlenecks. The template provides an insight into your team’s progress through each phase and helps you coach them to better performance. 

From software inception to final deployment, the template creates a central hub for release planning, making it a seamless, collaborative effort. Take control over your release cycles and make them more efficient and effective for everyone involved. 

If you’re looking for Excel templates, Simple Sheets has you covered. Its Excel Production Schedule template allows you to manage every aspect of your production process, from supply chain to operation rates, custom orders, and more.

Simple Sheets has carefully designed the spreadsheet with smart auto-population to save you from too much manual entry. Excel-savvy users can customize the spreadsheet to closely meet their team’s workflow process. 

If you opt for this template, you’ll get all the benefits of working in the Excel environment, such as analyzing data and creating helpful charts to maximize efficiencies. The template is compatible with Google Sheets, too! 

Track All the Production Activities and Resources in ClickUp

A great production schedule can be the backbone of your operation. It transforms the most complex processes into organized management steps. With a well-planned production schedule, you can oversee the timely delivery of goods and services while optimizing your resources and keeping everyone accountable for their responsibilities. 

If you’re ready to take your production planning to the next level, check out ClickUp.

This productivity platform has a vast library of free templates to help you plan and organize your next project, whether refining an old project or developing something from the ground up. You can track tasks, allocate resources, and create timelines while working in a collaborative platform that puts communication and transparency first. 

Revolutionize your production process on the ClickUp platform today!

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Process Planning: Steps, Types & Benefits

Manufacturers need to have a process by which to make or assemble their products. Before they go into production, therefore, they must engage in what’s called process planning. This is an important step before manufacturing and must be thoroughly understood.

Learn what process planning is, including why it’s so important and the different types there are. Then find out the steps to process planning and see what a manufacturing process plan is and why it benefits production.

What Is Process Planning?

Process planning is how manufacturers determine the sequence of operations that they’ll take to produce a part or make an assembly leading to the finished goods. When working in a job shop that produces one-of-a-kind products or where the same product is mass-produced, process planning is incredibly important.

However, all manufacturers benefit from process planning. That’s because process planning is the bridge between product design and product manufacturing. The purpose of process planning is to develop the most efficient sequence of operations. This includes having the right equipment and tools and meeting product requirements and specifications.

All of this is done to reduce costs and increase productivity. Manufacturers have two ways to achieve these goals; one is manual process planning and the other is using software to aid in process planning.

ProjectManager is award-winning software that helps manufacturers with process planning by using visual workflow tools such as our kanban boards. You can create custom, automated workflows and centralize process planning for full-team visibility. To ensure that only quality moves forward, create task approvals and only authorized managers will be able to approve the job. Get started with ProjectManager today for free.

Benefits of Process Planning

Any kind of planning is always important in manufacturing or, frankly, any industry. You never want to wing it, not when there are money and people’s livelihoods involved. But that’s just a general benefit, there are more specific reasons why manufacturers want to use process planning.

For one, it helps manufacturers evaluate other ways of operating when it comes to the production of their goods. That way they can look at where they’re maximizing resource utilization and how they can better optimize throughput from the start of the production life cycle. In other words, they can better strategize their manufacturing operations to deliver on their goals.

Process planning also gives manufacturers the flexibility to quickly shift production if they find a better way of doing things, such as increasing production efficiencies. It also helps deliver consistent quality over multiple production lines or plants. That means reducing the time to market, which improves customer satisfaction and retention.

Types of Process Planning

There are three main types of process planning: manual process planning, computer-aided process planning and generative process planning. Let’s take a moment to explore each of these.

Manual Process Planning

Also known as man-variant process planning, this is the most commonly used type of process planning. A process planner will select the combination of processes needed to produce the finished part. These are engineering drawings that define the part requirements and the availability and capabilities of machines and processes. The selection leads to criteria, such as production costs or time, machine utilization and routine will also impact the plan. Usually, the criteria are based on a family of parts rather than the processes and machines needed to produce a single part.

Computer-Aided Process Planning

This is a more efficient type of process planning, less tedious and less likely to make mistakes. Automating process planning systems removes the human element in the steps between preparing engineering drawings and finishing the process plan for all manufacturing operations. There still must be human oversight to ensure compatibility with the available processes. Whether to turn, mill or stamp is determined by the product requirements , quantities ordered and capabilities of the processes. This still reduces process planning time, and the skills required of a process planner and makes for more consistent and accurate plans that increase productivity and reduce costs.

Generative Process Planning

Generative process planning takes in-process information and uses it to automatically create a process plan for a new component. This information is pulled from manufacturing databases and doesn’t involve much human oversight. After reviewing the design, the operation sequence is automatically produced. Of course, the software must be encoded with knowledge of manufacturing. In fact, machine selection, tool selection, process optimization and more can also be automated by this system. There are hurdles to clear, however, such as transforming component data and decision rules into the system.

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Production Schedule Template

Use this free Production Schedule Template for Excel to manage your projects better.

What Is a Manufacturing Process Plan?

A manufacturing process plan defines the steps from product design and development to the manufacturing processes used to create the finished product. It includes operation sequencing, machine process planning, assembly process planning and assembly line planning.

What Should You Consider When Creating a Process Plan?

When you’re putting together a process plan, you’ll want to be flexible. For example, you might need to restructure the engineering bill of materials (all materials and instructions needed for assemblage) so that it reflects the realities of your manufacturing situation. Some assemblies will be made in-house and others not. The process plan needs to bring all this together in one plan.

You’ll also have to think about new relationships between parts. Processes that have multiple parts need to have specific steps to be properly completed. Therefore, you’ll have to manage three aspects; the resources, tools and machines you’re using in your production process . These will be used in different relations to one another depending on the assembly.

There’s also the manufacturing bill of materials, which is different from the engineering bill of materials. That’s because manufacturing involves the complexity of turning one unique structure into another. These steps must be planned out in order not to miss something important.

The manufacturing process plan must also meet the engineering parts, CAD visuals, requirements, deliverables and other assets’ quality expectations. Therefore, the plan must provide information to ensure that these processes are accurate and efficiently done while providing transparency to other teams, such as engineering, in the overall process.

Free Production Schedule Template

There are many things to think about when creating a process plan in manufacturing, and you can’t forget to create and implement a production schedule to keep your project on track. Download this free production schedule for Excel to track order status, product quantities, production dates and more.

Process Planning Steps

To implement your process plan, you have to follow several steps. Following these steps helps find the most efficient path from product design to product manufacturing to accomplish your objectives. Below are the basic steps you should take.

1. Identify Inputs and Outputs of Your Manufacturing Process

Inputs are the materials and other resources that you’ll use to create the finished product. These can be labor, materials, facilities, equipment and so forth. The outputs are the finished products that’ll be delivered to customers. Therefore, it’s crucial to understand what will go in and come out of your manufacturing process to manage that process, reduce waste and increase productivity.

2. Map Out Your Workflows

The workflow maps the activities that will achieve a certain result. This is a crucial part of the process plan as it visualizes processes from start to finish and helps make clear each step in that path, including resources needed to complete the work. It’s also a quality assurance measure as workflows are repeatable and consistent in producing your products.

3. Create Documentation for Production Operators

These documents include everything from production prints to schematics and circuit layouts for associated electronics. You’ll also want to create a bill of materials to gather all the resources needed to build your product and directions for how it will be assembled. Other documentation includes status reports, invoices, batch records to identify job numbers and personnel.

4. Train Your Employees

Plan training and exercises for your personnel. This is an important step to make sure everyone knows what they have to do and how they should do it. This step is critical to building confidence in your workforce as well as motivating them to do their jobs well.

ProjectManager Helps With Process Planning

Process planning takes users’ instructions and from there figures out what is necessary to turn inputs into outputs. That process is facilitated by project management software that can help you track schedules and monitor progress. ProjectManager is award-winning software that gives you the tools you need to plan, manage and track production in real time. Our tool gives you the features you need to sequence operations and prepare for manufacturing and then make sure you’re staying on track during production.

Track Production Schedules With Gantt Charts

Production schedules rely on resource planning, estimation and forecast demand as well as knowing your inventory and monitoring progress. Our robust Gantt charts allow you to organize tasks, resources and costs. Then you can set a baseline to capture the process plan and be able to compare it to your actual progress in real time. Now you can quickly catch issues that are causing delays and easily adjust the Gantt chart to make production more efficient.

Monitor Progress & Budgets With Real-Time Dashboards

Of course, once production is running, process planners need to keep an eye on progress to make sure everything is going as planned. Setting the baseline in the Gantt means that you can monitor production from various tools on our software. For instance, you can get a high-level view of production on one or all of your projects with the real-time dashboard . It automatically collects data and displays metrics such as time, cost, workload and more in easy-to-read graphs and charts. Unlike lightweight tools, there’s no time-consuming configuration required, even with our portfolio dashboard that shows metrics across all of your projects.

Other tools can help with process planning. For example, our customizable reports are easy to generate and provide more detail on aspects of production, such as timesheets, variance and status reports. All can be filtered to focus only on the data you’re interested in to better run your production line. Reports can also be shared in a variety of formats or printed out to keep stakeholders updated.

ProjectManager is online project management software that empowers process planners to plan, manage and track production in real time. There are also task management, resource management and risk management features that keep manufacturing running smoothly. Get started with ProjectManager today for free.

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Production Company Business Plan Template

Written by Dave Lavinsky

Production Company Business Plan

You’ve come to the right place to create your Production Company business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their production companies.

Below is a template to help you create each section of your Production Company business plan.

Executive Summary

Business overview.

ABQ Reels Video Production is a startup production company located in Albuquerque, New Mexico. The company is founded by Mark Johnson, an entertainment industry veteran who has over 25 years of experience working in video production. Now that Mark has experienced managing a production business, he is ready to start his own company, ABQ Reels Video Production. Mark is confident that his video production skills, combined with his understanding of business management, will enable him to run a profitable production company of his own. Mark is recruiting a team of highly qualified professionals to help manage the day-to-day complexities of video production – sales and marketing, client relationship management, budgeting, financial reporting, and project management.

ABQ Reels Video Production will provide a full suite of production services for small scale video projects in the Albuquerque area. ABQ Reels Video will be the go-to production studio in Albuquerque for its tailored approach and client-first focus. The company will be the ultimate choice for customer service while ensuring the highest quality standards for production in the area.

Product Offering

The following are the services that ABQ Reels Video Production will provide:

• Content Development
• Sourcing & Hiring Film Crew
• Planning & Logistics
• Post-Production Services

Customer Focus

ABQ Reels Video Production will target businesses and individuals in Albuquerque that are looking for video production services for small-scale projects, commercials, and social media. No matter the customer, ABQ Reels Video Production will deliver the best communication, service, and customized production tailored to fit each project’s needs.

Management Team

ABQ Reels Video Production will be owned and operated by Mark Johnson. Mark is a graduate of New Mexico University with a degree in Film Production. He has over 25 years of experience working in video production, and over ten years as a production manager. Mark will be the company’s Chief Executive Officer and Production Manager. He will oversee the production process, production equipment, and production staff’s activities.

Mark has recruited a business management expert, Emily Martinez, to be the company’s Chief Operating Officer and help oversee the production business operations. Emily will handle the day-to-day operations, including budgeting, client relationships, and logistics.

Mark and Emily have recruited an experienced marketing director, Steve Smith, to become a member of the ABQ Reels Video Production management team. Steve is a graduate of the University of California with a bachelor’s degree in marketing. Mark and Emily rely on Steve’s expertise to execute the company’s marketing plan and advertising strategies.

Success Factors

ABQ Reels Video Production will be able to achieve success by offering the following competitive advantages:

• Skilled team of production experts and project management professionals who will oversee each project from start to finish and ensure the customers’ needs are met.
• ABQ Reels Video Production is able to provide production services for a wide range of purposes using the latest production technology.
• The company is able to leverage the expertise of its leadership team to provide customers with the best possible production services from knowledgeable industry veterans.

Financial Highlights

ABQ Reels Video Production is seeking $800,000 in debt financing to launch its production business. The funding will be dedicated towards securing the production facility and purchasing production equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff and marketing expenses. The breakout of the funding is below:

• Facility build-out: $340,000
• Production equipment, supplies, and materials: $280,000
• Three months of overhead expenses (payroll, utilities): $160,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph below outlines the pro forma financial projections for ABQ Reels Video Production.

Company Overview

Who is abq reels video production.

ABQ Reels Video Production is a newly established production company in Albuquerque, New Mexico. The company will provide a full suite of production services for small scale video projects in the Albuquerque area. ABQ Reels will be the go-to production studio in Albuquerque for its tailored approach and client-first focus.

The company will be the ultimate choice for customer service while providing the highest quality standards for production in the area. ABQ Reels Video Production will be able to guarantee the highest quality standards for all of its productions thanks to the latest and most innovative production equipment and oversight from industry veterans. The company’s team of highly qualified professionals experienced in production and project management will oversee each project from start to finish.

ABQ Reels Video Production History

ABQ Reels Video Production is owned and operated by Mark Johnson, an entertainment industry veteran who has over 25 years of experience working in video production. Now that Mark has experienced managing a production business, he is ready to start his own company, ABQ Reels Video Production. Mark is confident that his video production skills, combined with his understanding of business management, will enable him to run a profitable production company of his own. Mark is recruiting a team of highly qualified professionals to help manage the day-to-day complexities of video production – sales and marketing, client relationship management, budgeting, financial reporting, and project management.

Since incorporation, ABQ Reels Video Production has achieved the following milestones:

• Registered ABQ Reels Video Production, LLC to transact business in the state of New Mexico
• Has identified the ideal facility for lease to set up the business operations
• Reached out to numerous contacts to include former colleagues, employees, and production assistants to start putting a skilled core team together
• Began recruiting a staff of accountants, production assistants, and sales personnel to work at ABQ Reels Video Production

ABQ Reels Video Production Services

Industry analysis.

The production industry in the U.S. is a $26B market with approximately 6.3K businesses and over 46K employees nationwide. The outlook for the production market is positive with demand expected to remain steady over the next several years.

The production industry can be categorized by type of production. Some of the most common types of production companies are film production, TV production, commercial production, and post-production. Production companies perform a wide range of services including scripting, casting, hiring, planning, and logistics. Some production companies handle large-scale projects like major motion pictures, while others specialize in small-scale projects like commercials.

Some of the most significant demand drivers are the growing popularity of streaming content, consumer preferences for viewing on smartphones, and social media influence. All of these factors have contributed to increased demand for content, which leads to increased demand for production services.

Customer Analysis

Demographic profile of target market.

ABQ Reels Video Production will target businesses and individuals in Albuquerque that are looking for video production services for small-scale projects such as video for commercials and social media.

The precise demographics for Albuquerque, New Mexico are:

Customer Segmentation

ABQ Reels Video will primarily target the following customer profiles:

• Small Businesses in Albuquerque in need of commercial production services
• Mid-Sized Businesses in Albuquerque in need of commercial production services
• Individuals and groups of people in Albuquerque who need video production services for small personal or professional projects

Competitive Analysis

Direct and indirect competitors.

ABQ Reels Video Production will face competition from other companies with similar business profiles. A description of each competitor company is below.

VIEWR 1st Video Production

VIEWR 1st Video Production is one of the largest commercial production companies in Albuquerque, New Mexico. The company provides a variety of production services including content development, logistics, and film crew recruitment. VIEWR 1st Video Production specializes in creating commercials for local businesses to use in their advertising campaigns. VIEWR 1st Video Production aims to deliver high quality production through the latest production equipment and experienced crew. VIEWR 1st Video Production’s team of production professionals are well-known in the area for their outstanding commercial work.

Albuquerque’s Best Productions

Albuquerque’s Best Productions is a small production company established in 2005 that caters to local businesses and residents in Albuquerque, New Mexico and surrounding areas. Albuquerque’s Best Productions provides pre-to-post-production services for projects of various sizes and purposes. The company also provides tours of the production facility to local residents, businesses, and schools for a nominal fee. The owners of Albuquerque’s Best Production are former production assistants of some of the biggest production companies in the nation so they understand the production process from start to finish.

SPESHAL EFFEX

SPESHAL EFFEX is a trusted Albuquerque, New Mexico-based production company that provides superior production services to clients in Albuquerque and the surrounding areas. Established in 2018, the company is able to provide a wide variety of production services using its state-of-the-art production equipment. SPESHAL EFFEX serves local business owners, students, and individuals on small-to-large scale video projects. The company prides itself on being the number one choice for innovative special effects used in all of its videos.

Competitive Advantage

ABQ Reels Video Production will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

ABQ Reels Video Production will offer the unique value proposition to its clientele:

• The company is able to leverage the expertise of its leadership team to provide customers with the best possible production process from knowledgeable industry veterans and project management professionals.

Promotions Strategy

The promotions strategy for ABQ Reels Video Production is as follows:

Social Media Marketing

The company’s marketing director will create accounts on social media platforms such as LinkedIn, Twitter, Instagram, Facebook, TikTok, and YouTube. He will ensure ABQ Reels Video Production maintains an active social media presence with regular updates and fun content to get customers excited about production.

Professional Associations and Networking

ABQ Reels Video Production will become a member of professional associations such as the American Production Company Association, Albuquerque Video Production Society, and the New Mexico Video Production Association. The leadership team will focus their networking efforts on expanding the company’s vendor and client network.

Print Advertising

ABQ Reels Video Production will invest in professionally designed print ads to display in programs or flyers at industry networking events. The company will also send direct mailers to local businesses who are in the target market.

Website/SEO Marketing

ABQ Reels Video Production will utilize the in-house marketing director that designed the print ads to also design the company website. The website will be well organized, informative, and list all the services that ABQ Reels Video is able to provide. The website will also list information on the company’s events and client success stories.

The marketing director will also manage ABQ Reels Video’s website presence with SEO marketing tactics so that when someone types in a search engine “Albuquerque production company” or “video production near me”, ABQ Reels Video Production will be listed at the top of the search results.

The pricing of ABQ Reels Video Production will be moderate and on par with competitors so customers feel they receive value when purchasing the company’s production services.

Operations Plan

The following will be the operations plan for ABQ Reels Video Production.

Operation Functions:

• Mark Johnson will be the CEO and Production Manager of the company. He will oversee the production staff, production process, and the production equipment. Mark has spent the past year recruiting the following staff:
• Emily Martinez – Chief Operating Officer who will manage the budgeting, vendor and customer relationships, and day-to-day logistics.
• John Miller – Accountant/Bookkeeper will provide all accounting, tax payments, and monthly financial reporting.
• Steve Smith – Marketing Director who will oversee all marketing strategies for the company and manage the website, social media, and outreach.

Milestones:

ABQ Reels Video Production will have the following milestones complete in the next six months.

12/1/2022 – Finalize lease on the facility

12/15/2022 – Finalize personnel and staff employment contracts for the ABQ Reels Video Production management team

1/1/2023 – Begin build-out of the facility, purchase equipment, and set up for production

1/15/2023 – Begin networking at industry events and implement the marketing plan

2/15/2032 – Finalize contracts for initial production assistants, sales personnel, and office staff

3/15/2023 – ABQ Reels Video Production officially opens for business and starts taking on projects

Financial Plan

Key revenue & costs.

The revenue drivers for ABQ Reels Video Production are the fees charged to customers in exchange for the company’s production services. When it comes to pricing, the studio will monitor production costs, average prices charged by competitors, and market demand to ensure its prices will generate a healthy profit margin.

The cost drivers will be the overhead costs required in order to staff a production company. The expenses will be the payroll cost, utilities, equipment and supplies, and marketing materials.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average number of minutes produced per month: 12,000
• Average fees per month: $36,000
• Overhead costs per year: $840,000

Financial Projections

Income statement, balance sheet, cash flow statement, production company business plan faqs, what is a production company business plan.

A production company business plan is a plan to start and/or grow your production company business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your production company business plan using our Production Company Business Plan Template here .

What are the Main Types of Production Companies?

There are a number of different kinds of music companies , some examples include: Feature Film Production, Commercial Production, Post Production, and Niche Production Company.

How Do You Get Funding for Your Production Company Business Plan?

Production companies are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding. This is true for a business plan for a film production company  or a film production company business plan.

What are the Steps To Start a Production Company?

Starting a production company  can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Video Production Business Plan - The first step in starting a business is to create a detailed video production company business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your production company . This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your production company  is in compliance with local laws.

3. Register Your Production Company   - Once you have chosen a legal structure, the next step is to register your production company  with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your production company , so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Production Company Equipment & Supplies - In order to start your production company , you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your production company . This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

Business process reengineering (BPR) is the radical redesign of core business processes to achieve dramatic improvements in performance, efficiency and effectiveness. BPR examples are not one-time projects, but rather examples of a continuous journey of innovation and change focused on optimizing end-to-end processes and eliminating redundancies. The purpose of BPR is to streamline  workflows , eliminate unnecessary steps and improve resource utilization.

BPR involves business process redesign that challenges norms and methods within an organization. It typically focuses on achieving dramatic, transformative changes to existing processes. It should not be confused with  business process management (BPM) , a more incremental approach to optimizing processes, or business process improvement (BPI), a broader term that encompasses any systematic effort to improve current processes. This blog outlines some BPR examples that benefit from a BPM methodology.

Background of business process reengineering

BPR emerged in the early 1990s as a management approach aimed at radically redesigning business operations to achieve business transformation. The methodology gained prominence with the publication of a 1990 article in the Harvard Business Review, “Reengineering Work: Don’t Automate, Obliterate,” by Michael Hammer, and the 1993 book by Hammer and James Champy, Reengineering the Corporation . An early case study of BPR was Ford Motor Company, which successfully implemented reengineering efforts in the 1990s to streamline its manufacturing processes and improve competitiveness.

Organizations of all sizes and industries implement business process reengineering. Step 1 is to define the goals of BPR, and subsequent steps include assessing the current state, identifying gaps and opportunities, and process mapping.

Successful implementation of BPR requires strong leadership, effective change management and a commitment to continuous improvement. Leaders, senior management, team members and stakeholders must champion the BPR initiative and provide the necessary resources, support and direction to enable new processes and meaningful change.

BPR examples: Use cases

Streamlining supply chain management.

Using BPR for supply chain optimization involves a meticulous reassessment and redesign of every step, including logistics, inventory management and procurement . A comprehensive supply chain overhaul might involve rethinking procurement strategies, implementing just-in-time inventory systems, optimizing production schedules or redesigning transportation and distribution networks. Technologies such as supply chain management software (SCM), enterprise resource planning (ERP) systems, and advanced analytics tools can be used to automate and optimize processes. For example, predictive analytics can be used to forecast demand and optimize inventory levels, while blockchain technology can enhance transparency and traceability in the supply chain.

• Improved efficiency
• Reduced cost
• Enhanced transparency

Customer relationship management (CRM)

BPR is a pivotal strategy for organizations that want to overhaul their customer relationship management (CRM) processes. Steps of business process reengineering for CRM include integrating customer data from disparate sources, using advanced analytics for insights, and optimizing service workflows to provide personalized experiences and shorter wait times.

BPR use cases for CRM might include:

• Implementing integrated CRM software to centralize customer data and enable real-time insights
• Adopting omnichannel communication strategies to provide seamless and consistent experiences across touchpoints
• Empowering frontline staff with training and resources to deliver exceptional service

Using BPR, companies can establish a comprehensive view of each customer, enabling anticipation of their needs, personalization of interactions and prompt issue resolution.

• 360-degree customer view
• Increased sales and retention
• Faster problem resolution

Digitizing administrative processes

Organizations are increasingly turning to BPR to digitize and automate administrative processes to reduce human errors. This transformation entails replacing manual, paper-based workflows with digital systems that use technologies like Robotic Process Automation (RPA) for routine tasks.

This might include streamlining payroll processes, digitizing HR operations or automating invoicing procedures. This can lead to can significant improvements in efficiency, accuracy and scalability and enable the organization to operate more effectively.

• Reduced processing times
• Reduced errors
• Increased adaptability

Improving product development processes

BPR plays a crucial role in optimizing product development processes, from ideation to market launch. This comprehensive overhaul involves evaluating and redesigning workflows, fostering cross-functional collaboration and innovating by using advanced technologies. This can involve implementing cross-functional teams to encourage communication and knowledge sharing, adopting agile methodologies to promote iterative development and rapid prototyping, and by using technology such as product lifecycle management (PLM) software to streamline documentation and version control.

BPR initiatives such as these enable organizations to reduce product development cycle times, respond more quickly to market demands, and deliver innovative products that meet customer needs.

• Faster time-to-market
• Enhanced innovation
• Higher product quality

Updating technology infrastructure

In an era of rapid technological advancement, BPR serves as a vital strategy for organizations that need to update and modernize their technology infrastructure. This transformation involves migrating to cloud-based solutions, adopting emerging technologies like artificial intelligence (AI) and machine learning (ML) , and integrating disparate systems for improved data management and analysis, which enables more informed decision making. Embracing new technologies helps organizations improve performance, cybersecurity and scalability and positioning themselves for long-term success.

• Enhanced performance
• Improved security
• Increased innovation

Reducing staff redundancy

In response to changing market dynamics and organizational needs, many companies turn to BPR to restructure their workforce and reduce redundancy. These strategic initiatives can involve streamlining organizational hierarchies, consolidating departments and outsourcing non-core functions. Optimizing workforce allocation and eliminating redundant roles allows organizations to reduce costs, enhance operational efficiency and focus resources on key priorities.

• Cost savings
• Increased efficiency
• Focus on core competencies

Cutting costs across operations

BPR is a powerful tool to systematically identify inefficiencies, redundancies and waste within business operations. This enables organizations to streamline processes and cut costs.

BPR focuses on redesigning processes to eliminate non-value-added activities, optimize resource allocation, and enhance operational efficiency. This might entail automating repetitive tasks, reorganizing workflows for minimizing bottlenecks, renegotiating contracts with suppliers to secure better terms, or by using technology to improve collaboration and communication. This can enable significant cost savings and improve profitability.

• Lower costs
• Enhanced competitiveness

Improving output quality

BPR can enhance the quality of output across various business processes, from manufacturing to service delivery. BPR initiatives generally boost key performance indicators (KPIs).

Steps for improving output quality involve implementing quality control measures, fostering a culture of continuous improvement, and using customer feedback and other metrics to drive innovation.

Technology can also be used to automate processes. When employees are freed from distracting processes, they can increase their focus on consistently delivering high-quality products and services. This builds customer trust and loyalty and supports the organization’s long-term success.

• Higher customer satisfaction
• Enhanced brand image

Human resource (HR) process optimization

BPR is crucial for optimizing human resources (HR) processes. Initiatives might include automating the onboarding process with easy-to-use portals, streamlining workflows, creating self-service portals and apps, using AI for talent acquisition , and implementing a data-driven approach to performance management.

Fostering employee engagement can also help attract, develop and retain top talent. Aligning HR processes with organizational goals and values can enhance workforce productivity, satisfaction and business performance.

• Faster recruitment cycles
• Improved employee engagement
• Strategic talent allocation

BPR examples: Case studies

The following case study examples demonstrate a mix of BPR methodologies and use cases working together to yield client benefits.

Bouygues becomes the AI standard bearer in French telecom

Bouygues Telecom , a leading French communications service provider, was plagued by legacy systems that struggled to keep up with an enormous volume of support calls. The result? Frustrated customers were left stranded in call lines and Bouygues at risk of being replaced by its competitors. Thankfully, Bouygues had partnered with IBM previously in one of our first pre- IBM watsonx™ AI deployments. This phase 1 engagement laid the groundwork perfectly for AI’s injection into the telecom’s call center during phase 2.

Today, Bouygues greets over 800,000 calls a month with IBM watsonx Assistant™, and IBM watsonx Orchestrate™ helps alleviate the repetitive tasks that agents previously had to handle manually, freeing them for higher-value work. In all, agents’ pre-and-post-call workloads were reduced by 30%. 1 In addition, 8 million customer-agent conversations—which were, in the past, only partially analyzed—have now been summarized with consistent accuracy for the creation of actionable insights.

Taken together, these technologies have made Bouygues a disruptor in the world of customer care, yielding a USD 5 million projected reduction in yearly operational costs and placing them at the forefront of AI technology. 1

Finance of America promotes lifetime loyalty via customer-centric transformation

By co-creating with IBM, mortgage lender Finance of America was able to recenter their operations around their customers, driving value for both them and the prospective home buyers they serve.

To accomplish this goal, FOA iterated quickly on both new strategies and features that would prioritize customer service and retention. From IBM-facilitated design thinking workshops came roadmaps for a consistent brand experience across channels, simplifying the work of their agents and streamlining the application process for their customers.

As a result of this transformation, FOA is projected to double their customer base in just three years. In the same time frame, they aim to increase revenue by over 50% and income by over 80%. Now, Finance of America is primed to deliver enhanced services—such as debt advisory—that will help promote lifetime customer loyalty. 2

BPR examples and IBM

Business process reengineering (BPR) with IBM takes a critical look at core processes to spot and redesign areas that need improvement. By stepping back, strategists can analyze areas like supply chain, customer experience and finance operations. BPR services experts can embed emerging technologies and overhaul existing processes to improve the business holistically. They can help you build new processes with intelligent workflows that drive profitability, weed out redundancies, and prioritize cost saving.

1. IBM Wow Story: Bouygues Becomes the AI Standard-Bearer in French Telecom. Last updated 10 November 2023.

2. IBM Wow Story: Finance of America Promotes Lifetime Loyalty via Customer-Centric Transformation. Last updated 23 February 2024.

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