What Is Aggregate Planning? Strategies & Tips

What Is Aggregate Planning? Strategies & Tips

Aggregate planning is a method for analyzing, developing and maintaining a manufacturing plan with an emphasis on uninterrupted, consistent production. It is most often focused on targeted sales forecasts, inventory management and production levels in the mid-term (3-to-18-month) future. Aggregate planning defines the necessary production inputs for a good or service (including facilities, workforce, raw materials and inventory levels) to maintain consistent delivery dates, all while keeping costs down. Project management software facilitates aggregate planning, such as ProjectManager, which helps manufacturers manage costs and resources to allow for uninterrupted production. To create an aggregate plan, you must determine the number of units that are produced over a specific time frame, which is the capacity, and number of units needed, which is customer demand.

Aggregate planning is the goal of determining the level of production, inventory and workforce required to respond to fluctuating demand in the medium term. It involves pricing strategies, advertising/promotion, back ordering, new demand creation, lay off or hire employees, overtime, subcontracting or use of a temporary workforce, and resource management. Aggregate production planning also lets manufacturers know what staff, materials, output rates, timeline estimates and budget costs they need. By reducing production during periods of weak demand, companies can save money on labor and materials.