Aggregate planning is an operational activity critical to the organization as it looks to balance long-term strategic planning with short term production success. Following factors are critical before an aggregate planning process can actually start;
- A complete information is required about available production facility and raw materials.
- A solid demand forecast covering the medium-range period
- Financial planning surrounding the production cost which includes raw material, labor, inventory planning, etc.
- Organization policy around labor management, quality management, etc.
For aggregate planning to be a success, following inputs are required;
- An aggregate demand forecast for the relevant period
- Evaluation of all the available means to manage capacity planning like sub-contracting, outsourcing, etc.
- Existing operational status of workforce (number, skill set, etc.), inventory level and production efficiency
Aggregate planning will ensure that organization can plan for workforce level, inventory level and production rate in line with its strategic goal and objective.