[Before putting a fabric on a heat source, one should determine that there is no fire hazard.]
Hatmana is forbidden Rabbinically on Shabbat (1) if the hatmana is done on Shabbat or (2) if the hatmana creates a situation in which heat is being added to the insulated food, even if it was set up before Shabbat.[1] Regarding your question, since the covered food is sitting on a heat source, even if you set things up before Shabbat, you must not allow the food to be covered in a manner of hatmana.
Insulation is forbidden as hatmana only when the covering is done in a relatively extensive manner. Two pertinent parameters are the percentage of the pot that is covered and the proximity of the covering to the pots.
The standard assumption is that a situation is considered hatmana only if virtually the entire pot is covered. It is sufficient for a somewhat significant amount of the pot to be exposed to prevent this problem.[2] (There is an opinion that if the majority of the pot is covered, it is hatmana, but this is against the consensus.[3]) Depending on the size of the pot(s) and of the covering, there are often sections of the pot towards the bottom of its side walls that are not covered. Certainly, one can be careful to arrange things this way and thereby avoid the problem altogether.
Another factor in insulation is the degree to which the covering “hugs” the pots. The Rosh[4] writes that if the covering does not touch the walls of the pot, such that there is significant space between them, then it is not hatmana, and we posit that this is so even if it touches some sides but not all of them.[5]
Let us analyze our case. One might argue that if there is more than one pot involved, the covering will never touch all the sides of all the individual pots, as there will be some sections facing inward, and the covering will probably not hug the whole exterior, considering the shape that will be formed. Nevertheless, we must consider the aggregate of the pots as a single unit, and if the pots as a unit are covered as normal when draping a covering over them, it is hatmana.[6]
There are at least three ways to have the plata blanket pass this second test: 1) Some such products are sufficiently stiff so that they cannot turn at an angle that allows them to hug the sides of the pots. 2) One could put a board on top, extending beyond the pots so that even if the blanket hangs down, it does so beyond where the pots reach.[7] 3) One can put an empty pot on one side to separate the blanket from the relevant set of pots at least on that side.[8]
There is also room to present a more sweeping leniency when it comes to doing hatmana before Shabbat on hot plates. The Ohr Zarua[9] says that if one seals the oven in which the hatmana is taking place before Shabbat, there is no prohibition of hatmana, because there is no longer a concern that he will forget and stoke the coals. This leniency is accepted by some poskim,[10] and Rav Ovadia Yosef[11] maintains that the same leniency applies to a non-adjustable hot plate. Nevertheless, it is better to follow one of the steps above in order to preclude hatmana issues.