1 CE Management and Planning Diane Bishton – K229 Planning & Control - Performance

2 In this lecture We will Review the need to translate high-level plans into more detailed Operational ones Introduce a range of Operational Plans, concentrating on those of Production, Materials, Financial, HR & Marketing Consider the notion of Control

3 Introduction In an earlier lecture we saw that the Planning Process includes an Implementation stage. Implementation requires that we : Allocate responsibility for completion of the Tasks within the Plan Prepare Budgets in support of the Tasks Schedule the Tasks (perhaps using CPA, PERT etc) Co-ordinate the work done Include review or ‘check’ points to evaluate progress Include procedures for altering the Plan if necessary

4 Operational Planning Implementation is Action Oriented Operational Plans act as a bridge between Strategic & Day-to-day activities in that they should be based in overall Strategic Objectives, yet include the contribution of managers at Tactical levels who are ultimately responsible for getting the Operational work done.

5 Production Planning Preproduction n What Quantities & at what Rate ? n What Production method(s) & Tools ? n Work study (Time & Motion) Production Examples of data needed Per Product : Designs; Dimensions; Raw Materials & Components i.e. ‘Bills of Materials’ or ‘Parts Lists’; Job Description (e.g. Assembly instructions); Inspection instructions; Tolerances & Quality Control; Packaging; Loading & Despatch Whole Line : Work Priorities & constraints; Machine, Labour & Materials etc availability, including Machine maintenance

6 The Production Plan What - will be produced Where - what tools, equipment etc will be needed. Machine loadings. Assembly, storage & packaging areas etc. When - raw materials, components or sub assemblies will be needed & in what quantities. Scheduling start & finish times. Materials availability plan. How - assemblies & finished goods will be built, tested (includes sampling rates), packaged, stored etc. Who - what skilled or other labour & when they’re needed - yet more scheduling & resource planning

7 Capacity Planning Capacity Relating Production facilities to forecast demand requirements & avoiding hold-ups (bottlenecks), too much idle time while looking at future needs Examples of data needed Number of Resource Hours available, (includes machines & labour), and Output per machine. Have to account for down time - maintenance & MTBF (Mean Time Between (or Before) Failures) & MTTR (Mean Time To Repair), holidays, sickness, set-up time (e.g. changing cutting tools, positioning work pieces), number of shifts, inspection frequency etc.

8 Locating Production Facilities (from Wild, R 1995 p 98)

9 MRP Scheduling the manufacture of dependent (rely on something else) items e.g. sub-assemblies, to minimise work-in-progress (WIP) stock while satisfying customer demand. Synchronises orders & delivery. Examples of data needed Accurate forecasts of the demand for Finished Goods. If MRP is extended to Just-In-Time (JIT) then the daily demand needs to be known Materials Requirements Planning

10 Financial Planning Finance Involves budgeting, choice of supply of short-term funds, knowing fund flow & cash flow, all to keep the organisation liquid - able to meet its short-term debts and able to replace plant etc. when required Examples of data needed Knowledge of accounts receivable & accounts payable over varying time periods - both short & longer-term, to understand the timing of expenditure e.g. cash sales, payments against credit sales, wages, salaries, NI, tax (including VAT - payable & receivable), bad debt forecasts etc.

11 HR Attempts to forecast how many and with what skills / competences/employees will be required. Includes schemes for hiring, training, movement, redundancy & retirement of people. Examples of data needed Demographic - gender, ages, mobility, & education data - skilled, semi-skilled, unskilled, level of qualification. Forecasts of technological change - e.g. more or fewer knowledge workers. Sales & market forecasts. Social change forecasts e.g. extent of maternity & paternity leave & benefits, employment protection, government subsidies, legal & other requirements for working environment - Health & Safety, toilets, parking spaces etc. Job requirements to identify gaps, market & competitor pay & benefits Human Resources Planning

12 Marketing & Media Planning Marketing & Media Quantify & specify targets for the marketing mix - Product, Price, Place, Promotion Examples of data needed Sales forecasts, Market and competitor research, planned new products & distributors etc., marketing budget, media schedules & demographics e.g. ages, gender, family units, income groups i.e. Customer profiles, Staff capability, motivation & deployment, required product market share & profit margin, Sales & Distribution infrastructure, timing of advertising & type of media chosen

13 Further References Bennett R (1999) Corporate Strategy 2e Chapter 18, Harlow UK: Pearson Education Ltd Wild R (1995) Production and Operations Management 5e London : Cassell Educational Ltd Jargon buster for Enterprise Resource Planning Writing a Marketing plan – advice from the gubmint.