The nature of planning & control
Planning & control is concerned with the reconciliation
between what the market requires & what the operation’s resources can
deliver
- Provide the systems, procedures & decisions which bring different aspects of supply & demand together
- Ensure that the operation’s processes run effectively & efficiently
- Produce products & services as required by customers
- Planning concerns what should happen in the future
- A statement of intention
- Control copes with changes
- An ‘intervention’ will need to be made in the operation to bring it back ‘on track’
Nature of planning & control
The nature of planning & control activities changes over
time
- Long term
- Medium-term
- Short-term
Long-term planning & control
- Use aggregated demand forecasts
- Determine resources in aggregated form
- Objectives set in largely financial terms
Medium-term planning & control
- Uses partially dis-aggregated demand forecasts
- Determines resources & contingencies
- Objectives set in both financial & operations terms
Short-term planning & control
- Uses totally dis-aggregated forecasts or actual demand
- Makes interventions to resources to correct deviations from plans
- Ad-hoc consideration of operations objectives
Supply & demand affect planning & control
- Uncertainty in supply & demand
- Dependent & independent demand
- Dependent demand: demand which is relatively predictable because it is dependent upon some factor which is known
- Independent demand: demand without having any firm forward visibility of customer orders
- Responding to demand
- Resource-to-order: start the process of producing goods or services when it needs to with taking resources
- Make-to-order: make the actual product or service only to a firm customer order
- Make-to-stock: produce goods or services ahead of any firm orders ‘to stock’
- P:D ratio
Contrasts of the total length of time customers have to wait between asking for the product or service & receiving it, demand time D, & the total throughput time P.
- P & D times depend on the operation
- P: D ratios indicate the degree of speculation
Throughput time is how long the operation takes to
obtain the resources, & produce & deliver the product or service.
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