Semester 1 Session 11a Planning and control - performance Objectives

Transcription

1 Management and Planning SEMESTER 1 September 2009 Semester 1 Session 11a Planning and control - performance Objectives To be able to describe and discuss The role played by Planning, Monitoring & Control within the Management remit An overview of some control systems & procedures A Stock Control example in detail An overview of Budgetary Control And to apply these concepts in a given business scenario that includes USING the techniques taught. These are all likely to be tested in coursework and in the examination. C:\Allwork\geoff\Modules\M&P\M&P session 11a header - Management and Control - performance.doc Created by Geoff Leese

2 CE Planning & Control - Performance CE Management and Planning Diane Bishton K229 (d.k.bishton@staffs.ac.uk) Planning & Control - Performance 1 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 2 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 3 1

3 CE Planning & Control - Performance 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. 4 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 5 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 6 2

4 CE Planning & Control - Performance 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. 7 Locating Production Facilities (from Wild, R 1995 p 98) 8 Materials Requirements Planning 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 9 3

5 CE Planning & Control - Performance 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. 10 Human Resources Planning 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 11 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 12 4

6 CE Planning & Control - Performance 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 er?topicid=

7 Management and Planning SEMESTER 1 September 2009 Semester 1 Session 11a Planning and control - performance Additional reading 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 Tutorial questions No tutorial this week assignment work. C:\Allwork\geoff\Modules\M&P\M&P session 11a tutorial - Planning and control - performance.doc Created by Geoff Leese

8 Management and Planning SEMESTER 1 September 2009 Semester 1 Session 11b Measurement and Objectives control To be able to describe and discuss The role played by Planning, Monitoring & Control within the Management remit An overview of some control systems & procedures A Stock Control example in detail An overview of Budgetary Control And to apply these concepts in a given business scenario that includes USING the techniques taught. These are all likely to be tested in coursework and in the examination. C:\Allwork\geoff\Modules\M&P\M&P session 11b header - Measurement and Control.doc Created by Geoff Leese

9 CE Measurement & Control CE Management and Planning Diane Bishton K229 Measurement & Control 1 In this lecture We will Emphasise that Planning, Monitoring & Control all come within the Management remit Introduce some control systems & procedures Consider a Stock Control example in detail Finish with an overview of Budgetary Control that gives a glimpse of how strategy & policy can finally be made clearer through the actual financial implications of corporate plans 2 Introduction Strategy & policy are all very well, but the bottom line is, that there is a bottom line People have to put grand plans into practice. How will they actually know that what they are doing is appropriate? 3 1

10 CE Measurement & Control The Control Function 3 aspects : Setting standards & targets Monitoring activities, comparing actual against target Taking action to improve Control needs : Timely inputs Rapid ways to evaluate target against actual Timely Output directed to the right place & in a form that can be understood & acted on 4 5 Examples of Control Systems Control Systems are very varied (some have already been seen in previous lectures) Organisation charts and manuals Delegation of work to subordinates PERT (Project Evaluation & Review Technique) Ratio Analysis Feedback & Feedforward MBO (Management By Objectives) Exception Reporting Budgetary Control Etc. Stock Control Aims : to provide predetermined levels of service at minimum cost Functional requirements : Stock Recording Demand Forecasting Calculation of ROL (Reorder Level) & ROQ (Reorder Quantity) To control stocks they first need to be classified. High usage or high value items need higher levels of control than low usage / obsolete / dead items 6 2

11 CE Measurement & Control Using a Pareto Curve to Classify Stock 7 Determine the Annual Usage Value (AUV) of each Item Rank the Items in descending order of AUV Determine the Cumulative Usage (i.e. the total of AUVs so far) Determine the Cumulative Usage as a percentage of total AUV Determine the Cumulative percentage of Items Plot the Cumulative Usage percentage against the Cumulative Items percentage Example - shows stock Item AUVs Part No Stock Value held ( 000s) AUV ( 000s) Example - ranked AUVs Part No. AUV ( 000s) Cum. AUV ( 000s) Cum. AUV as % total AUV Cum. % of Items

12 CE Measurement & Control Charted AUVs & ABC classification % of total AUV A : top 10% items, first 60% usage B : next 30% items, next 30% usage C : last 60% items, lowest 10% usage 0:100 % Items 10 A B C Some problems in Stock Control Matching Demand with Usage storage, stock holding & lead times (to replenish stock) are key factors Any Trends & Seasonal Demands need to be identified. Highly dependent on adequate feedback mechanisms being in place & being used! 11 Some problems in Stock Control Stock holding is expensive - not just because of space requirements, but also keeping stock secure (theft, damage etc) & turned around Demand forecasting & calculation of ROL & ROQ can be very inaccurate if done manually 12 4

13 CE Measurement & Control Budgetary Control Budgets relate to Plans : by quantitatively specifying the organisation s resource allocations, department responsibilities & project completion schedules They enable co-ordination and control by allowing delegation of authority to manage a budget They give an overall view of spending They limit spending They can be used for performance appraisal & MBO can you stay within your budget (& if you can t, why not?) 13 Further References Bennett R (1999) Corporate Strategy 2e Chapter 19 Harlow UK: Pearson Education Ltd topicid=

14 Management and Planning SEMESTER 1 September 2009 Semester 1 Session 11b Measurement and control Additional reading Bennett R (1999) Corporate Strategy 2e Chapter 19 Harlow UK: Pearson Education Ltd Tutorial questions No tutorial this week assignment work. C:\Allwork\geoff\Modules\M&P\M&P session 11b tutorial - measurement and control.doc Created by Geoff Leese