The Business Planning Process.ppt

1、Master Planning of Resources,Session 1 The Business Planning Process,2,Course Objectives,To explain the principles and processes of master planning of resources To describe the techniques and methods of demand management, sales and operations planning, and master scheduling To examine the developmen

2、t of operations plans in different business environments To explain the process for developing, validating, and evaluating performance at all levels of master planning of resources,3,Master Planning of Resources,Session 1:The Business Planning Process Session 2:Forecasting Demand Session 3:Demand Ma

3、nagement and Customer Service Session 4:Distribution Planning Session 5:The Sales and Operations Planning Process Session 6:The Master Scheduling Process Session 7:Managing the Master Scheduling Process Session 8:Measuring Performance and Validatingthe Plan,4,Session 1 Objectives,Identify and descri

4、be the elements ofmaster planning of resources Identify and describe the levels of the planning hierarchy Describe and distinguish the roles in the planning process that product volume and product mix play Describe the elements of business planning Identify and describe the inputs to a business plan

5、 Identify and describe several manufacturing environments,5,Master Planning of Resources,Demand Management Forecasting Distribution planning Order servicing Sales and Operations Planning Integrates the plans of the business Sales Marketing Utilizes resource planning Master Scheduling Includes the de

6、velopment of Master production schedule (MPS) Final Assembly Schedule (FAS) Utilizes rough-cut capacity planning (RCCP),A grouping of business processes that includes,Development Manufacturing,Sourcing Financial,6,Master Planning of Resources Model,Demand,Supply,SALES AND OPERATIONS PLANNING,MASTER

7、SCHEDULING,PRODUCTION PLAN,MASTER PRODUCTION SCHEDULE,Detailed Scheduling and Planning,Execution and Control of Operations,Priority Information,Feedback,FORECASTING & DEMAND MANAGEMENT,CAPACITY MANAGEMENT,Strategic Planning,Business Planning,7,Demand Management,Forecasting,Distribution planning,Orde

8、r servicing,8,Sales and Operations Planning,Business Plan,Sales and Operations Planning,Production Plan,Resource Planning,9,Master Scheduling,Production Plan,Master Scheduling,Master Production Schedule,Rough-Cut Capacity Planning,10,The Balancing Act,Demand,Supply,Demand Forecasts,Actual Orders,Pro

9、duction Orders,Purchase Orders,1-11,Product Volume and Product Mix,Volume Establishes the big picture How much? Rates (selling/production) Product families Planned in sales and operations planning,Mix The details Which ones? Customer orders Individual products Planned in master scheduling,12,The Pla

10、nning Hierarchy,Strategic Planning,Planning Detail,Planning Horizon,Less,Near Term,More,Long Term,Business Planning,Sales and Operations Planning,Master Scheduling,13,Long-Range Strategic Planning Sales and Operations Planning Budgeting,Planning Horizons,1,2,3,4,5,1,2,1,2,1,Source: Adapted from Ling

11、, Richard C., and Walter E. Goddard. Orchestrating SuccessImprove Control of the Business withSales and Operations Planning. John Wiley & Sons, Inc. (1988),1,Legend: = Time period in years,BUSS I N ESS PLANN I NG,14,Source: APICS Dictionary, Ninth ed. 1998,Business Plan,A statement of Long-range str

12、ategy Revenue, cost, and profit objectives usuallyaccompanied by Budgets Projected balance sheet Cash flow projections,15,Business Plan (cont.),Common features of the business plan include: The nature of the firm Locations and facilities Organization and people Levels of processing technology The ty

13、pe and nature of capital resources required Primary stakeholders interests,16,Business Plan (cont.),The Market Location Growth rates Changing needs of customers Regional economic considerations and business conditions as they affect customer needs The Business Environment Major competitors Projectio

14、ns of business growth Availability of financial resources Emerging technologies,1-17,Key Business Goals,Growth Profitability Return on Investment Market Share Customer Service Reputation Company Value,18,Business Stakeholders,The Community The Management Team The Owners and Shareholders The Members

15、of Associations The Employees The Customers The Suppliers Others,1-19,Benchmarking,Strategies Capabilities Processes Costs Logistics Systems Others,1-20,Business Plan Strategic Data Sources,Environmental scanning Marketplace needs Company capabilities Financial targets Strategic goals,Demographics,

16、government and business regulations, economic conditions, competitive environment Customer orders, market research, focus groups, and forecasts Personnel skill levels, available resources Profit, cash flow, and revenue growth Levels of desired customer service, planned quality improvements, cost red

17、uction goals, and productivity improvements,21,Finished Products Manufacturing Process Raw Materials,Manufacturing Environment Characteristics,MTS,MTO or ETO,ATO or Mass Customization,22,Volume/Variety Relationships,Product Volume,Product Variety,High,Low,High,Engineer-to-Order,Make-to-Order,Assembl

18、e-to-Order,Make-to-Stock,Mass Customization,23,P:D Ratio,Production time,Delivery time,1-24,Manufacturing Environment and Supply Process Strategy,Supply Process Project, Discrete Discrete Batch Intermittent Batch Continuous Flow or Repetitive Flexible high volume,Manufacturing Environment Strategy E

19、ngineer-to-Order Make-to-Order Assemble-to-Order Make-to-Stock Mass Customization,1-25,Manufacturing Environment Strategies,Make-to-Order Production initiated after receipt of customer order Concerns: Production schedule, flexible facilities Lead time may be lengthy,Engineer-to-Order Design and prod

20、uction initiated only after receipt of customer order Concerns: Availability of technical resources, resource availability, flexible facilities Lead time may be lengthy,26,Make-to-Stock Product shipped from finished goods, “off the shelf” Concerns: Inventory costs, stock distribution Forecast error

21、could be expensive (applies to all strategies),Assemble-to-Order A customer-ordered item where some or all subcomponents used in assembly, packaging, and finishing processes are planned and stocked in anticipation of a customer order Concerns: Rapid delivery, customized variations,Manufacturing Envi

22、ronment Strategies,1-27,Service Delivery Characteristics,Customized,Standard,28,Sales and Operations Planning,Formal business process Balances demand and supply Product Families (not items) Volume, not mix Monthly review cycle Both product and financial units,Source: Wallace, Tom F. Sales and Operat

23、ions Planning, A How-To Guide, T.F. Wallace & Co. 1999.,29,Sales and Operations Planning Benefits,Links business plan to departmental operations Provides a means to work for a common goal Provides a realistic production plan for meeting business objectives Eliminates counterproductive “hidden” or un

24、ilateral decisions,30,Product Families,Represent how the product is presented to the market Logical groupings based on similar sales and manufacturing requirements Should be meaningful in terms of volume of sales generated Ideally should be no more than 6-12 product groupings per business unit,31,Pr

25、oduct /Service Hierarchy,Stockkeeping Unit (SKU),Package Size,Catalog Number/Model/Brand,Product Subfamily,Product Family,Business Unit,Total Company,Source: Wallace, Tom F. Sales and Operations Planning, A How-To Guide, T.F. Wallace & Co. 1999.,32,Resource Planning,Conducted at the business plannin

26、g and sales and operations planning levels, but normally based on the production plan Addresses long-range capacity Establishing Measuring Adjusting limits Long-term resource acquisition Always requires top-management approval,33,Bill of Resources,A bill of resources is a listing of the required amo

27、unt of constraining resources needed to manufacture one unit of a selected item or family. These could include the following resources: Labor Materials or components Facilities Equipment Research and development Finances,34,Source: APICS Dictionary, Ninth ed. 1998,Master Scheduling,Formal business p

28、rocess Balances demand and supply For specific products and end items Subject to independent demand Used for order promising Sets boundaries for material and capacity planning,35,Rough-Cut Capacity Planning,Formal business process Used to convert the MPS into load projections on critical workcenters

29、 and supply processes Used to determine feasibility of the MPS,36,Session 1 Review,Identify and describe the elements of master planning of resources. Identify and describe the levels of the planning hierarchy. Describe and distinguish the roles in the planning process that product volume and produc

30、t mix play. Describe the elements of business planning. Identify and describe the inputs to a business plan. Identify and briefly describe several manufacturing environments.,Master Planning of Resources,Session 2 Forecasting Demand,38,Master Planning of Resources,Session 1:The Business Planning Pro

31、cess Session 2:Forecasting Demand Session 3:Demand Management and Customer Service Session 4:Distribution Planning Session 5:The Sales and Operations Planning Process Session 6:The Master Scheduling Process Session 7:Managing the Master Scheduling Process Session 8:Measuring Performance and Validati

32、ngthe Plan,39,Session 2 Objectives,Explain why forecasting is important Identify and describe general methods of forecasting Identify demand characteristics Describe considerations in using data for forecasts Outline the process of data decomposition,40,What Is a Forecast?,“An estimate of future dem

33、and. A forecast can be determined by mathematical means using historical data, it can be created subjectively by using estimates from informal sources, or it can represent a combination of both techniques.” APICS Dictionary, 9th ed.,41,Why Forecast?,To plan for the future by reducing uncertainty To

34、anticipate and manage change To increase communication and integration of planning teams To anticipate inventory and capacity demands and manage lead times To project costs of operations into budgeting processes To improve competitiveness and productivity through decreased costs and improved deliver

35、y and responsiveness to customer needs,1-42,Areas Impacted by the Forecast,Investment decisions Capital equipment decisions Inventory planning Capacity planning Operations budgets Lead-time management,43,Forecast System Design Issues,Determine information that needs to be forecasted Assign responsib

36、ility for the forecast Set up forecast system parameters Select forecasting models and techniques Collect data Test models Record actual demand Report accuracy Determine root cause of variance Review forecasting system for improved performance,44,General Forecasting Techniques,Qualitativebased on in

37、tuitive or judgmental evaluation Quantitativebased on computational projection of a numeric relationship,45,General Forecasting Data Sources,Intrinsicbased on historical patterns of the data itself from company data Extrinsicbased on external patterns from information outside the company,Demand,A ne

38、ed for a particular product or component,2-46,47,Sources of Demand,Demand can come from many sources: Consumers Customers Referrers Dealers Distributors Interplant Service parts,1-48,Demand Characteristics,Internal Factors Product promotion Product substitution,External Factors Random fluctuation Se

39、asonality Trend Economic cycle Changing customer preferences and demands,49,Seasonality,50,Seasonality Calculation,Measures seasonal variation of demand Relates the average demand in a particular period to the average demand for all periods,1-51,Calculation of Seasonal Index,Sales of Ice Cream,52,Ec

40、onomic Cycle,53,Pyramid Forecasting,Product/item volume (units),Product family volume (units/dollars),Total business volume (dollars),Roll Up Forecast,Force Down Adjustment,1-54,TechniquePyramid Forecasting Example,ROLL-UP Product-level forecast X1 units8,200 price$20.61 Family-level forecast Family

41、-adjusted forecast FORCE-DOWN,X1,X2,15,000 13,045,15,000 13,045, 4,845 = 5,571 units, 8,200 = 9,429 units,X2 units4,845 price$10.00 units13,045 Family avg price$16.67 units15,000,55,Pyramid Forecasting Using Revenue,2-55,56,2-56,Pyramid Forecasting Exercise,Historical Demand Product A Region 1 150 R

42、egion 2 300 Selling Price$4.50 Management has determined that next years demand will be $10,000 total. CALCULATE the projected demand in units for products A and B in each region.,Product B Region 1 300 Region 2 450 Selling Price$8.50,57,2-57,Pyramid Forecasting ExerciseSolution,Based upon historica

43、l demand A = 150 + 300 = 450 $4.50 = $2,025 B = 300 + 450 = 750 $8.50 = $6,375 Total = $8,400,A:Region 1 = 1.19 150 = 178.5 Region 2 = 1.19 300 = 357.0 B:Region 1 = 1.19 300 = 357.0 Region 2 = 1.19 450 = 535.5 178.5 + 357.0 = 536.5 $4.50 = $2,414.25 357.0 + 535.5 = 892.5 $8.50 = $7,586.25 $10,000.50

44、,= 1.19 (19% increase),$10,000 $8,400,58,Quantitative Techniques,Moving average Exponential smoothing Regression analysis Adaptive smoothing Graphical methods Econometric modeling Life-cycle modeling,59,Moving Average Forecasting,Advantages A simple technique that is easy to calculate It can be used

45、 to filter out random variation Longer periods provide more smoothing Limitations If a trend exists, it is hard to detect Moving averages lag trends,2-59,60,NEW FORECAST = a ACTUAL DEMAND + (1-a) OLD FORECAST NEW FORECAST = OLD FORECAST + a (ACTUAL DEMAND - OLD FORECAST),Exponential Smoothing,Provid

46、es a routine method of updating item forecasts Alpha is a weighting factor applied to the demand element Works well for items with fairly constant demand Is satisfactory for short-range forecasts Lags trends,2-60,61,2-61,Smoothing Factor,Referred to as Alpha (a) Determines the weight of historical d

47、ata on projection Sets responsiveness to changes in demand Range 0 a 1,62,2-62,Smoothing Factor (cont.),Determines how many periods of actual demand will influence forecast 1.00 = 1 period 0.50 = 3 periods 0.29 = 6 periods 0.15 = 12 periods 0.10 = 19 periods,63,0.1 Low weighting -most smoothing 0.9

48、High weighting - close to actual,Comparison of Exponential Smoothing Alpha Factors,Actual sales,2-63,64,2-64,Exponential Smoothing Examples,New forecast = Old forecast + smoothing factor (a) (actual sales - old forecast) Example: old forecast= 160, actual = 200, a = 0.1 new forecast= 160 + (0.1 (200

49、 - 160) = 160 + (0.1 40) = 164 Example: old forecast= 160, actual = 200, a = 0.8 new forecast= 160 + (0.8 (200 - 160) = 160 + (0.8 40) = 192 Adapted from: Manufacturing for Survival, B.R. Williams, Addison Wesley, 1996,65,Qualitative Techniques,Expert opinion Market research Focus groups Historical

50、analogy Delphi method Panel consensus,2-65,1-66,Internal (Intrinsic) Factors,Product life-cycle management Planned price changes Changes in the sales force Resource constraints Marketing and sales promotion Advertising,2-66,1-67,External (Extrinsic) Factors,Competition New customers Plans of major c

51、ustomers Government policies Regulatory concerns Economic conditions Environmental issues Weather conditions Global trends,2-67,1-68,Leading Indicators,Indicator (Causal Factor) Housing starts Birth rate Hits on a Web site Health trends Healthier lifestyle,Influences volume of Building materials Hom

52、e furnishings Baby products e-commerce sales Medical supplies Nutritional products Fitness products,2-68,69,New Product Introduction,Every new product/service is a calculated risk. Every new product/service has the potential to be the next Blockbuster Lifesaver Money loser Disaster Liability nightma

53、re.,2-69,70,2-70,Product Life Cycle,71,Focus ForecastingAssumptions/Methods,Assumptions The most recent past is the best indicator of the future One forecasting model is better than the others Methods All forecasting models for all items forecasted will be compared against recent sales history The m

54、odel that achieves the closest fit will be used to forecast this item this time Next time, a different model may be selected,2-71,1-72,Data Issues for Forecasting,Availability of data Consistency of data Amount of history required Forecast frequency Frequency of model reevaluation Cost and time issu

55、es Recording true demand Order date vs. ship date Product units vs. financial units Level of aggregation Customer partnering,2-72,73,Planning Horizon and Time Periods,Time Periods (week numbers),Forecast Length,Short Mid Long,Weeks Months Quarters,1 2 3 4 5 6 7 8 9 1011 12 13 17 21 26 30 34 39 43 47

56、 52 65 78 91 104,Planning Horizon,2-73,1-74,Data Preparation and Collection,Record sales data in same periods as forecast data (daily, weekly, or monthly) Monitor demand, not sales and/or shipments Record the circumstances of exceptional demand Record demand separately for unique customer groupings

57、and market sectors,2-74,75,Dealing with Outliers,2-75,50,55,76,Decomposition of Data,Purify the data Adjust the data Take out the baseline Identify demand components Trend Seasonality Nonannual cycle Random error Measure the random error Project the series Recompose,2-76,77,Session 2 Review,You shou

58、ld now be able to: Explain why forecasting is important Identify and describe general methods of forecasting Identify demand characteristics Describe considerations in using data for forecasts Outline the process of data decomposition,2-77,Master Planning of Resources,Session 3 Demand Management and

59、 Customer Service,79,Master Planning of Resources,Session 1:The Business Planning Process Session 2:Forecasting Demand Session 3:Demand Management and Customer Service Session 4:Distribution Planning Session 5:The Sales and Operations Planning Process Session 6:The Master Scheduling Process Session 7:Managing the Master Scheduling Process Session 8:Measuring Performance and Validatingthe Plan,80,Session 3 Objectives,Describe how forecast accuracy is measur