Planning and Control
Planning and control processes are the closed-loop processes that determine the need for material and capacity to address expected demand, execute the resulting plans, and update planning and financial information to reflect the results of execution. Planning and control processes exist at several levels: The most common are business planning, sales and operations planning, master scheduling, material requirements planning, production activity control, and project planning. Each level addresses
different decision-making needs, covers a planning horizon, and is stated in units appropriate for the level. The highest level addresses long-term needs, such as the decision to build facilities. The lowest level addresses short-term needs, such as deciding which of two waiting jobs should be run through an assembly process first.
Each level produces two types of plans. The first is for the delivery of that level's focus (the focus plan), and the second is for providing the capacity and capability needed to support that delivery (the support plan). The importance of the two types depend on the nature of the business. For example, a service business might be more concerned with a robust staffing plan (support), and a manufacturing business might be more concerned with a robust production schedule (focus). The most common levels of planning are summarized in the following table.
Process
|
Focus plan
|
Support plan
|
Time horizon
|
Focus plan units
|
Business planning (strategic planning)
|
Revenue plan
|
Spending plan
|
Very long
|
Financial (dollars)
|
Sales and operations planning
|
Production plan
|
Resource plan
|
Long
|
Product and service lines (dollars of revenue)
|
Master
scheduling
|
Master production schedule
|
Rough-cut capacity plan
|
Medium
|
End-level product numbers
|
Manufacturing resource planning (MRP II)
|
Material requirements plan/planned and scheduled orders
|
Capacity requirements plan
|
Medium
|
Part numbers
(end-level, internal processed, purchased)
|
Production activity control
(shop floor control)
|
Production schedule/
dispatch list/released orders
|
Staffing plan, input/output control
|
Short
|
In-process parts
(part numbers and operation numbers)
|
Portfolio/program/
project planning (single products
and services)
|
Project schedule/deliverables/
work breakdown structure
|
Resource plan (staffing and material)
|
Comprehensive (very long through short)
|
Varies (schedule, dollars,
percent complete,
project indexes)
|
5.1 Enterprise resources planning (ERP)
ERP is a framework for planning all of the resources of a business, from strategic planning through execution. Information technology tools and software can automate process links, sharing information across functional areas and processing business transactions efficiently. ERP systems also support the organization of data for decision making and analysis, and are typically organized around modules that support functional areas such as finance, marketing, human resources, operations, purchasing, and logistics. Real-time sharing of data is enabled by using a common database across these modules. (See section 8.1.1.)