question 16

Lesson 8: Planning & Control (P&C) and P & C Systems (Chapters 10 & 14)

Dr. Suanu B. Wikina

Focus

• What is planning and control?

• Difference between planning and control

• Effect of supply and demand on planning and control

• Planning and control activities

• Planning and control systems

• Enterprise resource planning and planning and control systems

• Planning and control systems implementation

What is planning and control?

• Planning and control is reconciling demands of the market with the ability of the operation’s resources to deliver. • Provides the systems, procedures, and decisions that bring aspects of the

demand and supply together

• For instance, in a healthcare environment, planning and control activities may include activities of scheduling, coordination, and organization

Difference between planning and control

• Although distinction between the two terms are unclear, some general features could help to distinguish between them

• Planning is formalization of what is intended to happen at some point of time in the future, • i.e., it is a statement of intention, based on expectations that may or may

not happen due to a variety of reasons

• Control is a process of coping with changes to bring an operation back on track • i.e., making adjustments to allow the operation achieve set objectives

Effect of supply and demand on planning and control

• Both supply and demand uncertainty make planning and control more difficult. A combination of supply and demand is difficult.

• Dependent demand can be predicted with relative certainty because it is dependent on some other known factor

• Independent demand on the other hand is a situation when supply is made without knowing exactly what demand will be, i.e., the firm does not have a firm forward visibility of customer orders

• Planning and control depends on how the operation responds to demand, which in turn is related to the type of products/services

Planning and control activities

There are four overlapping activities:

1. Loading – amount of work allocated to a work center - how much to do? We can have finite and infinite loading

2. Sequencing – order in which work is to be done/priority assigned

3. Scheduling – when to do thing; details with start/end date/time

4. Monitoring & controlling – check to see if things are going according to plan. If not, rectify deviations with interventions which may involve re-planning

Planning and control systems

• These are the information-processing, decision support, and execution mechanisms that support planning and control activity

• Some common elements of planning and control systems are: • Customer (demand) interface

• Supply interface

• A set of overlapping core mechanisms

• Decision mechanism (operations staff and information systems)

• Hierarchical planning and control separates different kinds of decisions at different levels over different time periods; and is closely related to enterprise resource planning (ERP)

Enterprise resource planning (ERP) and planning and control systems

• ERP or materials requirements planning (MRP) enables companies to make decisions about volume (quantity) and timing calculations of materials needed

• Automates and integrates core business processes, such as customer demand, scheduling operations, ordering items, keeping inventory records, and updating financial data

• Enables proactive planning and thus companies are in a better position to understand the implications of any changes to the plan

Planning and control systems implementation

• Planning and control systems are designed to address enterprise- wide problems and so they are complex and difficult to get right

• Implementation therefore should involve cross-functional teams to deal with challenges of crossing boundaries, unifying divergent processes, and dealing with resistance to change.

• Resistance to change could arise from moving everyone to a single, integrated system that runs off a single database, and so this needs to be handled carefully and properly to garner buy in

• ERP implementations fail often. To enhance success, refer to the critical success factors (CSFs) on p. 485 of the course text