tools and techniques of planning

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  • 1. Tools and Techniques of Planning

2. Learning Objectives: Become familiar with 6 different sets of tools to aid in effective planning Techniques for assessing the environment Tools for allocating resources Tools for production planning Tools for project planning Techniques for scenario/contingency planning Creativity aids 3. Tools for Assessing the Environment Environmental scanning Forecasting Simulation techniques Delphi Technique Benchmarking 4. Tools for Allocating Resources Budgeting - a numerical plan for allocating resources to specific activities 5. Tools for Production Planning Scheduling Tools Gantt charts Load charts Linear programming 6. Project Planning Tools Flow Chart PERT Network Process Decision Program Chart Tree Diagram 7. Scenario Planning Scenarios are descriptions or stories of possible futures Enhances managerial thinking move from advocacy to exploration Anticipation of change brings faster reaction to uncontrollable events 8. Creativity Aids Osborn Model Fact-finding Idea-finding Solution-finding Anatomy of a Creative Moment Preparation Incubation Illumination Translation Four Tools for Creativity Belief in your own creativity Absence of judgment Precise observation Penetrating questions 9. Brainstorming Rules Never criticize ideas defer judgment Display all ideas so team members can see and build on them record each idea as expressed, without interpretation Seek quantity of ideas they breed quality Set a time limit 30 minutes or less 10. Planning Tools and Techniques Summary Techniques for assessing the environment Tool for allocating resources - budgeting Tools for production planning - scheduling Project planning tools Scenario/contingency planning Creativity aids 11. Assessing the environment Environmental scanning The screening of large amounts of information to anticipate and interpret change in the environment. Competitor Intelligence The process of gathering information about competitors who they are?; what are they doing? Is not spying but rather careful attention to readily accessible information from employees, customers, suppliers, the Internet, and competitors themselves. May involved reverse engineering of competing products to discover technical innovations. Global Scanning Screening a broad scope of information on global forces that might affect the organization. Has value to firms with significant global interests. Draws information from sources that provide global perspectives on worldwide issues and opportunities. 12. Assessing the environment Cont. Forecasting The part of organizational planning that involves creating predictions of outcomes based on information gathered by environmental scanning. Facilitates managerial decision making. Is most accurate in stable environments. Types Quantitative forecasting Applying a set of mathematical rules to a series of hard data to predict outcomes. Qualitative forecasting Using expert judgments and opinions to predict less than precise outcomes. Collaborative planning, forecasting, and replenishment (CPFR) software A standardized way for organizations to use the Internet to exchange data. 13. Forecasting Techniques Quantitative Time series analysis Regression models Econometric models Economic indicators Substitution effect Qualitative Jury of opinion Sales force composition Customer evaluation 14. Making forecasting more effective Use simple forecasting methods. Compare each forecast with its corresponding no change forecast. Dont rely on a single forecasting method. Dont assume that the turning points in a trend can be accurately identified. Shorten the time period covered by a forecast. Remember that forecasting is a developed managerial skill that supports decision making. 15. The benchmarking process The search for the best practices among competitors and non-competitors that lead to their superior performance. By analyzing and copying these practices, firms can improve their performance. Form a benchmarking team. Identify what is to be benchmarked, select comparison organizations, and determine data collection methods. Collect internal and external data on work methods. Analyze data to identify performance gaps and the cause of differences. Prepare and implement an action plan to meet or exceed the standards of others. 16. Steps in benchmarking Form a Benchmarking Planning TeamPrepare and Implement Action PlanBest PracticeAnalyze Data to Identify Performance GapsGather Internal and External Data 17. Allocating resources Types of resources The assets of the organization Financial: debt, equity, and retained earnings Physical: buildings, equipment, and raw materials Human: experiences, skills, knowledge, and competencies Intangible: brand names, patents, reputation, trademarks, copyrights, and databases Structural/cultural: history, culture, work systems, working relationships, trust, and policies Budgets Numerical plans for allocating resources to specific activities. Used to improve time, space, and use of material resources. Are the most commonly used and most widely applicable planning technique for organizations. 18. Types of budgets Cash Budget Forecasts on hand and how much will be neededProfit Budget Combines Revenue and expanse budgets of various units to determine each units contributionRevenue Budget projects future salesExpense Budget Lists primary activities and allocates dollar amount to each 19. Suggestions for improving budgeting Be flexible. Goals should drive budgetsbudgets should not determine goals. Coordinate budgeting throughout the organization. Use budgeting/planning software when appropriate. Remember that budgets are tools. Remember that profits result from smart management, not because you budgeted for them. 20. Allocating resources: scheduling, charting Schedules Plans that allocate resources by detailing what activities have to be done, the order in which they are to be completed, who is to do each, and when they are to be completed. Represent the coordination of various activities. Gantt Chart A bar graph with time on the horizontal axis and activities to be accomplished on the vertical axis. Shows the expected and actual progress of various tasks. Load Chart A modified Gantt chart that lists entire departments or specific resources on the vertical axis. Allows managers to plan and control capacity utilization. 21. Gantt Chart and Load Chart 22. Contemporary planning techniques Project A one-time-only set of activities that has a definite beginning and ending point time. Project management The task of getting a projects activities done on time, within budget, and according to specifications. Define project goals Identify all required activities, materials, and labor Determine the sequence of completion Scenario A consistent view of what the future is likely to be. Scenario planning An attempt not try to predict the future but to reduce uncertainty by playing out potential situations under different specified conditions. Contingency planning Developing scenarios that allow managers determine in advance what their actions should be should a considered event actually occur. 23. Project planning process Define objectivesIdentify activities and resourcesDetermine additional resource requirementsEstablish sequencesCompare with objectivesEstimate time for activitiesDetermine project completion date 24. Thank You