BANGLADESH INSTITUTE OF MANAGEMENT

Post Graduate Diploma in Supply Chain Management

Supply Chain Plan, Strategy and Tactics:

Demand analysis to Sourcing and Procurement
MANAGEMENT PLANNING
Facilitator :
Mohammad Nazmi Newaz, PhD
Head – Management Department
Senior Management Counsellor, BIM
 Specific Objectives

◉ Role of planning in supply chain management.

◉ Discuss importance of planning.
◉ Explain the steps in planning.
◉ Explain the factors affecting on planning.
◉ Types of plan and planning.

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Learning by doing
Let’s enjoy the activities and discussions

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Value Chain

Creating and Sustaining Superior Performance

Value Chain
Value Chain Analysis
A Model of SCM
An Ideal Model of SCM
Value Chain versus Supply Chain
 Concepts – Fundamentals of Planning

Concept 1 Concept 2 Concept 3

one of the major functions bridges the gap from closely correlated
of the management with controlling
process
where we are to
where we want to go

Concept 4 Concept 5 Concept 6

deciding in advance what ◉ makes it involves number of
to do, how to do it, when to possible for steps, or stages.
do it, and who is to do it
things to occur
which would not
otherwise
happen
 Concepts – Importance of Planning

To Offset Uncertainty To gain economical ◉ To facilitate

and Change operation control
future uncertainty and ◉ planning ◉ managers
change make planning a cannot check
necessity
minimizes costs
because of the on their
even when the future is
highly certain, some planning emphasis on subordinates’
is usually necessary efficient accomplishm
operation and ents without
To focus attention on consistency having goals
objectives and programs
◉ although every
combines all the activities of
manager sees against which
production or manufacturing, to measure.
e.g., planning, organizing, the imperative
directing and controlling economy of ◉ there is no
planning at the way to control
Steps in Planning
5 6
COMPARING CHOOSING AN
7 FORMULATING
8 NUMBERIZING PLANS
ALTERNATIVES ALTERNATIVE SUPPORTING BY MAKING BUDGETS
IN LIGHT OF PLANS
GOALS SOUGHT • Develop such
Selecting the Such as Plans To: Budgets as:
Which alternative course of action • Buy Equipment • Volume and Price of
will give us the that we shall • Buy Materials Sales
best chance of pursue. • Hire and Train • Operating Expenses
meeting our goals Workers • Necessary for Plans
at the lowest cost • Develop A New • Expenditures for
and with the Product Capital Equipment
highest profit ?

1 BEING AWARE 2 SETTING 3 CONSIDERING 4 IDENTIFYING

OF OBJECTIVES PLANNING ALTERNATIVES
OPPORTUNITY OR GOALS PREMISES
In Light of: What are the most
The Market  Where we want In what promising
Competition to be ? environment alternatives to
What Customers  What we want  Internal or accomplish our
Want to accomplish ? External  objectives ?
Our Strengths  When we want will our plans
Our Weaknesses to accomplish ? operate ?
 Steps in Planning – 1 & 2

BEING AWARE OF OPPORTUNITY ESTABLISHING OBJECTIVES

We should take a preliminary look at In this step, the task is to establish
possible future opportunities and see objectives for the entire enterprise and then
them clearly and completely, know for each subordinate work unit, for the
where we stand in the light of our long-term as well as for the short range.
strengths and weaknesses, understand Objectives specify the expected results and
what problems we wish to solve and indicate the end points of what is to be
why, and know what we expect to gain. done, where the primary emphasis is to be
Our setting of realistic objectives placed, and what is to be accomplished by
depends on this awareness. Planning the network of strategies, policies,
requires realistic diagnosis of the procedures, rules, budgets, and programs.
opportunity situation.
 Steps in Planning – 3 & 4

DEVELOPING PREMISES DETERMINING ALTERNATIVE COURSES

A third logical steps in planning is to The fourth step in planning is to search for
establish, circulate, and obtain and examine alternative courses of action,
agreement to utilize critical planning especially those not immediately apparent.
premises such as forecasts, There is seldom a plan for which
applicable basic policies, and existing reasonable alternatives do not exist, and
company plans. quite often an alternative that is not obvious
They are assumptions about the proves to be the best.
environment in which the plan is to be The more common problem is not finding
carried out. It is important for all alternatives but reducing the number of
managers involved in planning to alternatives so that the most promising may
agree on the premises. be analyzed.
 Steps in Planning – 5 & 6
EVALUATING ALTERNATIVE COURSES SELECTING A COURSE
Having sought out alternative courses This is the point at which the plan is
and examined their strong and weak adopted  the real point of
points, we must next evaluate them by decision-making.
weighing them in the light of premises Occasionally an analysis and
and goals. evaluation of alternative courses will
One course may appear to be the most disclose that two or more advisable,
profitable but require a large cash outlay and the manager may decide to
with a slow payback; another may look follow several courses rather than
less profitable but involve less risk; still the one best course.
another may better suit the company’s
long-range objectives.
At this step in the planning process that
operations research and mathematical as
well as computing techniques have their
primary applications to the field of
management.
 Steps in Planning – 7 & 8

FORMULATING DERIVED PLANS NUMBERIZING PLANS BY BUDGETING

At the point when a decision is After decisions are made and plans are
made, planning is seldom complete, set, the final step to give them meaning, as
and a seventh step is indicated. was indicated in the discussion of types of
Derivative plans are almost plans, is to numberize them by converting
invariably required to support the them to budgets.
basic plan. The overall budgets of an enterprise
represent the sum total of income and
expenses, with resultant profit or surplus,
and budgets of major balance sheet items
such as cash and capital expenditures.
 ACTIVITY – Developing Organizational Plans

Instructions
Idea
◉ Participants will work in 4 groups
 in groups, discuss about the
◉ Each group will develop plans for 4 different scopes of planning
 think from an organization’s aspect
organizations
 set proper goal(s)
◉ Present your exercise in groups
 identify alternatives
through Flip charts
 evaluate alternatives
 select the best alternative(s)

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Factors affecting Planning

 Planning is affected by numerous factors. These factors

can be classified into 2 groups;

 External factors

 Internal factors

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External Factors affecting Planning

Competitors

Political

Legal PLANNING

Technology

Economic

External factors affecting planning

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Internal Factors affecting Planning

Strategy Shared value

Skills

Structure PLANNING

Style

Systems Staff

Internal factors affecting planning Page 21

 ACTIVITY – Exploring Different Types of Plans

Instructions
Idea
◉ Participants will work individually
 think about different dimensions of
◉ Each will list different types of plans plans
 consider megatrials issues
as much as they can
 figure out time horizons
◉ Each will write in VIPP cards and stick
 think thorough managerial levels
on the board

◉ Facilitator will discuss every type of

plan identified
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 Types of Plans and Planning

General Hierarchy Time Horizon

plans are plans are sometimes,
usually often planning are
categorized on divided in
the basis of classified
organizational according to relation to
activities the time horizon
organization
al hierarchy
Usage Contingency
plans are often in case of
classified emergency,
according to organizations keep
usages alternative plans
Types of Plans - General

Strategies
Mission

Policies

Goals TYPES OF PLANS

SOPs

Objectives
Budget Rules and regulations

Different types of plans

Types of Planning - Hierarchy

Strategic

Operational
Tactical Hierarchy of Plan

Hierarchy of plans
 Types of Plans - Usage

Single u
se d
Standin
g plans

Programs
Policies
Projects s
a t ion
SOPs ul
r eg
a nd
ules
Single used plans R

Standing plans
Types of Plans – Time Horizon

Long – term

Time horizon of Short – term

Mid – term Plans

Time horizon of plans

Types of Plans - Contingency

Another important element of an effective planning system is contingency plans.

Contingency planning is the development of alternative courses of action to be
taken if an intended plan is unexpectedly disrupted or rendered inappropriate.
For example, suppose a rapidly expanding franchise food company has made
plans to build 100 new units during each of the next four years.
Its top managers realize, however, that a shift in the economy might call for a
different rate of expansion.
Therefore, the firm develops two contingency plans;
(1) if the economy begins to expand beyond some specific level (contingency
event), then (contingency plan) the rate of the company’s growth will
increase from 100 to 150 new store per year;
(2) if inflation increases substantially, the expansion rate will drop from 100 to
75 new stores per year. The organization has now specified two crucial
contingencies (expansion or inflation in the economy outside the expected
range) and two alternative plans (increased or decreased growth).
 Planning

 Why planning?

 Planning steps.

 External and internal factors affecting planning.

 Different types of plans.

 Hierarchy of planning.
Key Issues
 Time horizon of plans.

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 END OF PRESENTATION

 Discussions

 Questions
Thank You

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