WHAT IS PLANNING ?? What is Planning?

A plan is a determined course of action for achieving a specific objective. An individual may prepare a plan for his journey or tour or for a family function. Similarly, a business unit may prepare a plan to achieve a particular objective. It is called a business plan which includes production plan, sales plan, and so on. A business unit prepares a master plan for the whole unit. Such master plan is again divided into departmental plans for actual execution. Planning is a process of thanking to action. It is a means to achieve well defined objectives. Business plan and business planning move together. Planning is the primary function of management and occupies the first position in the management process. It is the starting point of the whole management process as other management functions are related to planning function. Planning, in simple words, means to decide the objectives clearly and to prepare a plan. There after to take suitable steps for the execution of the plan. Planning function is performed by managers at all levels. It is deciding the objective to be achieved and taking suitable follow-up steps for achieving the same. Planning is, now, universally accepted as a key/passport to success, progress and prosperity in business as well as in all other aspects of life. It acts as a base of all purposeful human activities. The concept of planning is old enough. Planning was advocated by Confucius almost 2500 years ago. He said "A man who does not think and plan long ahead will find trouble right at his door". Thus, planning is the centre around which all business activities move. In planning, various business problems are studied, decisions are taken regarding the future course of action and business activities are adjusted accordingly. Thus, planning means deciding in advance the objectives to be achieved and preparing plans/programmes for achieving them. In other words, planning is the process of foreseeing desired objectives - anticipating problems and developing solutions. It serves as a core of the whole management process. Planning bridges the gap from where we are to where we want to go. In the absence of planning, events are left to chance. A plan is to-day's projection for tomorrow's activity.

Definitions of Planning Definitions of Planning

According to George R Terry, "Planning is the selecting and relating of facts and the making and using of According to George R Terry, "Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of purposed activities believed necessary to assumptions regarding the future in the visualization and formulation of purposed activities believed necessary to achieve desired results". achieve desired results". According to Philip Kotler, "Planning is deciding in the present what to do in the future. It is the process whereby According to Philip Kotler, "Planning is deciding in the present what to do in the future. It is the process whereby companies reconcile their resources with their objectives and opportunities". companies reconcile their resources with their objectives and opportunities". According to Koontz and O'Donnell, "Planning is deciding in advance what to do, how to do it, when to do it, and According to Koontz and O'Donnell, "Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it. Planning bridges the gap between where we are and where we want to go. It makes it possible for who is to do it. Planning bridges the gap between where we are and where we want to go. It makes it possible for things to occur which would not otherwise happen. things to occur which would not otherwise happen.

Features of planning
y y y y y y y Planning focuses on achieving objectives Planning is a primary function of management Planning is pervasive Planning is continuous Planning is futuristic Planning involves decision making Planning is a mental exercise

Need Of Planning Need Of Planning

The need of planning is universally accepted in the business as well as in other aspects of life. The following points justify the need of business planning/planning in business: 1. 2. 3. 4. 5. Planning is needed for survival and growth of a business unit in an orderly manner. Planning is needed in order to face new problems/difficulties developed due to growth of markets, market competition, changes in consumer expectations and so on. Planning is needed in order to face challenges created by changing environmental factors/forces. Planning is needed as it acts as a pre-requisite to good management. It is needed as it is the core of the whole management process. Planning is needed in order to achieve the objectives decided by the management. It is also needed as it ensures accuracy, economy and operational efficiency in busin6s management.

Types of of Types PlansPlans

Objectives: Objectives are very basic to the organisation and they are defined as ends which the management seeks to achieve by its operations.They serve as a guide for overall business planning.

Strategy: strategy is a comprehensive plan for accomplishing an organisation objectives. This comprehensive plan will include three dimensions, (a) determining long term objectives, (b) adopting a particular course of action, and (c) allocating resources necessary to achieve the objective. Policy: They are guides to managerial action and decisions in the implementation of strategy. Procedure: Procedures are routine steps on how to carry out activities. Procedures are specified steps to be followed in particular circumstances. Method: Methods provide the prescribed ways or manner in which a task has to be performed considering the objective. It deals with a task comprising one step of a procedure and specifies how this step is to be performed. Rule: Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. Programme: Programmes are detailed statements about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required and the budget to implement any course of action. Budget: It is a plan which quantifies future facts and figures. It is a fundamental planning instrument in many organisations.

Aims and Importance of Planning Aims and Importance of Planning

Planning is of paramount importance both for an organisation and an economy. Sound plans are essential to effective management, because they serve as guides to all management functions. Lack of well-defined objectives and priorities is the common cause of failure. 'Failure to plan is planning to fail'. Planning is useful to an organization in the following ways: (i) Focuses attention on objectives and results: Every organisation exists to achieve certain objectives. Planning concentrates attention on the dominant goals of the organisation. It forces the members of the organisation not to get lost in the maze of routine activities and lose sight' of the broad objectives for which the organisation was established. "Plans alone cannot make an enterprise successful. Action is required; the enterprise must operate. Plans can, however, focus attention on purposes. They can forecast which actions will tend toward the ultimate objective which tends away and which are merely irrelevant. Sound Planning avoids the danger of means becoming ends in themselves. Planning provides a rational approach to predefined objectives. It secures unity of purpose and action. (ii) Reduces uncertainty and change: Uncertainly and risks are inevitable and planning cannot eliminate them. But planning enables an organisation to cope with uncertainty and change. Although the exact future can seldom be predicted and factors beyond control may interfere with the best-laid plans, without planning events are left to chance. (With the help of planning, an enterprise can predict future opportunities and threats and make due provision for them) Instead of leaving future events to chance, they can be made to occur in a desired manner, planning seeks to minimize risk while taking advantage of opportunities. Planning helps to identify potential threats and opportunities. It also keeps management alert to the changing environment of business. In this way planning provides additional strength to the organisation for survival and growth in the face of turbulence. (iii) Provides sense of direction: Planning saves an organisation from drifting and avoids aimless activities. It directs human efforts into endeavors that contribute to the accomplishment of goals. "If you don't know where you are going ,any road will get you there. '^Planning makes work more meaningful and activities more orderly. It bridges the gap between where we are and where we want to go. Without planning action is likely to become random activity, producing nothing bad chaos. Planning replace random and haphazard operation by orderly and meaningful action. (iv) Encourages innovation and creativity: Innovation and creativity are prerequisites to continuous growth and Steady prosperity of business. Sound planning encourages innovative thought and creativity of a manager. According to D.E. Hussey, "a good planning process will provide avenues for individual participation, will throw up more ideas about the company and its environment, will encourage an atmosphere of frankness and appropriate selfcriticism and will stimulate managers to achieve more." Earning is forward looking and enables an enterprise to cope with technological and other developments. Being anticipatory in nature, planning improves the adaptability of an organisation to the changing environment. Planning keeps the organisation tuned to its environment.

(v) Helps in coordination: Planning is the best stage for the integration of diverse forces at work. Sound planning interrelates all the activities and resources of an organisation. It also helps to relate internal conditions and processes to external events and forces. The activities and efforts of various departments and divisions can be harmonized with the help loan overall plan, planning makes for balance and consistency in efforts Planning leads to a consistent and coordinated structure of operations. Effective planning can minimize the dangers of misunderstandings that result from lack of information and confusion. (vi) Guides decision making: Planned targets serve as the criteria for the evaluation of different alternatives so that the best course of action may be chosen. By predicting future, planning helps in taking future-oriented decisions and promotes rationality in executive thinking Sound plans prevent hasty judgment and haphazard action. "Without planning, business decisions would become random ad hoc choices, as though a pilot set out without knowing whether he wished to fly to London, Hong Kong or Johannesburg."7planning eliminates the need for trial and error in decision-making) (vii) Provides a basis for decentralization: Planning helps in the dispersal of decision-making power among the lower levels of management. Well-established plans serve as guides to subordinates and reduce the risk involved in delegation of authority. Planning also helps to improve the motivation and morale of employees by providing targets of performance. (viii) Provides economy in operation: Planning facilitates optimum utilization of available resources. It makes at possible for things to occur which would not otherwise happen. It improves the competitive strength of an organization by helping it to discover and exploit opportunities a rational solution to problems, planning results in the use of most efficient methods of work. "Planning minimizes costs because of the emphasis on efficient operation and consistency. It substitutes joint directed efforts for uncoordinated piece-meal activity, even flow of work for uneven flow and deliberate decision for snap judgment." Planned effort is always more efficient than unplanned action. Thus, planning improves organizational effectiveness. It promotes growth and prosperity. (ix) Facilitates control: Planning provides the basis for control. Plans serve as standards or benchmarks for the evaluation of actual performance. Sound planning enables management to control the events rather than be controlled by them. It permits control by exception. Control cannot be exercised without plans because the function of control is to ensure that the activities conform lo the plans. Any attempt to control without plans is meaningless as there are no gauges for performance.

Limitations of Planning Limitations of Planning

Internal Limitations
There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves. 1. Rigidity a. Planning has tendency to make administration inflexible. b. Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances. c. There is no scope for individual freedom. d. The development of employees is highly doubted because of which management might have faced lot of difficulties in future. e. Planning therefore introduces inelasticity and discourages individual initiative and experimentation. Misdirected Planning a. Planning may be used to serve individual interests rather than the interest of the enterprise. b. Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit ones own requirement rather than that of whole organization. c. Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning. Time consuming a. Planning is a time consuming process because it involves collection of information, its analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available. b. Therefore planning is not suitable during emergency or crisis when quick decisions are required. Probability in planning a. Planning is based on forecasts which are mere estimates about future. b. These estimates may prove to be inexact due to the uncertainty of future. c. Any change in the anticipated situation may render plans ineffective. d. Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is unpredictable. e. Thus, excessive reliance on plans may prove to be fatal. False sense of security a. Elaborate planning may create a false sense of security to the effect that everything is taken for granted. b. Managers assume that as long as they work as per plans, it is satisfactory. c. Therefore they fail to take up timely actions and an opportunity is lost. d. Employees are more concerned about fulfillment of plan performance rather than any kind of change. Expensive a. Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money b. According to Koontz and ODonell, Expenses on planning should never exceed the estimated benefits from planning.

2.

3.

4.

5.

6.

External Limitations of Planning 1. 2. 3. 4. Political Climate- Change of government from Congress to some other political party, etc. Labour Union- Strikes, lockouts, agitations. Technological changes- Modern techniques and equipments, computerization. Policies of competitors- Eg. Policies of Coca Cola and Pepsi.

5.

Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.

Steps in Planning Function

Steps in Planning Function
Planning function of management involves following steps:1. Establishment of objectives a. Planning requires a systematic approach. b. Planning starts with the setting of goals and objectives to be achieved. c. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts. d. Moreover objectives focus the attention of managers on the end results to be achieved. e. As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective. f. As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of personnel manager. g. Such goals should be specified in qualitative terms. h. Hence objectives should be practical, acceptable, workable and achievable.

2.

Establishment of Planning Premises a. Planning premises are the assumptions about the lively shape of events in future. b. They serve as a basis of planning. c. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations. d. It is to find out what obstacles are there in the way of business during the course of operations. e. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent. f. Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socioeconomic, political and economical changes. g. Internal premises are controllable whereas external are non- controllable.

3.

Choice of alternative course of action a. When forecast are available and premises are established, a number of alternative course of actions have to be considered. b. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization. c. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made. d. After objective and scientific evaluation, the best alternative is chosen. e. The planners should take help of various quantitative techniques to judge the stability of an alternative.

4.

Formulation of derivative plans a. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan. b. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans. c. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization. d. Derivative plans indicate time schedule and sequence of accomplishing various tasks.

5.

Securing Co-operation a. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence. b. The purposes behind taking them into confidence are :i. Subordinates may feel motivated since they are involved in decision making process. ii. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans. iii. Also the employees will be more interested in the execution of these plans.

6.

Follow up/Appraisal of plans a. After choosing a particular course of action, it is put into action. b. After the selected plan is implemented, it is important to appraise its effectiveness. c. This is done on the basis of feedback or information received from departments or persons concerned. d. This enables the management to correct deviations or modify the plan. e. This step establishes a link between planning and controlling function. f. The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic.

CASE STUDY ON Management Planning of Boeing Corporation

Management planning is an essential task for a company as massive and complicated as Boeing Corporation. The company operates on a global level and its provides products to customers around the world. They produce high end aircraft for both commercial and military organizations. The products manufactured are primarily needed to carry passengers, carry cargo, and perform military operations. Aircraft used for these purposes are strictly regulated due to safety and performance concerns. In the United States, Boeing aircraft are regulated by the Federal Aviation Administration, or FAA. With all these factors in mind, Boeing is required to conduct extensive planning in order to operate an efficient business. Management planning plays a large role in the success of the company and is used at all levels of the corporations structure. The planning function of management is the process of setting goal and objectives for an organization to achieve over a set period of time. A plan will include activities and tasks that need to be completed in order to reach the ultimate goal. Good plans will also take into account variables and unexpected occurrences. By planning for the unexpected an organization can avoid the chaos that is associated with unforeseen challenges or problems. The company remains efficient by setting goals within its engineering department, sales department, mechanical department, and product testing department, among many others. For each goal, there will be set guidelines that explain how this particular goal will be achieved. The guidelines will outline the events that need to take place by addressing issues such as management, personnel, inventory, etc. The ultimate goal of the plan is to bring efficiency to its highest level within the company. Management planning includes five basic steps. The first step is to analyze the situation that surrounds the goal. By conducting a thorough analysis, management is able determine which steps need to be taken in order to reach the goal. The next step is to look at alternative goals and plans that may be used. It is a good idea to formulate multiple plans that can be compared and contrasted with one another. This will allow management to see the benefits and errors that each alternative goal or plan offer. The alternative plans and goals will eventually be combined into one single plan. The third step is to evaluate the goals and plans that have been created thus far. A manager can look at the overall plan and determine the benefits and drawbacks of each goal that has been set. As a manager is evaluating the goals, he or she can prioritize the most important steps and delegate roles to members who can most efficiently complete the tasks. The fourth step is for management to select the final plan to be used. The previous three steps have laid the groundwork for this decision to be made. A manager will need to use good judgment and analysis to determine which final plan will be implemented into the system. A managers final step is to actually implement the plan that has been created. The plan will need to be explained to all people involved with the plans success. It is vital that everybody is on the same page when the plan is put into effect. In the case of Boeing, the plans laid out by each department will need to be linked with other departments within the company. This allows all the separate departments to function as one efficient unit. There many internal and external factors that can affect the management planning process. Legal issues play a large role with Boeing. Because the company produces a product that has the potential to kill people in an accident, the company must be careful to obey the laws and regulations with aircraft manufacture. For example, Boeing must create a operating manual for both mechanics and pilots for every aircraft that is built. Managers within the company must

CASE STUDY ON Management Planning of Boeing Corporation

incorporate this requirement into their planning by ensuring that engineers are able to create detailed plans for every repair issues that may arise with the aircraft (Prichard 2004). Boeing also has ethical issues that affect management planning. The largest ethical concern for Boeing is that they are following guidelines when bidding products to the United States military (Prichard 2004). There are laws established that prevent the company from unfairly enticing military personnel with monetary gifts. Management within the sales department will need to take this into account when making sales and bidding plans for the company. Corporate social responsibility is another concern that Boeing Corporation takes into account. Millions of passengers use Boeing aircraft each year. Managers at company are responsible for ensuring that the products they sell are safe for those who use them. In recent years management has been planning to make the products more fuel efficient in order to protect the environment (Gonzalez 2007). By looking out for the best interests of the customers, employees, and community; Boeing is conducting corporate social responsibility. Strategic planning is the broadest goals set by the company and is highly important to a company as large as Boeing. The company uses strategic planning to influence communities, airlines, and the military. Reliability and performance are the two greatest concerns for an aircraft manufacturer (Prichard 2004). Strategic planning allows the company to see the big picture and create strategies to create an image of reliability and performance in their products. Most recently environmentally friendly products have been requested by consumers. Boeing has needed to rework its strategic plans to meet this growing need from consumers (Gonzalez 2007) . Tactical planning is used within each separate department within Boeing. By making tactical plans, the company is able to manage each department to its maximum level of efficiency. For example, the manufacturing department will formulate tactical plans that can be used to create assembly stations within the plant. This will allow workers to assemble the aircraft in the quickest and most efficient manner. Operational planning is similar to tactical, but deals with managers at the very bottom of the chain. These managers will be ensuring that tasks are being completed properly by the non-manager employees. These managers are in charge of the quality control of the physical operations of the business. All these functions combine contribute to a solid management plan. Planning is an extremely important tool within Boeing Corporation and will be used to contribute to its success in the future. QUESTIONS..

1) How planning is vital within all of the major

departments of Boeing? And how Management planning plays a large role in the success of the company? 2) Describe major steps of management planning in Boeing Corporation that allows all the separate departments to function as one effective and efficient unit? 3) Highlight the major issues that can affect the management planning process of Boeing Corporation? 4) How strategic and tactical Planning is an extremely important tool within Boeing Corporation and will be used to contribute to its success in the future?

Answers..

1) Planning is vital within all of its major departments In Boeing. The company remains efficient by setting goals
within its engineering department, sales department, mechanical department, and product testing department, among many others. For each goal, there will be set guidelines that explain how this particular goal will be achieved. The guidelines will outline the events that need to take place by addressing issues such as management, personnel, inventory, etc. The ultimate goal of the plan is to bring efficiency to its highest level within the company. With all these factors in mind, Boeing is required to conduct extensive planning in order to operate an efficient business.

2)

Management planning includes five basic steps. The first step is to analyze the situation that surrounds the goal. By conducting a thorough analysis, management is able determine which steps need to be taken in order to reach the goal. The next step is to look at alternative goals and plans that may be used. It is a good idea to formulate multiple plans that can be compared and contrasted with one another. This will allow management to see the benefits and errors that each alternative goal or plan offer. The alternative plans and goals will eventually be combined into one single plan. The third step is to evaluate the goals and plans that have been created thus far. A manager can look at the overall plan and determine the benefits and drawbacks of each goal that has been set. As a manager is evaluating the goals, he or she can prioritize the most important steps and delegate roles to members who can most efficiently complete the tasks. The fourth step is for management to select the final plan to be used. A manager will need to use good judgment and analysis to determine which final plan will be implemented into the system. A managers final step is to actually implement the plan that has been created. The plan will need to be explained to all people involved with the plans success. It is vital that everybody is on the same page when the plan is put into effect. In the case of Boeing, the plans laid out by each department will need to be linked with other departments within the company. This allows all the separate departments to function as one efficient unit.

3) There are many internal and external factors that can affect the management planning process. Legal issues play a large role with Boeing. Because the company produces a product that has the potential to kill people in an accident, the company must be careful to obey the laws and regulations with aircraft manufacture.
Boeing also has ethical issues that affect management planning. Corporate social responsibility is another concern that Boeing Corporation takes into account, that can affect their management planning.

4) Strategic planning allows the company to see the big picture and create strategies to create an image of reliability
and performance in their products. Most recently environmentally friendly products have been requested by consumers. Boeing has needed to rework its strategic plans to meet this growing need from consumers. Tactical planning is used within each separate department within Boeing. By making tactical plans, the company is able to manage each department to its maximum level of efficiency. All these functions combine contribute to a solid management plan. Hence Planning is an extremely important tool within Boeing Corporation and will be used to contribute to its success in the future.

CASE STUDY ON Improving the planning process at CASE STUDY ON Improving the planning process at Tesco Tesco
Tesco, the UKs leading grocer and one of the top three international retailers in the world, is increasingly adding nonfood items to its extensive range. Last year, non-food sales grew by 13% and now account for approximately 20% of its 32.7 billion UK turnover. This presents Tesco with ever-expanding challenges to planning and forecasting demand for these non-repeating lines. With more than 1,900 UK stores, supported by 30 depots, Tesco keeps its supply chain running smoothly through a synchronized and collaborative planning system designed to anticipate customer demand so that shelves are always well stocked. What Tesco needed was not only a system capable of handling the new complexities of non-foods, such as colour, size, and style for fashions but one that could cope with lead-times not of a few days but of many months. It needed systems that can cope with the entire product lifecycle, from building an initial merchandise plan to accommodating markdown optimisation and inseason item planning. Challenges to demand planning and forecasting With non-food sales increasing five-fold in the past six years to reach 6.8 billion, books, clothing, electrical goods, telecoms, entertainment products and many other assorted lines now play a vital role in Tescos continuing growth both in the UK and also overseas. Such seasonal and changing merchandise demands a rather different approach to managing bananas or cans of baked beans and Tesco very quickly realised that its existing food focused merchandising systems could not adequately address these new requirements. Tesco also needed a system capable of regionalising assortment planning so that, for example, seaside stores receive enough swimwear at the right time or that supplies of haggis are only sent to Scottish outlets unless it happens to be Burns Night. We realised that we needed a different set of planning systems, explains Borlin. These needed to be flexible enough to grow with our business and conform to our standards for reliability and delivering to customer demand. We wanted strong predictive technology capabilities. It was also important for us to have a single vanilla version of the applications with no special configuration so that we have one tool for everyone and, even more important, we have a common process with a common platform across the entire business. As is the case with many merchandising departments, Tescos planners relied heavily on what has been termed as a cottage industry of spreadsheets. But as complexities developed so did the Microsoft Excel files, which became increasingly difficult to modify and also led to duplication and errors, meaning that Tesco found it difficult to measure key performance indicators for nonfood sectors. We wanted a consistent process across all departments that would enable us to utilise all information available in the planning process, says Borlin. Accurate demand forecasting and close collaboration with suppliers would help keep lead-times and inventory levels to a minimum. Focusing on the customer Now ranked as one of the top three international retailers with a presence in 13 countries and soon to enter the US market for the first time Tesco has built an impressive operation to meet consumer demand, focused around proper planning to breed efficiency and the rapid movement of merchandise. Although Tesco had traditionally developed many of its IT applications in house, the company was moving towards the use of more off-the shelf applications to cut maintenance costs and risk. For Tesco, a customer-centric philosophy is paramount for continuing success and this, too, is where Oracle Retail sees the focus of IT developments in the future. IT systems have moved away from point solutions to focus on optimisation and enterprise,says Sarah Taylor, Senior Director at Oracle Retail. Now, were moving more toward customer intimacy and emphasis on collaborating beyond the enterprise to the wider value chain to create true customer centric solutions. Until recently many of the tools needed by Tescos buyers and merchandisers were available only as point solutions focusing on such attributes as price optimisation or category planning. In Oracle Retail Planning these are brought together into an integrated model covering forecasting, planning, optimisation and fulfilment. By using a common integrated platform, information about all merchandise-related activities can flow through the organization and across departments to create a single view of the store, adds Taylor. Having selected the ideal package, a major challenge was to achieve the full support of the merchandising teams. People were familiar and comfortable with the spreadsheet approach. They found it easy to manage their own individual files, so it was not immediately apparent how a single, connected solution would be of much value. Fundamentally, our need to change the process to a common platform faced a bit of resistance.

Planning process transformed We believed that the new system would provide a wide range of benefits that could not be realised through our standard business practices, says Borlin, and that is what has happened. There have also been soft benefits. Tescos philosophy states that the best people must have access to the best tools. The new system truly enables the team to operate at their peak performance and overloaded spreadsheets no longer hinder success. By May 2005, work on extending Oracle Retail Planning across Tescos multi-national business was well underway. The company is committed to developing a single IT operation for all its operations wherever possible with its Tesco Operating Model. By early 2006, the planning platform was live in Korea, for demand forecasting while Poland and Hungary are both at the implementation stage. This new capability will match local needs with product assortments. Tesco started piloting Oracle Retail Planning for this type of continuity ranging in December 2006 with subsequent roll out in March 2007. For example, planning for seasonal merchandise is second nature to fashion buyers but this capability can also be valuable for managing the throughout of Easter eggs or Christmas cakes. By having the same processes and IT systems for all category buyers and merchandisers, these users can more easily switch product categories, which enables greater skill transfer through the business. Why Oracle? We already had a good working relationship with Oracle Retail, says Borlin. So although we fully explored other options, we wanted a package that was scalable enough ultimately to cover all products segments and ensure consistent processes throughout our business. Oracle Retail Planning was first implemented in February 2005 at Tesco to cover electrical lines and one clothing department. The system spanned many functions including the planning of weekly sales and stock information (WSSI) sales, stock open-to-buy, margin and price data as well as commercial finance planning attributes including like-forlike sales, new stores uplift and markdowns. Tesco also liked the flexible configuration options of the Oracle Retail Planning solution, which could be fine-tuned to address specific needs as the business changed and evolved, and appreciated the systems advanced forecast modelling capabilities. With its new planning system and processes in place, Tesco is ideally placed to meet increasing customer demands for an ever expanding range of products effectively and profitably.

QUESTIONS.
1) What made Tesco to realize that they need different set of planning systems? 2) How major challenges of achieving the full support of merchandising teams was achieved? 3) How Tesco improved their performance? 4) How Tesco was able to meet increasing customer demand for over expanding range of products effectively and profitably?

ANSWERS

1)

Tesco needed systems that can cope with the entire product lifecycle, from building an initial merchandise plan to accommodating markdown optimisation and in-season item planning. Tesco keeps its supply chain running smoothly through a synchronized and collaborative planning system designed to anticipate customer demand so that shelves are always well stocked. When Tesco was not able to capable of handling the new complexities of non-foods, such as colour, size, and style for fashions but one that could cope with lead-times not of a few days but of many months made them realized that they need different set of planning systems.

2)

Seasonal and changing merchandise demands a rather different approach to managing bananas or cans of baked beans and Tesco very quickly realised that its existing food focused merchandising systems could not adequately address these new requirements. Tesco also needed a system capable of regionalising assortment planning so that, for example, seaside stores receive enough swimwear at the right time or that supplies of haggis are only sent to Scottish outlets unless it happens to be Burns Night. These needed to be flexible enough to grow with our business and conform to our standards for reliability and delivering to customer demand. Accurate demand forecasting and close collaboration with suppliers would help keep lead-times and inventory levels to a minimum.

3) Tesco has built an impressive operation to meet consumer demand, focused around proper
planning to breed efficiency and the rapid movement of merchandise. Tesco had traditionally developed many of its IT applications in house, the company was moving towards the use of more off-the shelf applications to cut maintenance costs and risk. Tesco put much effort toward customer intimacy and emphasis on collaborating beyond the enterprise to the wider value chain to create true customer centric solutions.In Oracle Retail Planning these are brought together into an integrated model covering forecasting, planning, optimisation and fulfilment.

4) Tesco implemented first Oracle Retail Planning in February 2005 at Tesco to cover electrical
lines and one clothing department. The system spanned many functions including the planning of weekly sales and stock information (WSSI) sales, stock open-to-buy, margin and price data as well as commercial finance planning attributes including like-for-like sales, new stores uplift and markdowns. There was flexible configuration options of the Oracle Retail Planning solution, which could be fine-tuned to address specific needs as the business changed and evolved, and appreciated the systems advanced forecast modelling capabilities. With its new planning system and processes in place, Tesco is ideally placed to meet increasing customer demands for an ever expanding range of products effectively and profitably.

Acknowledgement
Acknowledgement is not only a ritual but also an expression of indebtedness to all those who have helped in the preparation process of the project. One of the most pleasant aspects in collecting information and compiling it is the opportunity to thank those who have actively contributed to it. The conclusions represented in this project spring from many sources

My sincere thanks to Mrs.Pooja Mehta under whose guidance, I had the opportunity to work. She has been a constant source of encouragement and guidance. This present work bears at every stage, the impressions of her wise & concrete suggestions, careful reasoning and meticulous attention.

I must express my sincere thanks to the authors whose works I have the privilege to consult and quote in my research project. Saloni Manchanda B.com 1st B 126

Project Report On Business Organisation & Management

TOPIC- PLANNING
SUBMITTED BYSALONI MANCHANDA B.COM 1st B

SUBMITTED TOMrs. Pooja Mehta