Planning and Forecasting

(Part A)

Eng. Ahmed Bakhsh

Management Functions

Planning

Decision Making

Organizing

Leading

Controlling
 Chapter Objectives
• Explain the importance of planning

• Identify missions

• Explain the roles of goals and objectives

• Identify strategies

• Define the different types of forecasting

• Describe the Delphi Method

• Define different approaches to forecasts

• Discuss some strategies for managing technology

Planning and Forecasting

Planning
It is probably the most important of the
identified managerial functions. It focuses
you on how best to achieve the desired
results. Thus, without it organizing,
leading, and controlling have little
purpose.
 Planning
• Planning is the work done to predetermine a
course of action, in order to provide focus
and direction for enhancing the efficiency
and effectiveness of the company
1Q02 2Q02 3Q02 4Q02

Product A

Concept B

Project C

Study D

Test E

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 Planning
• Provides method for identifying objectives

• Design sequence of programs and activities

to achieve objectives
 Planning
Planning is made necessary by rapid change of

• (a) Technology ( web-based tools, broadband

communications options, mobile access),

• (b) Environment (globalization, competition,

marketplace), and

• (c) Organization (mergers & acquisitions, networks,

outsourcing and alliances)
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 Effective Planning
• Plan to plan

• People implementing plan should be

involved in preparing plan
 Planning
• What must be done?
• Who will do it?
• How will it be done?
• When must it be done?
• How much will it cost?
• What do we need to do it?
Who should do the planning
 Planning Roles
• Assist Superiors
• Ask for support from Subordinates
• Develop Active Plans
– Time management
– Project and Programs
– Corporate know-how
Planning

Strategic Planning

Operational Planning

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Operational Planning
• Define tasks/events to be
accomplished with the least
amount of resources within
the shortest time, to assure
that the company applies its
resources efficiently to
achieve its short-term and
long-term goals

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 Operational Planning Questions
• What is the most efficient way of
accomplishing a project/task with known
objectives (doing things right) ?
• How to link up with three best suppliers in
the marketplace for parts needed?
• What are the operational guidelines for
performing specific work?

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Activities Related to Planning

Forecasting

ActionPlanning

IssuingPolicies

EstablishingProcedures

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 Strategic Planning Questions
• What are the company’s vision, mission and value
system?
• What specific goals (profitability, market share, sales,
technology leadership position, global penetration) to
accomplish by when, with what investment and which
technology?
• Which new/improved product streams to offer by
when (considering product life cycle)?

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 Mission and Vision
• Mission • Vision - Company
Aspiration
• Why do we exist?
• Market capital
• Whom are we • Business standing
serving? • Ranking in industrial
• What do we do to sector
• Market Share
serve them?
• Others.

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 Vision Example
Eastman Chemical Company

“To Be the World's Preferred Chemical

Company”
 Vision – Microsoft (1980’s)

"A personal computer on every desk, and

every computer running Microsoft
software."
 Mission – Pal’s
To deliver excellence in food service while
providing a menu focused on exceptional
quality.
 Mission Example
The mission of Southwest Airlines is
dedication to the highest quality of
Customer Service delivered with a sense of
warmth, friendliness, individual pride, and
Company Spirit.
http://www.southwest.com 9/9/05
Tools for Strategic Planning
• Market research
• SWOT analysis
• Sensitivity analysis (what-
if, scenarios, Monte Carlo)
• External benchmarking
• Technology forecasting
• Product life cycle analysis

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Strategic Planning
Planning and Forecasting

Strategic Planning:

Needs strategic
plans Future
State

Current
State
Planning and Forecasting

Strategic Planning:

Management by Objectives
Develop work assignments based on organizational needs and
objectives.

Plans are agreed between manager and subordinate.

Objectives should be stretch objectives

Objectives should be quantifiable (increase income by 5%) or at least

tangible (written policy).

Needed resources should be determined and agreed to.

Plans should include employee development as well.

Plans are for a 6 month to 1 year time span.

Planning and Forecasting

Some Planning Concepts

Responsibility for Planning:

It is the continuing responsibility of each manager.

The higher managers rise the more time they spend

on planning.

Ultimate responsibility lies with top and middle

management.

Plans must lead to action.

Planning and Forecasting

Some Planning Concepts

Planning Premises:
These are the assumptions under which the
developed plans are expected to be executed.

Assumptions are based on forecasts and trends

in market and technology.

When there is uncertainty, there is a need to

develop contingency plans.