PLANNING

Fundamentals

Starting from drinking tea to bathing soap you find the brand HLL.
* 1972 HLL acquired Lipton
* 1984 HLL acquired Brooke Bond
* 1986 HLL acquired ponds
* 1993 HLL acquired Tata Oil Mills
* 1998 HLL acquired Lakme Brand.
50:50 joint agreement with Lakme
* 1994 HLL controlled KMBRLEY CLERK corporation 50%
shares introduced Hugees Dypers
* Nepal Levers was started
* 2002 HLL acquired modern foods.

Overview of Goals and Plans

Goal
A desired future state that the organization
attempts to realize.
Plans
A blueprint specifying the resource
allocations, schedules, and other actions
necessary for attaining goals.

 Planning
The act of determining the organizations
goals and the means for achieving them.

Purposes of Planning
It provides direction.
It reduces uncertainty.
It reduces overlapping and wasteful activities.
Establishes goals and standards used in
controlling.

Mission
Statement

Strategic Goals / Plans

Senior Management
(Organization as a whole)
Tactical Goals / Plans
Middle Management
(Major division, functions)
Operational Goals / Plans
Lower Management
(Departments, individuals)

Goals in Organization
Mission
The organizations reason for existence.
Mission statement
A broadly stated definition of the
organizations basic business scope and
operations that distinguishes it from similar
types of organization.

Some of the Mission

statements
VOLTAS Profit, growth and excellence.
ONGC To stimulate continue and
accelerate efforts to develop and
maximize the contribution of the energy
sector to the economy of the country.

Goals and Plans

Strategic goals
Broad
statements
of
where
the
organization wants to be in the future; pertain
to the organization as a whole rather than to
specific divisions or departments.
Strategic plans
The action steps by which an organization
intends to attain its strategic goals.

 Tactical goals
Goals that define the outcomes that
major divisions and departments must
achieve in order for the organization to
reach its overall goals.
Tactical plans
Plans designed to help execute major
strategic plans and to accomplish a specific
part of the companys strategy.

 Operational goals
Specific, measurable results expected
from departments, work groups, and
individuals within the organization.
Operational plans
Plans developed at the organizations
lower levels that specify action steps
toward achieving operational goals and
that support tactical planning activities.

Mission
Manufacture both standard and custom metal products for
various applications in the machine tool industry
President
12% return on investment
5% growth
No employee layoffs
Excellent service to customers

Tactical Goals
Finance V.P.

Production V.P.

Marketing V.P.

Keep outstanding accounts below

Manufacture 1,200,000 products at

Sell 1,200,000 units at average price

$500,000
Keep borrowing below $1,250,000
Provide monthly budget statements
for statements
Have delinquent accounts of no more
than 2% of total

average cost of $19

Scrap rate of 3% or less increase
manufacturing productivity by 2%
Resolve employee grievances within
3 working days

of $27
Introduce 1 new product line
Increase sales by 5% in new
market areas
open 1 new sales office
Attain market share of 19%

Operational Goals
Accounts Receivable Manager:
Issue Invoices within 5 days of sale
Check new customers credit within 1
Working day
Allow no account to be overdue more
than 5 months
Call delinquent accounts weekly

Supervisor Automatic Machines :

Produce 150,000 standard units at
average cost of $16
Have machine downtime of less than
7%
Achieve scrap rate of 3% or less
Respond to employee

Sales Manager Region 1:

Respond to customer inquiries with
2 hours
Meet sales quota of 120,600 units
Work with salespeople to:
Visit 1 new customer each day
Call on each large customer every 4
weeks call on each small customer
every 8 weeks

Planning Types and Models

Among the various types and models
most important are :

MBO
Single use plans.
Standing plans.
Contingency (scenario) plans.

Management by Objective
A method
of Management whereby
Managers and employees define goals for
every department, project, and persons and
use
them
to
monitor
subsequent
performance.

Steps in MBO
1. Set goals
2. Develop action plans
3. Review Progress
4. Appraise Overall Performance

Single use and standing plans

Single Use Plans
Plans that are developed to achieve a set
of goals that are unlikely to be repeated in
the future.
Standing Plans
Ongoing plans used to provide guidance for
task performed repeated within the
organisation

Major Types of Single use and Standing plans

Single Use Plans

Standing Plans

Programme

Policy

Plans for attaining a

one time
organisation goals

Broad in scope a
General guide to
action

Major undertaking
that may take
several years to
complete

Based on
organisation over
all goals / strategic
plan

Large in scope may

be associated with
several projects

Define boundaries
within which to
make decisions

Major Types of Single use and Standing plans

Single Use Plans

Standing Plans

Project

Rule

Also a set of plans

for attaining one
time goal

Narrow its scope

Smaller in scope
and complexity
than a programme
shorter time
horizon
Often one part of a
large program.

Describe How a specific

action is to be performed
May apply to specific setting
Procedure
Sometimes called a standard
operating procedure
Defines a precise series of
steps to attain certain goals.

Contingency Plan
Plans that define company responses
to specific situations, such as
emergencies, set backs or unexpected
conditions.

The Shewhart Cycle of

Continuous Improvement
4. Act
Analyze results; put
learning into action

3. Check
Observe the results

1.

Plan
Decide what
changes
are
desirable,
and
plan a change or
test

2. DO
Carry out the
change or test

Planning Time Horizon

Today

Short-Term Planning
(Operational Goals)

1 Year

2 Years

Intermediate-Term Planning
(Tactical Goals)

3 Years

4 Years

5 Years and Beyond

Long-Term Planning
(Strategic Goals)