plan to plan

Planning your activities is one of the most important and relevant topics in the context of improving business efficiency. For the enterprise as a whole, competent and accurate planning ensures the achievement of the desired position in the market, indicators of sales volume, profitability and costs, and for the structural divisions of a particular company, it allows them to coordinate their actions to achieve the desired business results.

Only  few people can clearly explain - what are the boundaries of planning processes  (what should be included in them and what should not) , how they can be automated, what effects can be obtained from this . We will talk about this in the article.

The topic is ripe because FMCG sector companies have an interest and appetite for automated tools. Many have learned to implement and have begun to use accounting systems for the financial and operational contours of the work. But planning is a more creative and variable process than accounting processes in production and warehouses of finished products.

In this article I will try to outline our approach to determining what are the levels of planning; what they include; what should be automated and what should not. Separately, I will outline the errors that occur when trying to implement an automated planning system.

The article does not claim to be an absolute truth, but it conveys the opinions formed during the analysis of cases of working with our clients. I warn you - there will be a lot of letters, because the topic is not easy. You need space to describe everything. Plus, in some places it turned out a little academic, so please be patient.

LEVELS OF PLANNING AND THE POSSIBILITY / NEED TO AUTOMATE THEM

Thanks to the practice of our work with planning processes, we have identified 4 levels of planning. I must say right away that in this article we are not talking about the need to automate planning at each of the levels. Automation is one of the means to achieve the goals of planning (in addition, requiring financial investment). If a company goes into automation, it is necessary to clearly understand the business effects that you want to achieve from investing effort and money in such a project.

So, here are  the levels (types) of planning in production organizations that we distinguish:

1. Business planning. Planning horizon: a year or more.

2. Calendar planning: from a month

3. Operational planning: days

4. Planning by work centers: hours , minutes a day

As you can see, the planning results at each level are transferred to the level below, starting from the very top. Thus, a system of company plans consistent in terms of goals is formed, where plans at each of the lower levels do not contradict the upper one.

I will pay attention to the following. The model we describe is planning from business goals set by the owners and / or top companies. In practice, there are models that are built not from business plans, but from the plans of specific performers. That is, these plans are based on how much the sales department can sell and how much the production department can produce. We are not considering this model within the framework of the article, since it is not based on the business goals of the company. In our work, we primarily focus on the business effects of the customer, the goals and meanings of activities for the business, the approach “from opportunities”, as a rule, is not considered as a target one.

Since each level of planning has characteristics by which they can be compared with each other, information on them is given below in the form of a comparative table.

We will consider planning levels in the context of the following characteristics:  planning goal  (why do it),  key planning result  (what the business receives at this level from planning),  input data and result  (output data)  of a specific level ,  responsible for the process ,  the possibility / need for automation .
Here's what happened:

As a short conclusion, I can say that it is necessary to pay attention to all levels of planning.

But you should start automating with the one that in your company is a limitation / bottleneck / problem / cornerstone / ... (underline as necessary). Effective building of planning processes can be done with automation , but automation is not necessarily needed at all levels listed above. “Automating everything” is a common mistake in project planning. It makes sense to start automation from processes where strengthening will achieve the maximum business effect, taking into account the effort spent and the cost of work. An assessment of potential effects should determine the stages of work at different levels.

It's time to move on and talk about the other most common mistakes encountered in scheduling automation projects.

ERRORS IN AUTOMATION PLANNING

1. Prematurity and unreasonableness of the automation project

The practice of effective projects shows that there are certain prerequisites for whether the automation of planning processes was logically and economically justified.

Let's look at the example of the operational level of planning. It is worth starting automation if the company implements at least one of the following points:

Large         volume of SKUs , which becomes difficult to plan manually

It         is necessary to analyze a large number of parameters included in the planning model (which are also difficult to take into account by hand)

Processes         are non-transparent , not standardized, do not provide sound information for decision-making for several departments (production, purchases, sales)

High         risk of errors due to the influence of the human factor  (for example, a clear dependence on a particular performer)

In this case, the operational planning system is considered as a “hygienic” level of automation, since it already solves a large number of problems.

In this case, there may be no objective prerequisites for automating other levels.

However, in the next steps, you can move on to automating operational planning, to increase manageability "in the field" or, conversely, more top-level processes, such as scheduling (if purchases become a limitation). It depends on the potential effects and on whether or not the business understands how the automated tool will be used for the return on investment in the system.

2. Automation from the product

Even if the context for starting work on automation is “the same”, the project can still fail due to another serious “rake” - buying a software product and counting on the fact that the system will have magic logic, exactly how you plan.

Orientation to the typical functionality of the product is not suitable for everyone . It is typical for that, which provides a universal solution aimed at the widest possible coverage. For small companies, it may be suitable. But medium and large companies, most likely, will be cramped in the truncated functionality (their real processes are deeper and more flexible). The implementation of a standard solution in this case will require high costs to adapt to the specifics of a particular production.

3. "Responsible" for implementation

The success of the project largely depends on the person responsible for implementing the system . This should be a specific person with a dedicated function, authority and understanding of the target result.

It happens regularly that a working group meets, where decisions are made collectively (after all, the planning process is a cross-functional topic). But, unfortunately, collective responsibility often turns into collective irresponsibility (it seems that everyone is responsible for the result, but in fact no one wants to “stick out”). As a result, the project lasts much longer than planned, or the output is some kind of compromise solution that clearly does not correspond to the target result.

However, even if responsibility is not blurred between employees and there is a dedicated administrator (project manager), there is a risk that this person will not have sufficient expertise in the matter of planning. It is important that the person in charge of the project has a good understanding of the planning area itself. Otherwise, it may again turn out that the project will be delayed for an indefinite period or the result of the system cannot be used. Thus, we recommend paying attention to the availability of expertise in the field of planning.

4. Automation of “what is”, without building a target model

Pulling an automated system on non-optimally built processes will not lead to significant business effects. Therefore,  at the stage of requirements preparation, it is important for experts to participate in order to form the “as it should be” state , to carry out organizational changes necessary to optimize processes and their subsequent automation already in the target model.

I hope that this article will help those who are at a crossroads and cannot understand whether it is worth introducing automated planning systems and how to do it? If, nevertheless, this did not happen and you need additional advice, please contact us, we will be happy to help.