rganization chart a course for the achievement of its goals and objectives gunasekaran et al

2001 the process begins with reviewing the current operations of the organization and identifying
what needs to be improved operationally in the upcoming year from there planning involves
envisioning the results the organization wants to achieve and determining the steps necessary to
arrive at the intended destination success whether that is measured in financial terms or goals
that include being the highest-rated organization in customer satisfaction planning is very
critical when it comes to enhancement of supply chain and achievement of objectives at ppc ltd a
cement company the following are the importance of planning holten et al 2002 efficient use of
resources all organizations large and small have limited resources the planning process provides
the information top management needs to make effective decisions about how to allocate the
resources in a way that will enable the organization to reach its objectives productivity is
maximized and resources are not wasted on projects with little chance of success
establishing organizational goals setting goals that challenge everyone in the organization
to strive for better performance is one of the key aspects of the planning process goals must be
aggressive but realistic organizations cannot allow themselves to become too satisfied with how
they are currently doing or they are likely to lose ground to competitors the goal setting process
can be a wake-up call for managers that have become complacent the other benefit of goal
setting comes when forecast results are compared to actual results organizations analyze
significant variances from forecast and take action to remedy situations where revenues were
lower than plan or expenses higher managing risk and uncertainty managing risk is essential to
an organizations success even the largest corporations cannot control the economic and
competitive environment around them unforeseen events occur that must be dealt with quickly
before negative financial consequences from these events
become severe planning encourages the development of what-if scenarios where managers
attempt to envision possible risk factors and develop contingency plans to deal
with them kannan and tan 2005 the pace of change in business is rapid and organizations must be
able to rapidly adjust their strategies to these changing conditions team building and cooperation
planning promotes team building and a spirit of cooperation when the plan is completed and
communicated to members of the organization everyone knows what their responsibilities are
and how other areas of the organization need their assistance and expertise in order to complete
assigned tasks they see how their work contributes to the success of the organization as a
whole and can take pride in their contributions potential conflict can be reduced when top
management solicits department or division managers input during the goal setting process
individuals are less likely to resent budgetary targets when they had a say in their creation
creating competitive advantages planning helps organizations get a realistic view of their current
strengths and weaknesses relative to major competitors the management team sees areas where
competitors may be vulnerable and then crafts marketing strategies to take advantage of these
weaknesses observing competitors actions can also help organizations identify opportunities they
may have overlooked such as emerging international markets or opportunities to market products
to completely different customer groups c difference between the different supply
chain activities and how each are costed the different supply chain activities and explain how
each are costed supply chain management encompasses such a wide range of functional
activities that it can seem daunting even to the most experienced international businessperson la
londe etal 1994 however the process can be effectively modelled by breaking it down into
several main strategic areas which are as follows sometimes goods can be produced by
a combination of methods companies must also decide whether they will outsource
manufacturing plan planning involves a wide range of activities companies must first decide on
their operations strategy whether to manufacture a product or component or buy it from a
supplier is a major decision planning activates are costed as investment costs in this business
environment it is essential to make smart strategic decisions over a time horizon of up to ten
years about where and when to invest in new facilities such as warehouses and factories and
resources such as equipment and employees lambert and cooper
2002 source this aspect of supply chain management involves organizing the procurement of raw
materials and components when sources have been selected and vetted companies must negotiate
contracts and schedule deliveries supplier performance must be assessed and payments to the
suppliers made when appropriate in some cases companies will be working with a network of
suppliers this will involve working with this network managing inventory and company assets
and ensuring that export and import requirements are met the sourcing activities are costed in
procurement costs choosing the right suppliers who are consistently able to deliver the right
products and materials at the right times and at the lowest prices is vital by optimizing
procurement process ppc ltd company can ensure that it make the best possible decisions when it
comes to supplier selection dramatically reduce procurement costs and improve
delivery performance make this stage is concerned with scheduling of production activities
testing of products packing and release companies must also manage rules for performance data
that must be stored facilities and regulatory compliance the making activities are costed in
production costs another primary source of supply chain costs which applies
to manufacturing companies in particular is production costs deliver the delivery stage
encompasses all the steps from processing customer inquiries to selecting distribution strategies
and transportation options companies must also manage warehousing and inventory or pay for a
service provider to manage these tasks for them the delivery stage includes any trial period or
warranty period customers or retail sites must be invoiced and payments received and companies
must manage import and export requirements for the finished product the delivering activities are
costed in transportation costs the other key driver of supply chain costs is transportation costs
typically the root cause of higher transportation costs for finished goods as well as raw materials
and components is inefficient supply chain network planning and routing mentzer et al
2001 return return is associated with managing all returns of defective products including
identifying the product condition authorizing returns scheduling product shipments replacing
defective products and providing refunds the returning activities are costed inventory
costs the other major driver of supply chain costs is inventory costs companies across the supply
chain spectrum from retailers to manufacturers to suppliers rely on inventory as a buffer against
supply and demand uncertainty and volatility