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

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 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 Product A Concept B Project C Study D Test E 2Q02 3Q02 4Q02


• Provides method for identifying objectives • Design sequence of programs and activities to achieve objectives

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)

Effective Planning
• Plan to plan • People implementing plan should be involved in preparing plan

• • • • • • 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


Stra ic Pla teg nning

Opera tional Planning


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


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?

Activities Related to Planning
F re a t g o c s in

A t nP n in c io la n g

Is u gP lic s s in o ie

E t b h gP c d re s a lis in ro e u s


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)?


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


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. 9/9/05

Tools for Strategic Planning
• Market research • SWOT analysis • Sensitivity analysis (whatif, scenarios, Monte Carlo) • External benchmarking • Technology forecasting • Product life cycle analysis


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.