The use of a model in long term planning—A case history

Long term planning in companies can range from the partial simplistic approach to a structured time-consuming ritual. Either extreme can bring planning into disrepute, and both reflect the lack of the proper tools of the trade. Models, by themselves, are no panacea, but properly conceived, constructed, and developed they can transform the planning process. The key to effective and practical models is use, and this can be achieved through direct management involvement on the model's development, and by making sure the model is basically simple and flexible. This article describes how such a model was constructed using a modular approach, and how it was used effectively in long term planning.     

Mechanisms for environmental scanning

Over the past decade long range planning for industrial concerns has needed to take into account an everbroadening spectrum of environmental influences. Whereas at one time planning largely concerned itself with those aspects of the environment to do with the company's markets, nowadays the influence of other parts of the environment may have equal, or even greater influence than markets on the company's operation. The current environment of most industrial concerns appears to be characterized by three main components. Firstly, the environment is increasingly turbulent and uncertain. Secondly, organizations are increasingly less autonomous. Thirdly, other formal organizations are increasingly important components of a company's environment. The environment of most companies is therefore complex and uncertain. This complexity and uncertainty can only be reduced by attempting to analyse and understand the environment as an ongoing process, this process is now being called ‘environmental scanning’. The aim of this article is to describe some of the mechanisms which have been used to help companies scan their environments as a way of planning and controlling their destiny in the turbulent environment in which industry operates.     

Some statistical aspects of manpower planning in the civil service

A special feature of modern manpower planning methods is the use of computer-based statistical models, and the Civil Service Department is taking the lead in their development and use for manpower planning in the non-industrial Civil Service. Account is being taken of related data requirements in the development of a new Personnel Record Information System which will replace a range of existing records.Development work in hand covers both the “demand” and “supply” aspects of manpower planning and a bank of generalized “supply” models is in operation. Stationary population, renewal and Markovian principles are involved, and the particular statistical problems of modelling small manpower groups are being met in the development of a “small group” simulation model.     

A descriptive model of electricity consumption

The purpose of the model is to give corporate planning personnel, particularly ratemakers, or marketing people, a tool to evaluate quickly how many customers are included in a definite block of energy consumption within some limits of power demand. This will allow them to evaluate the number of customers that will be affected by any proposed rate schedules and, then, to evaluate the resulting effects on utility's revenue. Moreover, this model can, in any time, become a part of a larger model that could be used for financial planning, market analysis, or any other econometric model.     

How corporate planning responds to uncertainty

This article is based upon an SSRC research project into the influence of computer methods on decision making. During this research, information on the planning systems of a cross-section of British industry was obtained.The paper illustrates how managers in these firms were coping with planning in the present conditions of extreme uncertainty about the future, combined with adverse economic and business conditions. Conventional planning theory, together with some modern observations on it, are briefly described and then the paper shows how, in the firms visited, the structure of planning was more complex than this theory.It goes on to show that today's critical conditions were not leading to management putting aside their plans and computer models and “muddling through’. They were actually leading to an acceleration in the adoption of formal planning and decision making methods but in a somewhat different manner to conventional planning theory.Seven different modes of planning were identified with integrated operational planning being the most common, possibly the most essential to survival and sometimes the only planning possible into today's conditions. A trend to extend the operational plan to 2 to 3 years and to reduce the firm's long range plan from 5 to 3 years was also observed.Long range plans were being considered as planning and decision making tools and not as blue-prints of the firm's future, as accurate long range forecasting was impossible. Three types of strategic planning were identified with that carried out at intervals probably being the most appropriate for medium sized firms in today's conditions.     

Simplified production management software for the small manufacturing firm

This paper proposes design rules in order to simplify current MRP II software systems and make them suitable for the small manufacturing firm. Simplification rules apply to production data management by reducing database complexity. This has consequences for medium-term requirements planning which is moved toward the realization of simultaneous material and capacity planning. The simplification procedure is completed by applying aggregate decision models to shop floor control which allow the introduction of a minimal transaction processing system. Object-oriented analysis concepts are used for the design of the primary production data model, which has a consistent effect on transaction data and decisional procedures throughout the whole production management software system.     

Patent portfolios for strategic R&D planning

Empirical research has found a discrepancy between the perceived importance and the actual level of information on competitor's R&D strategies. It has been argued in the literature that patent information might be used to overcome this information deficit. However, empirical research further reveals that patent information is rarely used in strategic R&D planning. The present paper explores this issue and introduces two types of patent portfolios for strategic R&D planning. In patent portfolios on the company level, patenting strategies are identified and the quality of overall technological positions is benchmarked against relevant competitors. In addition, we present a patent portfolio on the technological level, which, as it is known from various technology portfolios, helps companies to manage the allocation of R&D resources effectively. Based on patent data from 21 German, European and Japanese mechanical engineering companies we show the application of both patent portfolios for strategic R&D planning purposes. The patent portfolios prove to be a very valuable tool for R&D decision makers in companies. Based on the experiences made in the case study, recommendation for the effective use of patent portfolios are formulated.     

An integrated approach for manpower planning in the service sector

The manpower planning problem receives considerable attention by the management of service organizations because they are typically labor intensive. Not only must optimal staff sizes be determined over an extended horizon, but optimal staff schedules which assign labor to tours of duty and specific tasks, given the available staff size, must also be found. Adding to the complexity arising from the interrelatedness of the staff-sizing and staff-scheduling problems is the existence of the conflicting multiple objectives of minimizing costs and maximizing customer service. The few methodologies reported in the literature which treat the complete manpower planning problem as stated above have several shortcomings. Some techniques place a severe strain on computational capabilities. Also, these methods confound the specification of the goal levels with the analysis of the relative goal weightings. Often the specification of the desired goal levels is made at a different level in the organizational hierarchy than the specification of the relative importance of the various goals. This paper suggests an approach which overcomes these shortcomings. The methodology utilizes a simulation model with an imbedded heuristic procedure for the staff-scheduling problem to identify realistic aggregate staff-size goals to be used in a multiple-objective staff-sizing model. The methodology is applied to the manpower planning problem of a large sectional center post office and the managerial benefits are discussed.     

A Simulation Metamodel for Response-Time Planning*

Field service management continues to be a major challenge for many service organizations as companies are required to provide more service with less resources. Especially in information intense environments, short response times for service calls are essential to avoid disruptions to a business office or production facility. Managers must regularly assess their manpower needs, and ensure that their allocation and operational decisions lead to the best service at the lowest cost. Xerox Corporation provides copiers, duplicators, and printing systems to an international market. Xerox operates a service network consisting of over 30,000 trained service personnel, each allocated to service regions by the service planning staff. Response-time planning involves many challenging problems: requirements planning at the national level, allocation planning at the district level, and operational planning at the team level. Customer service is critical and is commonly measured by response time—the time that elapses from when a service call is placed to when a service engineer begins service. This paper discusses how Xerox Corporation has used simulation models and metamodels to improve response-time planning and field service operations.     

Strategic planning in 21 U.K. companies

This article is based upon an analysis of strategic planning performance in 21 UK companies and discussions with 91 executives in those companies. The author's findings stress some of the problems related to strategic planning particularly with regard to the importance of informal and political processes in planning.     

The effects of macroeconomic developments on individual companies' flows of funds

A system of models is described which traces the impact on individual companies' finances of changing the macroeconomic environment. This system comprises models of individual firms integrated with Cambridge's large-scale disaggregated model of the UK economy. Illustrative projections are provided for the period 1980–1988 for three companies under alternative exchange rate and interest rate assumptions; a balance sheet, income appropriation account and funds flow statement is generated for each company-year and each assumption. These case studies illustrate how sensitive companies' finances can be to changes in the macroeconomic environment and also how dissimilar can be the response of different companies' flows of funds to the same macroeconomic change.     

A manpower planning model for organizational effectiveness

In this article the author argues that micro-manpower planning is finally beginning to emerge as a process for helping individuals and firms to play an active role in developing integrated approaches and facilitating interrelationships within an organization. Additionally, that it is in a unique position where it can relate many of the foundations formulated by many segments of organizational theory and mathematical modeling into a cohesive and practical application format for practicing administrators.Naturally, the developed Markovian model is a stable process and assumes stable probabilities of movement with the system. Additionally, it assumes that movements between the states are dependent solely upon the previous state of location which is usually false in a business organization where movement is also dependent upon length of time in state, previous states occupied, and personal variables. But, the Markovian process can be viewed as a relevant modeling technique even with these constraints.These factors are combined to examine and discuss the organization's effectiveness and its bargaining position in terms of manpower resources. Additionally, policy decisions which would be made based upon the interrelationships of the personnel and industrial relations departments and the firm's technical core are discussed.     

Food manufacturing: The future prospect

This article provides an analysis of the environmental factors which are likely to influence the nature and level of activity in Britain's food industry over the next 10–15 years, and in particular planning for human resources. The article covers the historical perspective: the present market position and the consequences of misplaced optimism; examines the prospects for the medium and longer term in relation to the world food problem and the industry's opportunities: and considers some of the manpower implications.     

Planning for strategic decision support systems

The emergence of Strategic Decision Support Systems has opened up new vistas for the true integration of formal models into the strategic planning process. However, with these new opportunities also come the need to develop planning mechanisms that will permit these sophisticated systems to achieve their potential. The process of strategic planning for Strategic Decision Support Systems that is described in this article serves to cast the organization's overall plans, strategies and strategic attributes into a framework that can be used to develop formal SDSS plans.     

Strategic planning for social and political change

Formalized planning is currently applied to planning for operations and capital investment, planning for products and markets, and occasionally for manpower. However, there is little evidence that companies are producing formal plans and programmes to deal with social and political change. Unfortunately, public opinion is moving against business, action groups inside and outside companies are challenging the authority of management, and public officials and politicians are already framing new laws and regulations. Unless managers begin to get more involved in the framing of these controls they are likely to find laws enacted and enforced by people who have little knowledge or sympathy with business. In this article the author points up the necessity to assess the social and political challenge to their business, and formulate and implement social and political strategies and plans aimed at ensuring the survival and prosperity of their organisations.     

Development and analysis of mathematical and simulation models of decision-making tools for remanufacturing

This article presents decision-making tools for remanufacturing. The first decision-making tool was used to address inventory lot-sizing problems in a hybrid remanufacturing–manufacturing system with varying remanufacturing fraction. In this article, the new inventory lot-sizing model with variable remanufacturing lot sizes has been shown to exhibit better performance than the benchmark model with fixed remanufacturing lot sizes. The new inventory lot-sizing model is anticipated to become a valuable decision-making tool in companies that are planning to adopt remanufacturing. The second decision-making tool was applied to address a production and inventory planning problem in a remanufacturing system considering different remanufacturing policies for a given remanufacturing strategy. For a remanufacture-to-stock system with two quality remanufacturables groups four alternative policies were examined, a policy which specifies simultaneous processing utilising dedicated resources was shown to be the best policy to achieve a shorter remanufacturing cycle time. For a remanufacture-to-order system with two quality remanufacturables groups, the three relevant policies of the four alternative policies were examined, a policy which specifies sequential processing and switching between various quality remanufacturables groups was shown to be the best policy to achieve a shorter remanufacturing cycle time. The production and inventory planning simulation models in a remanufacturing system are expected to become significant decision-making tools in remanufacturing operations.     

Developing a manpower strategy for an industry

This paper considers the following issues for developing an industry manpower strategy. An idea of the national system that exists for implementing a manpower strategy. The main questions arising from the strategy, and a definition of manpower planning. From this, the information and analysis techniques used to identify the strategy. The first application produces a manpower picture of the foundry industry. For company manpower planning the paper describes a manpower model of a company, and how the relationship between the activity and employment patterns of boundries was investigated. The industry findings are verified by company manpower planning investigations using the same information and techniques. The conclusions discuss some of the strengths and weaknesses of using this approach.     

Organizing for strategic management— A conceptual model

Managing the strategic problems is a complex process. In order to organize this process efficiently in one's own company it is necessary to understand and be able to communicate the basic factors involved. In the author's view there is a need to compile into a model concepts, relations and organizational principles of major importance to successful strategic planning. This article is based on the author's analysis of current literature and his own practical experience in Scandinavia. The article presents a conceptual model for strategic management including the planning process as well as the execution of strategic decisions. This model is related to basic organizational principles and the methodology used in project management.     

Am I a leader or a friend? How leaders deal with pre-existing friendships

We studied employees who were promoted into a leadership role from within their workgroup and explored how they dealt, psychologically, with being both a leader and a friend of their subordinates. In an inductive, qualitative study of 33 individuals from across three organizations (two mining companies and one childcare organization) we found that these people experienced psychological conflict that resulted in them feeling vulnerable to being exploited or being afraid to use their power over subordinate-friends. We identified five strategies that were used, namely abdicating responsibility, ending the friendship, establishing the divide, overlapping the roles, and using friendship to lead. We developed a model whereby the type of psychological conflict and the person's leader identity (either “the boss”, just a role, or a weak or non-existent leader identity) leads to the choice of resolution strategy. This exploration into understanding pre-existing friendships demonstrates the ongoing need to consider those in a leadership role as “people” and not just “leaders”.