Management Information Systems and Corporate Planning

If we accept the correlation between MIS and computer based systems then the corporate planner has to consider the impact on his own company of a major new function. In so far as computers and the associated highly paid staff are concerned, the planner is certainly threatened with a major cost growth area that develops a momentum of its own. He may need all his energy to contain this growth in highly expensive resources to a scale that matches the company's overall operations. On the other hand an emphasis on management information and redesigned systems may lead to radical redesign and improvement in profitability of a company's operations. These two aspects are different sides of the same coin and in the future the corporate planner will play a dominant part in determining whether a company enjoys the benefits as well as incurs the costs of a sophisticated MIS.     

Corporate planning for an uncertain future

The increasing complexity of socio-economic systems has increased the need for planning while at the same time making planning more difficult. Planning in a changing environment for an uncertain future presents the planner with a dual challenge. He must not only identify the forces behind changing circumstances but must also help wean decision-makers from their dependence on single-line forecasts.     

Integrating MRP and finite capacity planning

Traditional production control systems based on the manufacturing resource planning concept do not sufficiently support the planner in solving capacity problems, ignore capacity constraints and assume that lead times are fixed. This leads to problems on the shop floor, that cannot be resolved in the short term. This paper focuses on solving these capacity problems by improving capacity planning at the material requirements planning MRP level through integration of MRP and finite capacity planning. This results in a planning method for simultaneous capacity and material planning. The planning method is based on a new and more accurate primary process model, giving the planning algorithm more flexibility in solving capacity problems. The algorithm is based on advanced scheduling techniques and uses aggregated information, thus combining speed and accuracy. The algorithm is designed to use the available flexibility: alternative routeings, safety stock, and replanning of production orders and requirements. This paper also discusses such related issues as robustness, memory and the role of the human planner.     

Strategies for planning

In recent years there has been a good deal of discussion amongst planning specialists and academics about the gap which exists between the theory of planning as set out in journals and textbooks, and the practice of planning in private and public organizations. Planners are continually complaining about the resistance to planning by top management and operating managers in divisions and departments.In this article the author aims to produce a reconciliation between theory and practice and to discuss what alternative strategies are open to planners in devising planning systems for their organizations.He suggests that the problem has its origin in the fact that corporate planning theory was first developed by management scientists as a total systems approach. Corporate planners have failed to sell an integrated planning system either as programme budgeting or as corporate planning. Research suggests that a management team can only adopt and implement a comprehensive planning system in very special circumstances, e.g. when the organization's survival is threatened, a new management team has been appointed and the staff of the organization are ready to accept radical change.In normal circumstances the planner is wrong to advocate a ‘root and branch’ solution. He must diagnose the planning needs of the organization and his objective must be not merely to establish a particular planning procedure but rather to discover how he can best improve the quality of management decisions.Recent studies on strategy formation indicate that the introduction of a formal planning procedure is only a partial answer to the problem of improving the quality of management decisions.The paper reviews various approaches to planning and considers how they relate to organizations with different strategic problems, with differing organization structures and various management styles.     

STRATEGIC FACILITY PLANNING: THE ANALYSIS OF OPTIONS

This paper addresses the issue of uncertainty in planning the long-term development of facility systems. In certain instances, the high variance of a single future forecast can be reduced by using a set of alternative future scenarios. By carefully selecting facility configurations, the planner can delay the selection of a future set of facility sites at little or no sacrifice while additional information is gathered and uncertainty reduced. This allows the planner to maintain flexibility in adapting to a complex and dynamic environment. Several models are presented for different planning contexts. Examples for each, as well as a robust bicriterion solution heuristic, are also provided.     

Pricing policies and corporate strategy

In this article, attention is drawn to the importance of pricing in the formulation of corporate strategies. The author compares traditional “cost plus” pricing with market oriented approaches, and argues the case for pricing policies to be given greater emphasis in corporate planning. He examines the role of the corporate planner in developing price strategies for existing products and for new products and recommends the formulation of product strategies based on greater price leverage.     

Defining goals—A systems approach

Most planning strategies include a goal development phase, yet very little concrete information is available in the program planning literature to help the planner know what a goal is or should be. Goals play an important role in systems theory and the theory offers a structure for the careful defining of goals. This article identifies the function of goals in systems as being the facilitation of evaluation and control. From this system functional analysis viewpoint, several specific characteristics of goals are derived and discussed.     

The design of computer based planning and modeling systems

Today there are nearly 2000 corporations in North America and Europe either using, developing, or experimenting with some form of corporate planning model. With the emergence of this new and rather substantial interest in the methodology of corporate planning modeling, there appears to be a definite need for a conceptual framework which can be used to design and implement computer based planning and modeling systems.In this paper the authors describe a collection of elements which they believe to be of critical importance in designing a corporate planning model. Their objective is to develop a set of criteria for not only designing a planning and modeling system, but a set of criteria which can also be used to facilitate the evaluation and comparison of alternative planning and modeling systems.There are over 50 planning and modeling software packages on the market today. These include systems such as BUDPLAN, COMOS and SIMPLAN. This paper attempts to provide the reader with a convenient checklist of possible features to consider in either designing one's own system or selecting an appropriate software package.     

Strategic management: lessons from success and failure.

Is Corporate Planning a failure or a success? In this article David Hussey assesses the research which has been done on the planning process and concludes that Corporate Planning obviously has the potential to improve business performance but for many reasons this potential has not been realized. He then examines the attempts which are currently being made to persuade managers to ‘think strategically’, to use portfolio analysis scenarios and other techniques of strategic analysis. He asserts that to succeed, the planner or the consultant in planning must use these and other analytical approaches to help managers ‘to change the perceptual boundaries of the strategic problem’ and generate strategies and action programmes which will enable them to compete successfully in world markets.     

A review of capacity planning techniques within standard software packages

This paper gives a review of capacity planning techniques from which today's standard software packages for production control make their choice. The following techniques are discussed in the paper: four variants of the rough cut capacity check, capacity requirements planning with infinite and finite loading, input/output planning without and with individual work orders, and a number of sequencing techniques. An important issue throughout the paper is the concept of robustness and nervousness of planning techniques, Aspects of interaction between techniques and human planners arc given. The human planner is still an important factor in capacity planning.     

Environmental forecasting and non-profit professional organizations

To undertake any kind of realistic planning activity, it is useful to have a long-term environmental forecast which provides the planner with an overall perspective. The planner will be functioning over the next decade in a very dynamic, complex and challenging political, economic, technological and social environment, and will require very effective planning efforts to cope with such changing environment. This article presents an approach and methodology that a planner could use in his/her organization's planning process. To the best of our knowledge, very few organizations—profit and non-profit oriented—undertake a formal long-term environmental forecast. This article might encourage several planners to examine this area of long range planning in their respective organizations. The long- term environmental forecasting approach presented in this article could be applied by planners in all types of organizations—small or large, profit oriented or non-profit oriented, old or new. This article, however, is based on a study which the authors did for a non-profit organization.     

Exact and approximate algorithms for the loop layout problem

Control parameters, such as order frequency, safety stock and safety time, are important tools to improve the logistic performance in material planning. In practice, the adjustment of control parameters appears to be very difficult. One of the reasons is the lack of relevant tactical control information: a simple, periodical and per-commodity integrated feedback of performance and process information often is not available to the logistic operator. Therefore, the material planner is offered a fairly limited overview and insight of the processes to be controlled. This problem has been investigated in several plants in the Netherlands. A solution to this problem is first to measure the performance, the frequency of process disturbances and the effect of the parameters on performance for all commodities involved. And second, to integrate this information and provide feedback to the responsible material planner. In this article a design for decision support is presented to integrate and give feedback of relevant tactical control information. Prototype information systems are now being tested in practice and in the laboratory. The expectation is that this type of decision support will help the operator to make more systematic and effective diagnoses.     

Confirmatory Factor Analysis of the End‐User Computing Satisfaction Instrument: Replication within an ERP Domain*

Over the past decade, organizations have made significant investments in enterprise resource planning (ERP) systems. The realization of benefits from these investments depends on supporting effective use of information technology (IT) and satisfying IT users. User satisfaction with information systems is one of the most important determinants of the success of those systems. Drawing upon a sample of 407 end users of ERP systems and working within the framework of confirmatory factor analysis (CFA), this study examines the structure and dimensionality, and reliability and validity of the end‐user computing satisfaction (EUCS) instrument posited by Doll and Torkzadeh (1988) . In response to Klenke's (1992) motion to cross‐validate management information system (MIS) instruments and to retest the end user computing satisfaction instrument using new data, this study's results, consistent with previous findings, confirm that the EUCS instrument maintains its psychometric stability when applied to users of enterprise resource planning application software. Implications of these results for practice and research are provided.     

The impact of autonomy on information systems planning effectiveness

Autonomy for information systems planning may have an impact on the effectiveness of that planning. Theory Y suggests that when managers have more autonomy, they have greater feelings of ownership, commitment, and responsibility, and thus perform better. A postal survey of 131 chief information officers of US subsidiaries of multinational firms collected data to test hypotheses based on the theory. Data analysis revealed that autonomy for IS planning in general and the strategy selection planning activity in particular significantly predicted IS planning effectiveness. These findings thus extend the theory to a new domain, namely IS planning in multinational firms, and thereby facilitate a better understanding of the management of IS planning. They further suggest that parent managers consider delegating greater autonomy to the managers of their foreign subsidiaries.     

Decision support for multi-family aggregate production planning

Aggregate production planning decisions are inter mediate range decisions that can have a significant impact on both productivity and profitability. In this paper, we examine an interactive computer-based method that provides decision support for the aggregate planner. The proposed approach combines the judgement of the planner with the optimization of subproblems to arrive at an effective solution for multi-family aggregate production planning problems. In the interactive approach, the planner exercises direct control over sensitive workforce levels and production capacities. A network flow sub-problem solver is used to generate optimal production plans and inventory levels given the user-specified production capacities. Decision aids are provided to help the planner achieve a cost-effective solution that is consistent with judgement concerning workforce levels. Computational testing on five test problems indicates that very cost-effective solutions can be obtained. The results of applying the interactive method to a real-world problem are also reported.     

Strategic planning—Which style do you need?

Strategic planning is now a large and diverse activity practised in many different kinds of organizations. This article provides an overview of the field with a summary of the five main schools of thought each with its own business philosophy and a range of practical approaches and techniques. These basic styles are concerned with planning as a central control system, a framework for innovation, an organizational change process, a political activity, and a way of exploring the future. Most planning systems have a dominant style or focus and this emphasis needs to be adjusted in response to changes which are occurring continually in the organization and in the external environment. The article is designed to help the senior manager or corporate planner to assess the state of planning in his organization and to see where there are important gaps in the enterprise's capability for planning which might be filled by the launching of new initiatives. The article also offers an agenda of approaches for consideration by the executive who wishes to move his enterprise from a conventional 5-year planning and budgeting system towards a more comprehensive process of managing organizational change and development.     

Politics,government and company planning: The new perspective

This paper looks at the developing scene in the U.K., with gloom at home and turmoil overseas: and with a new government committed to non-intervention in industry; to exposure of labour and of products to market forces and to avoidance of detailed economic planning. It examines the reality of party stances over the general field of government/industry relations and over cuts in public expenditure in both central and local government.Finally it examines the role of the professional planner at times of maximum uncertainty: and concludes that given a clear mind and a cool head the planner may be a unique stabilising influence at the heart of the company's affairs.     

Developing planning models

Mr. Holloway joined the Gulf Oil Corporation in 1939. His previous publications are in the fields of chemical engineering, statistics and computing.He is now the Senior Adviser on Planning Systems and member of Gulf's European Planning Council.The paper presents the author's view that linear programming is an efficient vehicle for long range planning, that it is more comprehensive and when properly structured requires no more computer time than the perhaps more conventional simulation models.Further, that it has the great advantage that the planner himself can control not only the data content of his model, but can also control the way in which the data is treated within the model even to the extent of making drastic matrix changes.     

Is your information system mature enough for computerized planning?

This paper presents the results of a study of computerized planning models in 235 firms throughout the world. The authors argue that organizational climate can be a serious pitfall to the inplementation of long-range planning systems. However, their view of climate extends beyond the traditional behavioral domain to include the sophistication of the organization's information system. The paper addresses itself to one of the key questions affecting the implementation of long-range planning systems. Why do some organizations develop computerized planning models and others do not?     

Understanding the planner’s role in lookahead construction planning

Capacity planning is instrumental in production planning as the variability witnessed in construction projects complicates the planner’s role in achieving a balance between weekly task load and available resources. The purpose of this article is to assess the effects of capacity planning on a project’s time and cost performance and to inform planners on the pitfalls of uninformed capacity planning. A simulation model is developed to test several project scenarios against different capacity planning methods. Cost, time and planning quality measures are developed to track project’s performance throughout the construction period. Results show that the planner’s choice of capacity planning method and the type of project both affect a project’s cost and duration. Interestingly, informed planners who are aware of a project’s characteristics are able to achieve the best balance between weekly load and capacity. They are able to reduce incurred costs wasted on idle resources without significantly affecting the construction period.