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.     

Leveraging Supply Chain Integration through Planning Comprehensiveness: An Organizational Information Processing Theory Perspective

This study extends prior research on supply chain planning and integration by examining the underlying capabilities by which firms exploit the information they gain from integration activities. We use organizational information processing theory (OIPT) to develop hypotheses that identify the comprehensiveness of an organization's supply chain planning capabilities as an important mediator in the relationship between its supply chain integration activities and its operational performance. Further, our interpretation of OIPT suggests that an organization's usage of technology‐enabled supply chain management systems (SCMS) moderates these effects. Using survey data from 445 global firms, we estimate the corresponding moderated‐mediation structural model. The results indicate that usage of SCMS enables organizations to better utilize the information they gain from external integration efforts (relationships with customers and suppliers), thus improving the comprehensiveness of their supply chain planning capabilities. In contrast, the use of SCMS appears to be a partial substitute for internal integration as a driver of planning comprehensiveness. Most importantly, the results suggest that planning comprehensiveness is a significant generative means by which integration and technology investments produce superior operational performance. These findings provide a richer and more theoretically grounded explanation of relationships between supply chain integration, supply chain planning, and operational performance.     

Experience with a multi-year fleet planning model

The fleet planning problem requires determination of the changing airline fleet mix based on existing traffic levels and projected growth, on the existing fleet, various aircraft types available in the future, and other operational and financial considerations. Several applicable mathematical formulations have been reported. One of these has been programmed for the computer and used by the authors for several years. This paper discusses the application of that model to real airline planning situations. Such practical experience has effected changes in the program and the manner it is used in fleet planning studies.     

Tactical and operational planning of express intra-city package services

In this paper, we focus on routing and load planning associated with the tactical and operational planning of an express intra-city courier service provider that receives a large number of shipments on a daily basis and is committed to delivering them to their destinations given a short service guarantee. Tactical planning relies on high-level aggregated demand rates over long time periods and takes the form of a multi-commodity service network design where the goal is to identify one path per commodity while maximizing consolidation opportunities in the network. Commodities are transported on their paths by means of a series of continuously operating vehicle cycles, where the structure and number of such cycles are determined concurrently with commodity path assignment decisions in a mixed integer programming. A second model is designed to refine the time allocation along different segments of a commodity path allowing a potential reduction in the number of vehicles required to meet the service guarantee. In operational planning, the focus is narrowed down to a shorter time period, and the baseline plan obtained from the tactical planning phase is adjusted to better fit potential deviations in observed demand patterns compared to the aggregate patterns. Through an extensive computational study designed on the topology of a major US city, we observe that the plans designed at the tactical level guarantee high service levels, which are improved at the operational level by customizing the plan to the special characteristic of a day of operation.     

Operations in Financial Services—An Overview

We provide an overview of the state of the art in research on operations in financial services. We start by highlighting a number of specific operational features that differentiate financial services from other service industries, and discuss how these features affect the modeling of financial services. We then consider in more detail the various different research areas in financial services, namely systems design, performance analysis and productivity, forecasting, inventory and cash management, waiting line analysis for capacity planning, personnel scheduling, operational risk management, and pricing and revenue management. In the last section, we describe the most promising research directions for the near future.     

Corporate planning—a conceptual critique

Corporate planning is accepted by some as being an effective, efficient, and feasible means of charting the path an enterprise takes through the future. In this paper the author questions both the concept and the contribution of corporate planning. The author examines not only the problem of budgetary analysis within a planning process but also questions the ability of corporate planning to provide the necessary perspective of the future in any identifiable or probabilistic sense. The author postulates ‘the guts of corporate planning’. In the author's own word conceptual critiques ‘may be defined as setting up your own straw man in place of the other fellow's sawdust totem’. However, this paper presents some controversial yet fundamental criticisms of the current concepts of corporate planning. It is for the reader to judge whether the straw or the sawdust is deepest.     

A modelling system for local government resource planning

A major problem in local government is how to maximise the effectiveness of resource allocation. Senior officers and members concerned with corporate and strategic issues must take account of contemporary information of considerable variety and combine this with estimates of the future in their attempts to achieve rational resource allocation. This article describes the development of an experimental computer based corporate modelling system at Clwyd County Council which was designed to support allocation decisions pertaining to a 5 year planning period. It is concluded that a firm basis was achieved for progress towards a comprehensive operational system.     

A framework for production control in health care organizations

The paper presents a hierarchical framework for production control of hospitals which deals with the balance between service and efficiency, at all levels of planning and control. The framework is based on an analysis of the design requirements for hospital production control systems. These design requirements are translated into the control functions at different levels of planning required for hospital production control. The framework consists of five levels of planning and control: patient planning and control, patient group planning and control, resources planning and control, patient volumes planning and control and strategic planning, though this last level does not make part of production control as such. Each of the levels of the framework is further elaborated in terms of the decisions made regarding patient flows and resources, and the co-ordination of the different planning levels. Implications of the framework are discussed by describing some points where current practice deviates from assumptions made in our approach. Recommendations for future research and development of the planning framework are formulated.     

Focusing innovative effort through a convergent dialogue

This is the first of three articles on Planning for Technological Innovation by Peter Ward (the second and third articles will be published in future issues of the Journal). Appropriate innovation, in products, processes and management, is a means by which industry adapts to a changing environment. Adaptive or dynamic planning at the corporate level serves to foster and direct the necessary effort, as does organic planning in a wider context. The methods described are based on practical experience in industry and consulting work.     

The value of accuracy in information for planning and control

In the operation of planning and control systems we have to utilize information which in many categories possesses errors. It is important, therefore, to be able to assess the impact of inaccurate information on our plans. The author discusses some approaches to this problem when the planning system involves formulae of the management accounting type or models of the operational research variety. The value of information is clearly related to its accuracy and the most appropriate method for quantifying information value in management information systems is through Bayesian analysis and decision trees.     

Setting operational goals for corporate social responsibility

In this article the author argues that more formality in social responsibility planning efforts is a concept which is extremely pertinent in today's conditions. Rewards will accrue to the organization that can move beyond aesthetic objectives and achieve operationality in social responsibility goal setting. This requires, basically, the application of techniques that have proved to be successful in MBO programs. By translating broadly stated social objectives into goals that are clear, concise, time related and cost related, management will inject an increased measure of integrity into its planning process, improve social responsibility programs, assure future successes in the social performance arena, facilitate the appraisal of management personnel, and enhance the organization's credibility with its multiple publics. Positive benefits will flow to the organization, its immediate publics, and to the society at large as a consequence of operational planning methods as described herein.     

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.     

IT security planning under uncertainty for high-impact events

While many IT security incidents result in relatively minor operational disruptions or minimal recovery costs, occasionally high-impact security breaches can have catastrophic effects on the firm. Unfortunately, measuring security risk and planning for countermeasures or mitigation is a difficult task. Past research has suggested risk metrics which may be beneficial in understanding and planning for security incidents, but most of these metrics are aimed at identifying expected overall loss and do not directly address the identification of, or planning for, sparse events which might result in high-impact loss. The use of an upper percentile value or some other worst-case measure has been widely discussed in the literature as a means of stochastic optimization, but has not been applied to this decision domain. A key requirement in security planning for any threat scenario, expected or otherwise, is the ability to choose countermeasures optimally with regard to tradeoffs between countermeasure cost and remaining risk. Most of the planning models in the literature are qualitative, and none that we are aware of allow for the optimal determination of these tradeoffs. Therefore, we develop a model for optimally choosing countermeasures to block or mitigate security attacks in the presence of a given threat level profile. We utilize this model to examine scenarios under both expected threat levels and worst-case levels, and develop budget-dependent risk curves. These curves demonstrate the tradeoffs which occur if decision makers divert budgets away from planning for ordinary risk in an effort to mitigate the effects of potential high-impact outcomes.     

Integrating decision making and regulation in the management control process

The significance of control in business is undeniable, and this work revisits management control and the management control process. An interpretation of existing approaches leads to a new way of integrating the managing processes of decision making and regulating. This promises to provide the means of a more explicit behavioural control of operational business processes. Such control is made possible where the controlled work activities (and the work activities of the manager) take place in an IT environment which possesses knowledge of such processes. The control action influences operational behaviour by manipulating the definition of these processes at run time. This will enable control structures to be more formalised where appropriate, improve coordination between control and operations, and improve coordination between control processes. Two implementable models of control processes are proposed together with an indication of how they might be integrated into business processes to provide holistic support for business activity.     

Kanban-based operational planning and control: simulation modelling

Selected published research on Kanban-based operational planning and control in assembly and flow lines is reviewed. The article focuses on simulation models and distinguishes between explorative and comparative type research. Operational and experimental design features reported are summarized in tabular format. Features of each study are discussed, findings are compared and ideas for research directions are given.     

Editorial for special issue on: humanitarian operations management

Abstract

Over the past decades, there has been increasing interest in studying humanitarian operations management. The mismatch between global humanitarian needs and the resources available, together with chronic vulnerability in many parts of the world, continues to have a direct bearing on the lives of millions of people in need of assistance. It also means that donors have to re-double their efforts to respond to disasters in a more efficient and effective manner. International humanitarian organizations (IHOs) often deal with a mix of disaster response and development programmes simultaneously. This operational mix entails disaster cycle management challenges such as project and programme planning of multi-objective global logistics, balancing earmarked donations for disaster response with budget needs for development programmes, and determining the push-pull boundaries in the supply chain, particularly with the increase in cash transfer programmes. The main purpose of this special issue is to report on research in humanitarian operations management. This special issue attempts to explore and examine the above topical issues at strategic, operational and technical levels.     

生产性企业的概念性学习和操作性学习研究

本文用一个最优控制模型定量刻画了生产性企业计划期内的概念性学习和操作性学习与生产率、单位成本、废品率以及计划期内的总利润等生产经营指标之间的关系。模型的特点在于其能够规范地描绘众多变量之间的复杂关系。并简要阐述了由模型推导出的一些关于最优概念性学习和操作性学习策略的结论,详细分析了这些策略在生产性企业组织学习实践中的应用,获得了不同于传统理论的结果。     

Corporate planning a review of questions and answers

This paper is about corporate planning, seen primarily but not exclusively from the viewpoint of operational research. The reasons for the rise of interest in corporate planning are examined, as are the contributions which O.R. has made or can make to corporate planning problems. An abstract discussion of these problems concentrates on those posed by increasing “connectedness” in the environment. After comparing the responses of the “commonsense manager”, the model-oriented operational researcher, and the cybernetician, the question is posed: “How can the operational researcher or planner enhance the adaptive capability of his organization?” A case study illustrates one possible form of solution, the “modular” approach; and another, the “zoom-lens” is outlined. The relevance of global system modelling to the widening problems of the corporate planner is also considered, and related to the concepts previously discussed.     

Resilience metrics in the assessment of complex supply-chains performance operating under demand uncertainty

The design and planning of resilient supply chains is a major challenge due to the increasing complexity of these systems that operate in a global market and therefore are more exposed to disruptions. In the present work a design and planning model that integrates demand uncertainty is applied to five supply chain structures that are submitted to different types of disruptions. Disruptions are modelled in a probabilistic manner, resulting in the incorporation of two sources of uncertainty. Eleven indicators are considered to assess the supply chains’ resilience, which comprise network design, centralization and operational indicators. The goal is to provide managers what are expected operational impacts (measured by the operational indicators) by assessing the behavior of network and centralization indicators and their known resilience behaviors from the literature. A case study of a European supply chain is used to illustrate the methodology and a discussion on the results obtained is presented in order to conclude which main characteristics a manager should consider when designing and planning resilient supply chains.     

An exact micro–macro approach to cyclic and non-cyclic train timetabling

When planning new railway infrastructures in order to enhance the network to meet future demand, the capacity departments of railway operators typically have to face a time consuming trial-and-error process. The process involves the computation of a new timetable which satisfies the demand and is feasible w.r.t. the enhanced network, and is typically carried out by expert personnel with little or no assistance by computer tools. The quality of the results is thus very dependent on the skills of the individual planner. In this paper, we describe an exact approach to produce train timetables in short computation time. The approach extends the models and decomposition algorithms previously developed for train dispatching, a deeply related operational problem. The problem is solved at the microscopic level and the final timetable, even if in general non-cyclic, can incorporate cyclicity constraints for any subset of trains. Results are presented for a feasibility study in the Oslo area commissioned by the capacity planning department at Jernbaneverket (Norway׳s infrastructure manager).