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• Module overview
• 1. Introduction to planning
  • 1.1 Types of plans
    • 1.1.1 Some definitions
    • 1.1.2 Domains of planning
    • 1.1.3 Users and levels of planning
  • 1.2 Completing a planning cycle
    • 1.2.1 A planning process
    • 1.2.2 Tactical and operational planning
    • 1.2.3 A participative planning process
    • 1.2.4 When to complete business planning
  • 1.3 Implementing an operational plan
    • 1.3.1 Define the plan's purpose
    • 1.3.2 Setting the planning period and scope
    • 1.3.3 Why plans fail - The strategic level
    • 1.3.4 Why plans fail - The operational or project level
  • 1.4 SMART goals
    • 1.4.1 S.M.A.R.T. Goal statements
  • 1.5 Contingency plans
    • 1.5.1 Why contingency plan?
    • 1.5.2 Contingency plans and risk
    • 1.5.3 Contingency planning actions

• 2. Plan and manage resources

  • 2.1 Plan and manage human resources
    • 2.1.1 Recruitment
    • 2.1.2 Selection
    • 2.1.3 Induction
  • 2.2 Enterprise Resource Planning (ERP)
  • 2.3 Purchasing resources
    • 2.3.1 Tangible and intangible assets
    • 2.3.2 Acquisition costs
    • 2.3.3 Depreciation costs
    • 2.3.4 Planning resource acquisition and utilisation
    • 2.3.5 Estimating resource needs
  • 2.4 Manage Capacity
    • 2.4.1. Planning capacity
    • 2.4.2. Measuring capacity
    • 2.4.3. Matching operations plans with capacity
    • 2.4.4. Capacity analysis and economies of scale
    • 2.4.5. Capacity and performance effectiveness
    • 2.4.6. Determinants of capacity
  • 2.5 Aggregate and Master Planning
    • 2.5.1 Master Schedule
    • 2.5.2 Operational control and resource planning
    • 2.5.3 Demand and scheduling control

• 3. Risk Management

  • 3.1 Risk Management
    • 3.1.1 Potential benefits from an effective risk management
    • 3.1.2 Classifying risk
    • 3.1.3 Risk and ANZS4360:2004
    • 3.1.4 Risk analysis
  • 3.2 Estimate the risk attached to a corrective action
    • 3.2.1 Risk analysis categories
    • 3.2.2 Prioritising risks

• 4. Planning projects

  • 4.1 Planning the project
    • 4.1.1 Setting the project plan
    • 4.1.2 Setting achievable outcomes
  • 4.2 Controlling Projects
    • 4.2.1 Personnel resources
    • 4.2.2 Managing project costs
    • 4.2.3 Value of managing project costs
    • 4.2.4 Estimates
    • 4.2.5 Cost Coding
    • 4.2.6 The time factor
  • 4.3 Scheduling project tasks and activities
    • 4.3.1 Project timelines and deliverables
    • 4.3.2 Critical Path Analysis (CPA)
    • 4.3.3 PERT
    • 4.3.4 Seven steps to project scheduling
    • 4.3.5 Completing project schedule activities

• 5. Problem solving and decision making

  • 5.1 Problem solving
    • 5.1.1 The problem solving process
    • 5.1.2 Solutions search
    • 5.1.3 Removing root causes
    • 5.1.4 Solutions implementation through inclusive communication processes
  • 5.2 Decision making
    • 5.2.1 Decision making model and leadership styles
  • 5.3 Decision making approaches
    • 5.3.1 The logical systems
    • 5.3.2 Contingency approach
    • 5.3.3 Quantitative - schematic and mathematical approaches
    • 5.3.4 Critical Path Analysis
    • 5.3.5 PERT
    • 5.3.6 Group quantitative approaches
    • 5.3.7 A qualitative approach
  • 5.4 Context and the influence on the decision processes
    • 5.4.1 Factors in decision making
    • 5.4.2 Rational decision making
    • 5.4.3 Creative decision making
  • 5.5 Scenarios for team decision making and problem solving
    • Problem scenario number 1 - Lost in the bush
    • Problem scenario number 2 - Toothpaste blues
    • Analysis of personal behaviour in groups

2.5.2 Operational control and resource planning

In these previous sections we have studied the inputs and organisation's environmental variables that impact an operational planning process. Controlling operational variables such as resources, people and customer needs, illustrates why managers must appreciate how decisions being made can implicitly influence the processes they are controlling.

Control of operations basically refers to the removal of variations in activity that adversely alters the attainment of planned outcomes. Yet what factors are 'within' the control of a manager undertaking operational planning?

We know some important organisational determinants exist prior to an operational manager's direct role in achieving the transformation of inputs to achieve planned outputs. Some of the most critical we need to note includes the following.

Type of Operation
The operation to be managed may be function-centred with functional relationship changing with the operation being conducted, or it may be market or customer-centred with the relationships between every stage and member determined by a defined customer outcome.

Planning objectives
The organisation will have established business plans that orient operational plans and capacity plans towards achieving broad organisational strategic aims. Strategic objectives will already reflect the market (product development, niche, diversification, mix, etc.) and key result areas (strategic priorities) operational managers need to achieve.

Forecasts and Planning
Future considerations and forecasted outcomes will most likely be producing information well over-the-horizon (beyond 2 years) of the planning control an operational manager's own operation plan.

Profitability and Growth Strategies
Future direction and profitability will require organisation wide considerations of resource allocation and more long term plans. Depending on the size of the organisation and the factors identified above, operational managers exercising control may only be vested with the authority to apply resources to achieve the outcomes established in an operation plan, or the production plan or schedule.

To use a standard definition, operations control focuses on:

Scheduling processes and production to ensure a business can meet current and future demand for its goods and services. Essential to these considerations is what needs to be produced, held in inventory, shipped and what resources are required to complete these tasks.

The control process identifies the relationship between planning to meet customer demands and actual outputs to meet the identified customer requirements. In terms of our examination in this chapter, controlling operations management covers (1) the establishment of standards that are described in terms of the customer demand, (2) inputs to meet the stated requirements, and (3) the transformation of resources into outputs (service or product) that satisfy the customer demand.

Standards for evaluating and monitoring performance to achieve the operational outcomes will vary with each customer or operation. Standards can be defined by characteristics including:

• Scope
• Time (e.g. time to produce a product)
• Productivity (e.g. number of employees to produce a product)
• Cost (e.g. cost of production minus return)
• Quality (e.g. non-variance from target)

(The above are covered in more detail within the project management topic area)

Standards are used to establish required outcomes against which actual operational performance can be evaluated. Managing the control of operations is to achieve the standards of performance required to continually meet customer demands. Variations from standards need to be identified and causes of variation removed. Today it is more the monitoring of performance standards that delineate the manager's role from more traditional approaches where the manager's capacity to plan and control the implementation of the plans was seen as the core factors in controlling operations.

Standards can be set for each product or service, for each customer, or for the whole operational process. They can be derived from:

• Strategic objectives - Key Result Areas and Key Performance Indicators;
• Customer audits and trends;
• Experience;
• Studies of a competitor's performance (benchmarks or Performance Score Cards); and
• Regulations or statutory requirements.

Standards should not be seen as inflexible requirements. Standards need to move with the customer's expectations and needs. For example, setting standards based on historic trends, either in price or consumer behaviour, may not necessarily meet a competitor's standard in a highly competitive marketplace.

Traditionally the concept of control was seen as a function of those managing operations. Gordon et al. offer an overview of controlling operations as a sequential approach that overlays the concept of operational management a system. They identify that the operations process is constructed of a sequence of events that need to be controlled by the manager. Control is expressed by establishing standards, evaluating performance against standards, and action being undertaken to correct performance deficiencies.

More recent approaches to management in open systems have tended to place less emphasis on functions and heavier emphasis on processes being responsive to customer and market demands. This has tended to place greater stress on building operational plans that enhance responsiveness within the existing strategic systems. Such planning systems promote the use of control as a means to meet internal and external demands.

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