Introduction to Management and Leadership Cluster 6: Plan strategically Show 1 Plan and manage resou

1
Introduction to Management and Leadership
Cluster 6 Plan strategically Show 1 Plan and
manage resources
2
Step-by-step guide for selecting people to
complete a plan

• Identify any relevant legislation and
  organisational policy
• Obtain a job description
• Establish selection criteria
• Short list job applications
• Conduct an interview
• Short list and check references
• Choose the best candidate and follow-up

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Induction

• Once a new employee has been hired it is
  important to introduce them to the workplace and
  help them adjust to their new work environment.
  Many workplaces have an induction checklist that
  outlines what is to be covered in this initial
  employment phase. Some elements of an induction
  process are required by law, such as the
  Occupational Health and Safety requirements of a
  job. Other topics that may be covered in an
  induction may include
• Where the employee will be working
• The nature of their duties
• Who it is that is responsible for supervising the
  employee
• Who the employee is responsible for supervising
• Where to find workplace amenities such as
  toilets, canteens, parking, etc.
• Security and access issues

4
Enterprise Resource Planning

• ERPs are management information systems that
  integrate and automate many of the business
  practices associated with the operations or
  production aspects of a company. These typically
  include manufacturing, logistics, distribution,
  inventory, shipping, invoicing, and accounting.
  Enterprise Resource Planning or ERP software can
  aid in the control of many business activities,
  like sales, delivery, billing, production,
  inventory management, and Human Resource
  Management Systems (Source http//en.wikipedia.o
  rg/wiki/Enterprise_resource_planning)

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The need to balance capacity
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Capacity planning

• Planning capacity is one of fundamental
  importance to organisations seeking to maintain
  competitiveness. In essence the managers role
  is to convert the existing information on
  strategic directions into process or business
  unit outcomes. How this is done will vary with
  the type of processing occurring in either a
  service or manufacturing organisation. There are
  three basic types of processing that will impact
  how planning can occur
• Continuous Output that is generated through
  ongoing and continuous processes that may occur
  over extended lengths of time.
• Intermittent Output that is generated through
  non-continuous cyclic or staged plans (Eg.
  Seasonal requirements).
• Project Output tied to an event, service or
  product within a given time frame.

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Capacity

• Capacity refers to an upper limit or ceiling on
  the load input or output that on operating unit
  department, store, process, team, person, etc.
  can handle (Stevenson 1993240).
• Capacity Planning involves the long and short
  term planning of the systems potential for
  transforming resources into outputs demanded by
  customers within a set time period.

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Average Utilisation Rate

• The core questions capacity planning must
  resolve are
• What kind of capacity is required?
• How much is required?
• When is the capacity required?
• At each level of analysis the manager(s) must
  also review the feasibility of achieving the
  requirements and the ability to optimise existing
  organisational resource use.
• Traditionally current capacity was determined by
  a simple formula identifying the average
  utilisation rate. Average Utilisation Rate (AUR)
  or the extent to which technology, space, or
  labour is being utilised) was derived from
  dividing average output rate by capacity.
• Measures of capacity will vary with the type of
  organisation.

AVERAGE OUTPUT RATE
CAPACITY
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Aggregate planning

• Aggregate Planning involves grouping like
  products or services for a given client into
  related or natural families (determined by
  skills, resources and equipment are the same to
  complete production). Aggregate capacity is then
  planned based on resources and process
  requirements to produce the family of products
  (capacity group) to meet planned aggregate
  customer demand

10
Master planning

• Master planning can be either -
• Set broadly to meet needs as expressed by the
  aggregate customer demand and the capacity to
  process demand. This results in a capacity plan.
• Set narrowly to ensure actual item demands can be
  met with existing process demands and resources.
• Steps in Aggregate Planning include
• Choose capacity group or fictitious
  product/service
• Determine aggregate capacity to transform
  resources
• Converting average aggregates into actual items
  of production
• A Master Schedule is often used as a term to
  describe how organisations place actual orders
  into time slots, product by product.

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Aggregate planning relationships
Manufacturing
Service
Aggregate Plans
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Capacity management options

• Accept demand forecast and respond to
  fluctuations in demand.
• Create contingency plans for unanticipated
  variations
• Vary Resources by
• changing inventory levels
• Varying production volumes
• varying work force size by hiring or layoffs
• Subcontracting/ adjusting work-force size
• part-time workers

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Just In Time

• J.I.T. focus
• Remove waste
• Schedule small lots/ batches
• Substantially reduce, if not eliminate, inventory
• Eliminate downtime and delay/ queuing
• Remove rework
• Demand quality from suppliers
• Respect people and customers
• Aim for zero variation
• Continuously improve

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Control of operation

• 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?

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Scheduling activities

• Sequencing involves determining the order in
  which jobs at a work centre will be processed to
  match the completion time and standards of
  performance required.
• Priority setting involves establishing the order
  in which jobs can be processed to meet production
  needs (EG. First-in-First Served, Due Date
  processing, Rush order)
• Job time requires the identification of the time
  needed for set up and processing the job with the
  existing available equipment, skills and related
  resources.

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Costs of holding lots of inventory

• Interest or opportunity Costs
• Storage and Handling Costs
• Obsolescence
• Spoilage
• Insurance

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Costs of not holding sufficient inventory

• Transport costs
• Time delay costs
• Set up costs
• Downtime costs
• Bottlenecks or shortage (or stockout) costs

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Effective inventory management

• Demand rate known
• No constraints on batch or job size
• Relevant costs are known (holding and
  ordering/setup)
• Decisions for items are independent from other
  items
• No uncertainty in lead time or supply