Enterprise planning system: methods and principles

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Planning is one of the most important processes that ensure the efficient operation of an enterprise. This is a management function, the essence of which is to determine the development strategy and tasks for each of the departments and structures, the implementation of which is necessary to follow the chosen strategy. When planning, not only the goals of the enterprise are determined, but also the timing, as well as methods for achieving them.

The analysis of the factors influencing the activity of the enterprise and its development is carried out. This is done in order to find and solve emerging problems in a timely manner.

The most important factors influencing the planning system at the enterprise:

1. Leadership literacy.
2. Employee qualifications.
3. Material and information base.

It is impossible to write off geographical factors, as well as factors due to the specifics of the activity. True, with a competent approach, the first three aspects can exclude the impact on the activities of the enterprise of specificconditions.

Meaning

It is worth describing in more detail the importance of an enterprise planning system.

The modern economy is a highly competitive environment. The larger the scale of an organization's activities, the more important are the decisions made by company leaders. At the small business level, a day of delay in making an important decision may not have much effect on the economic condition of the company, but in a big business, this unforgivable oversight can cost millions in losses.

The planning system at the enterprise is needed so that the decisions made have a positive impact on the development of the company, so that there are no situations in which the management of the enterprise does not know what to do.

In addition, it has long been known that in business it is easier and more effective to follow a plan than to improvise and make decisions on the go.

Methods

To build an effective enterprise development strategy, you need to have a certain set of knowledge. In particular, it is necessary to know the methods of the planning system in the enterprise.

There are six main methods:

1. Balance.
2. Normative.
3. Feasibility study.
4. Program-targeted.
5. Economic-mathematical.
6. Method of multivariate calculations.

The first three methods of the enterprise planning system will be discussed in more detail.

Balance method

The essencebalance method - drawing up various types of balances, namely:

• material (balance of fuel, building materials, equipment, etc.);
• labor (balance of labor force and working time);
• financial (balance of income and expenses in monetary terms, cash transactions, accounting parameters);
• integrated (balance of production capacity).

Based on these balances, the development strategy is planned taking into account the principles that will be described below. The balance method is included in the financial planning system at the enterprise.

Normative method

The essence of the normative method is the use of standards that are provided for almost every process occurring in the enterprise, or a parameter that characterizes the company's activities. For example:

• raw material consumption rates;
• standards for the use of equipment;
• norms of materials and fuel;
• finance standard;
• norm for work in progress.

Other parameters are also normalized. This implies the very planning system in the enterprise. The system of enterprise plans should take into account all economic indicators.

Feasibility study

This method is used in planning:

1. Realization of finished products.
2. Production costs.
3. Production programs.

In other words, the techno-economic method is used to direct and organize production and economic activities anddetermine production results.

When using this planning method, the following factors are taken into account:

1. Technical (introduction of new equipment, modernization or reconstruction of the old material base).
2. Upgrading HR.
3. Change in production volumes.
4. Inflation.

Specific factors are also taken into account. Feasibility study - a platform for operational planning. Partly makes up the system of financial planning in the enterprise. Operational coordinates the processes, terms, stages and volumes of production in the calendar plan.

From this we can conclude that the technical and economic depends heavily on the operational. The principle of unity, continuity and complexity of planning is based on this fact.

Principles

Analysis of the planning system in an enterprise is impossible without taking into account the principles of planning. The following are distinguished:

• unity;
• continuity;
• flexibility;
• participation;
• science;
• reasonableness of purpose.

It is worth clarifying what each principle is.

Principle of unity

This principle implies a systematic, integrated approach to planning. After all, an enterprise is a large organization that combines structures that are different in their purpose. It is impossible for all structures to draw up a single plan and demand its implementation.

Continuity principle

The principle of continuity states that planning is notone time process. It should always last, because the economic environment and the market are constantly changing. Plans need to be updated regularly. However, you can't change them too often, otherwise planning will be no different from improvisation.

As a result, the data on the basis of which planning is carried out must be analyzed constantly. Conclusions must be drawn at adequate (not too long and not too short) intervals.

Improvement of the planning system at the enterprise should be ongoing.

Flexibility

The principle of flexibility is closely related to the principle of continuity. It says that when planning, you need to adapt to the ever-changing market.

Those who believe that the market situation cannot change overnight are wrong. Maybe. True, a moment is only an action. It is preceded by a set of situations (prerequisites). It is this set of situations that helps plan ahead.

Drawing up an action plan, a development strategy requires taking into account all the factors influencing the economic process. These factors are changeable.

Participation principle

Organization of a planning system in an enterprise requires taking this principle into account. It is closely related to the principle of unity. According to him, all structural units of the enterprise should participate in planning.

Scientific principle

According to the principle of science, every step in planning must be scientifically justified. This is the only way to make the most effective plan. This will require a thorough analysis of the planning system in the enterprise.

At the level of a small business, the violation of this principle, although it will not benefit the enterprise, may have a slight effect on the final result of the work. Guidance's intuition can save.

In big business rely more on intuition - sign the "death warrant" of the company.

The principle of soundness of purpose

This principle states that the actions of all structures of the enterprise should pursue only one goal - the goal of the enterprise for the future, approved by the development strategy.

Plan structure

Organization of a planning system in an enterprise inevitably leads to a development plan for the company, which consists of the following items:

1. Short description.
2. Development strategy. This section contains a detailed description of the organization of production and sales of products, the minimum quality threshold that the manufactured products must meet. Also, the section should contain the types of products that are produced at the enterprise. The same item includes information on the requirements for personnel qualifications.
3. Promotion and sale of goods in the markets. This section analyzes potential sales markets, competitors, identifies the strengths and weaknesses of their own products.
4. Operation of production equipment.
5. Administrative apparatus. Contains detailed information about the management of the enterprise.
6. Financial strategy. At this pointthe financial flows passing through the enterprise are described, the profitability of the organization is estimated.
7. Risk factors. It contains detailed information about the risks that an enterprise may face in the production and sale of products.
8. Applications.

In an enterprise, each department, as a rule, knows its individual goal well and is not aware of the tasks that other structures face, although they all work to achieve the company's common global goal.

Classification of plans

There are six types of planning process:

1. By reach.
2. By content (strategic, tactical, operational).
3. By planning object.
4. By fields of activity (production, sales, research, promotion).
5. By terms (short-term, medium-term, long-term).
6. According to the degree of flexibility.

Depending on the information contained in a particular plan, plans are divided into:

• financial;
• production.

These are enterprise planning information systems. These views together form the master plan. It describes the activities of the enterprise as a whole. In turn, the system of economic planning at the enterprise is based on:

• industrial;
• strategic planning.

Specialists identify the following types of strategic planning goals:

• market (determined by marketssales);
• production (determine which technologies and equipment are best used to improve the efficiency of the enterprise);
• financial and economic (determine the sources of income, predict the level of profit for the future period);
• social (determine work with clients, reveal satisfaction with finished products).

Process

In order to plan correctly, it is worth pre-determining the following components:

• object - what the action of the subject is aimed at;
• subject;
• period;
• funds;
• technique.

Management with a development strategy implies the implementation of a cycle:

1. Analysis. Market research.
2. Planning.
3. Organization.
4. Control. The planning of the control system at the enterprise is carried out in advance.
5. Regulation.

As a result, you need to return to point number 1.

Another classification of methods

There is another classification of methods for compiling a business planning system in an enterprise. According to her, the method can be:

• balanced;
• calculation and analytical;
• economic-mathematical;
• graphic-analytical;
• network;
• program-targeted.

The balance method in this classification is no different from what is described above. Other methods are worth mentioning in more detail, although some of them arementioned in the above classification.

Calculation-analytical is used to calculate the main numerical indicators of the plan, on the basis of which the analysis of the dynamics and factors of the enterprise development is carried out. In order for the analysis to be carried out correctly, basic values are determined for the calculated parameters, in other words, “zero coordinates”, according to which changes are recorded.

The use of economic and mathematical methods allows you to create an economic model for the development of an enterprise based on the parameters calculated by the previous method. The economic-mathematical method allows the compilation of several strategies for the development of the company and the choice of the optimal one.

Graphoanalytical allows you to visualize the relationship between two economic indicators using graphing. Why is this method good? The fact that the language of graphics is the most informative language that allows you to quickly draw intermediate conclusions without cumbersome calculations.

Network is a subtype of graph-analytical. Its feature is the ability to draw up schedules for the parallel execution of work in space and time. For example, graphs made by the network method can simultaneously characterize the repair of workshop equipment, the installation of new equipment at the enterprise, and the development of the design of a new premises.

The essence of the target program is reflected in its name. This method is used in the preparation of a specific program for the development of the enterprise. For example, it takes into account the production planning system in the enterprise. This program has a specifica plan of action and activities aimed at achieving the general goal of the company. It is this goal that is fundamental when drawing up a plan.

Many of these methods are more effective when used together rather than individually. For example, you can calculate the necessary economic parameters using the calculation-analytical method, identify a model of the dependence of these parameters using the economic-mathematical method, analyze it using the graphical-analytical method, and draw up an action plan based on the findings using the program-target method. This is how an example of an enterprise planning system looks like.

Other classification

Depending on the period for which the development strategy is drawn up, planning is divided into:

• promising;
• current;
• operational production.

The essence of long-term planning is to predict the behavior of both consumers and partners, and competitors. Promising happens:

• long-term (10 to 15 years);
• medium term (3 to 5 years).

The long-term production planning system at the enterprise involves the creation of an action program using the program-target method, taking into account the update of market information. The goals and objectives described in the long-term plan are specified in the medium-term planning. In the medium term, the desired change in the economic performance of the enterprise, as well as methods for achieving it, are described in detail.

In fact, current planning is a subtype of medium-termperspective. The current one is compiled for a year. This document further refines the indicators and parameters described in the medium-term type of forward plan.

During current scheduling, tasks are divided into:

• factory (large-scale tasks for the enterprise);
• shop (mid-level tasks for enterprise structures aimed at achieving a large-scale goal);
• brigade (small tasks for structures subordinate to shops and services, aimed at achieving shop tasks).

Operational production - a subtype of the current one. It allows you to draw up a specific action plan to achieve annual (current) goals. Operational and production planning is divided into:

• intershop;
• intrashop;
• dispatching.

The lowest level of planning in the enterprise is shift-daily.

The three types of planning described above are interconnected and cannot be taken into account separately. They form a system of goals and objectives. In addition to the prospective, two more types of planning are used:

• strategic;
• tactical.

Strategic allows you to create a list of tasks designed to improve the efficiency of the company, defines the mission of the enterprise. Covers the long term.

Tactical affects the short and medium term. It is aimed at achieving the goals set during strategic planning.

According to the mandatory implementation of the plan, they allocate:

• directive;
• indicative planning.

Directive excludes any initiative in the enterprise. There is a plan of action and tasks - it must be fulfilled. It was widely used in the socialist countries in the last century, but now, when the market economy prevails over the planned economy, directive planning is more often used in the preparation of only current plans.

Indicative is the opposite of directive. Indicative planning does not set specific tasks. Only certain economic parameters are determined that the enterprise must achieve. How this will be achieved by the structure of the company is not clearly specified. Only the result is important, but not the method of achieving it. This type of planning is relevant in the formation of long-term tasks.

Classification by R. L. Akoff

Scientist Russell Ackoff formed his own classification of planning types, which is now widely used in foreign practice. A similar classification highlights:

1. Reactive planning. Based on analysis of previous experience.
2. Inactive. Based on the preparation of an enterprise development plan based on current economic indicators.
3. Preactive. Based on development decisions based on economic forecasts.
4. Interactive planning. Based on the adoption of a strategic development program, taking into account previous, current and future economic performance.

The last type, although the most difficult to calculate(it is necessary to take into account three time intervals at once), is the most effective.

Result

Thus, planning is one of the most important processes in an enterprise, allowing it to develop effectively and achieve ambitious economic indicators. The role of planning is difficult to overestimate. What is the planning system at the enterprise, so it will develop.

Without a specific action strategy, it is difficult for both small and large businesses to work: a small one will not be able to grow and improve its economic performance, and a large one may even go bankrupt due to untimely decisions on actions not provided for by the plan.

There are a large number of planning methods, all of them are fundamentally different from each other, but in general they form a single system that allows you to draw up accurate and effective action plans, development strategies. For example, the program-target method has little in common with the feasibility study, but the first method does not work without the second.

In addition, there are many types of planning. All of them are based on six fundamental principles. The planning process, as well as the overall structure of the final plan, has long been defined. They are also listed in this article.

Planning is an indispensable stage in the development of an enterprise that never stops, because you constantly need to take into account changing market conditions. Improving the planning system in the enterprise should never stop.