Budgeting, Forecasting and Planning In Uncertain Times

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PLANNING METHODS AND METHODOLOGIES

Over the years there have been many attempts to help organisations create better joined-up plans. This chapter will include an overview of some of these approaches and ways in which organisations can assess their planning maturity.

PLANNING: WHO, WHAT, WHEN, AND HOW

Planning is a simple concept to understand and yet can be difficult to perform. Part of the reason for this is its multi-faceted nature that, within a business context, can come in a range of types (for example, strategic, operational, financial), functions (for example, sales, logistics, production), and techniques (for example, top-down, bottom-up, driver-based). Plans include different combinations of these areas, depending on the purpose being served. As a consequence, it is easy to lose sight of what each is designed to do and organisations can end up with a mishmash of plans that have little or no connection to what they are trying to achieve.

To get a better understanding of how planning requirements evolve within an organisation, consider the following fictitious company, XYZ, Inc., as it grows into a large, multi-national concern.

Planning Within a Sole Trader

XYZ, Inc. was founded as a re-seller of ballpoint pens. The owner and workforce of four people started out by buying a small range of quality pens from different manufacturers and supplying them to a number of shops within their local area. For XYZ to grow they must ensure that their resale price is competitive with ...