What Is Integrated Business Planning?

The comprehensive plan is also called the production outline. It is a general assumption for the balance between the resources and needs of the company over a long period of time. It is based on the production capacity and demand forecast of the company. A general description of the output content, output volume, labor level, inventory investment and other issues.

Comprehensive plan

The comprehensive plan does not specify the production quantity, production time, and specific work tasks of each workshop and personnel for each variety, but arranges the products, time, and personnel in the following manner:

(1) Product: According to the product's demand characteristics, processing characteristics, similarity in required personnel and equipment, etc., the products are integrated into several major series, and a comprehensive plan is formulated with the series as a unit. For example, clothing factories are divided into two series of women's clothing and children's clothing according to the characteristics of the demand of products, and bicycle factories are divided into two series of 24 and 28 models.

(2) Time: The planning period of a comprehensive plan is usually years (some

I. Analysis of the main objectives of the comprehensive plan and its contradiction

Comprehensive plan is corporate

Such a process is dynamic and continuous, and plans need to be re-examined and updated periodically, especially when new information is entered and new business opportunities arise. One of the most important basic correlations to consider is the relationship between inventory levels and production volumes. The basic formulation of this relationship is:

Inventory at the end of the period = Unstocked in the previous period + Production in the current period-Demand in the current period

For example, a paint factory has 600,000 liters of paint inventory at the end of January, and the market in February

The demand is expected to be 250,000 liters. In February, it is planned to produce 100,000 liters. The inventory at the end of February: 60 + 10-25 = 450,000 liters. As in the personnel plan, the basic relationship that needs to be grouped to determine the personnel, in the production outline, this basic relationship needs to be considered separately by product family.

Other constraints include two categories: physical constraints and policy constraints. The former refers to an organization's facility space constraints, production capacity constraints, and other issues. For example, a factory has limited training facilities, and the number of newly hired personnel during a planning period must not exceed a maximum. The equipment capacity determines the maximum monthly output. The area of the warehouse determines the upper limit of the inventory. The latter refers to the restrictions on an organization's business management policies. For example, the company stipulates that the longest backlog of orders cannot exceed a maximum, the maximum number of overtime hours in a month, the amount of external cooperation must be less than percent, and the minimum safety stock must not be low How much and so on. A comprehensive plan must meet these constraints, but it should be noted that a plan that fully meets these constraints does not mean that it is an optimal plan, because within the constraints, multiple schemes can be derived, The business results of these multiple options may be very different.

Costs must also be considered when developing a comprehensive plan. A plan is ultimately acceptable only if the costs are within acceptable limits. The costs to consider when developing a comprehensive plan include:

(1) Staff costs for regular staff.

Includes regular wages and various benefits for regular staff, such as medical insurance, labor insurance, retirement funds, paid leave, etc.

(2) Overtime costs.

Overtime pay is usually 1.5 times the normal salary, but other benefits are not considered. There are also some companies that usually pay 1.5 times overtime pay, and double overtime on Sundays and legal holidays.

(3) Inventory cost ( cost incurred in holding inventory).

It only refers to those costs that change with inventory investment, including: capital occupation costs, various storage costs (warehouse costs, storage management personnel costs, etc.), natural and unnatural loss of inventory (lost, stolen, rot, etc.), Insurance costs, etc.

(4) The cost of backlog of orders and the cost of stock-outs.

In the case of a backlog of orders, contract extension penalties may occur and the potential opportunity cost of losing customers may also occur.