Operational Control is necesary for strategy execution. Can your operations meet your strategic needs. This will ask some tough questions.

1. Business Planning and Control
First published in MHD Magazine July 2009
In any construction project, whether it be a 20 storey skyscraper or a family home,
two of the most vital elements considered are, firstly what environment will the
structure be subjected to, and secondly what is the critical foundation required to
ensure that the structure stands.
In Brief: The very same can be said for the business structure. The economic environment
will impact the business, the foundations must be secure to ensure survival. The
Business Planning challenge with a business is that being an organisation, an organism of sorts,
Control provides a internal change impacts those foundations. This can mean that while the goal posts
foundation for better may have shifted, due to the environment, so to the foundation may also be shifting,
business decision making that goal much more of a challenge. It is critical therefore to ensure that the
making. fundamentals, the foundational aspects of operational performance are maintained
at all costs.
Excessive inventory
and stock write off, An organisation with good operations planning and control will have lower inventory
poor purchasing and (both finished goods and raw materials in a manufacturing environment) and
planning practices therefore a shorter cash to cash cycle. This control over inventory will also have
and regular out of direct, bottom line benefits such as reduction in inventory obsolescence and
stock’s indicate that therefore stock write off or markdown clearance pricing.
planning control
need attention. Better inventory control also means that there are often less changes to plan due to
raw material out of stocks, which in turn reduces your unscheduled production
Better business down time. And by the way, while we are talking raw materials, having better raw
decisions now will material data means that you have better communication with suppliers and
increase your therefore better supplier relationships, this in turn can lead to more mutually
profitability for years beneficial cost savings.
to come.
Here are two simple questions that will help to identify if your organisation
needs improved control.
Question 1: Are you holding to much capital in inventory, and still having out of
stocks to the customer and/or production, do you need to expedite orders with
suppliers, are you writing off or mark down large amounts of inventory?
Question 2: Are your purchasing and planning teams using your ERP system or are
they operating off system in a spread sheeting package or other application? If they
don’t trust the planning system for their decision making, should you?
The economic conditions of the time will force organizations to review their
operations for improved cost effectiveness. The right decisions made now can be
extremely beneficial to you and all of your workforce.
Operations planning and control is the cornerstone to effective decision making,
profitability and adaptation in a rapidly changing environment.
For a free copy of my e-Book “Operations Control. A guide to delivering improved
Planning and Inventory control.” “email me at info@operationscontrol.com with the
subject “Operations e-book”
info@operationscontrol.com
Prepared by Jonathan Grigg

2. info@operationscontrol.com
Prepared by Jonathan Grigg