Corporate Planning Manish Maheswari 140

7/29/2019 Corporate Planning Manish Maheswari 140

1/29

Presented by : Manish Maheswari (140)


2/29

Corporate plan is a course of action & planning isthe mental exercise/procedure in developingand formulating a course of action. A managerialplan deals with future. It is concern with futureaction directed towards goal. Managerial

planning is the mental process involved informulation of an intelligent scheme of actionsdesigned to accomplish a specific objective.Planning is more important of future actionsbecause of the added uncertainty of future.

Uncertainty adds confusion and confusion needsplanning to achieve orders forecasting futureevents is a game of educated guessing and theextent to which the uncertainty of the future is/can be reduced is the indicator of effectivemanagerial planning or accuracy of forecasting.


3/29

Corporate planning is the process of deciding theoverall objective of the company as a whole &selecting the ways and means of achieving theseobjectives.

It defines that what the company ought to be andhow it can achieve the desired state.

It involves an analyses of the companys environmentto identify the opportunities & threats it is likely toface in future and appraisal of its strength and

weaknesses. So as to create an appropriate match.This process helps the organization look outwards aswell as inwards. It is this concentration onrelationships of the company with its environmentwhich distinguish corporate planning from othermanagerial processes.


4/29

The process is systematic in approach integratesthe activity of the entire org. , future oriented,continuous and ongoing.

It includes organizing, motivating, co-ordinatingand controlling.

Corporate planning involves commitment ofresources for the period that can be clearlylooked into. This depends upon the nature of thecompany business. e.g garment industry.

To that extent long range planning becomes apart of corporate planning. Generally long rangeplanning deals with present product in presentmarket while corporate deals with not only inpresent product and present market but alsonew products in present and new market


5/29

What the company ought to be ?

How it can achieve the desired state ?

Appraisal of its SWOT .

Helps in organising, motivating, co-ordinatingplan and controlling .


6/29

It deals with present products in presentmarkets .

Long term planning refers to themanagement processes in an organisationthrough which the future impact of change isdetermined and current decisions are madeto reach a designed future .

It may be defined as determining themissions and long term objectives of anorganisation and policies necessary forachieving the same .


7/29

A co. decides a sales growth goal of 25 % per

year.( that is by 200 % in 6 years ).

Strategies Available

Introduction of new products Acquisition of other Companies

Once acquisition is chosen as a strategy

acquiring a company becomes objective.


8/29

Strategy planning -

It may be defined as determining the

mission and long term objective of an org. and thepolicy is necessary for achieving the same.

Mission statement

Our Business is service

Produce Fabricated steel shapes and forms of

construction markets

Profit, Growth and Excellence

To be a Honest Company putting out dependablestandard drugs at low prices


9/29

Capacity of a plant depends upon mainly on

these factors :

Sales Forecast

Technology usedLife Cycle of the product

Design variations of the product

Level of competition

Import-Export policiesLegal aspects

Investment Constraints


10/29

A. Design Capacity : It is basically theoritical

concept and takes into consideration the

following :

No idle time No break-down

Good quality of Raw Material

No power failure

Efficiency of workers Optimum tool set-up


11/29

B. Effective Capacity : Basically it is the

effective capacity of the plant . It means

the standard capacity of the plant . Its

characteristics are : Normal capacity of the plant

Achievable by the organisation


12/29

C. Actual Capacity : It is something about the

actual level upon which the firm is operating

.


13/29

New Project stage : Long term capacity

planning stage .

Expansion stage

Capacity balancing stage


14/29

Capacity Factors

Sales forecast

Technology used and chances of

obsolescence

o Indigenous v/s Imported

o Manual, Semi-auto v/s Automated

Life cycle of the product

Design variation of the product


15/29

Level of competitiono Demand

o Profitability

Import- Export polocies

Legalo SSI

o Cottage

o Mediom

o Large scale

Investment Constraints


16/29

Design

(Theoretical)

No ideal time

No break- down

RM of goodquality

No power failure

Skilled workmanused

Optimum toolsetup

Effective(Standard,Normal)

Licensedcapacity

Installedcapacity

Actual

(Operating)

Actualproduction

Achievedcapacity


17/29

Capacity utilization = Actual capacity

Designed capacity


18/29

Industrial Product

Consumer durable

Consumer


19/29

introduction growth maturity/

saturationdecline

Time Span

SA

LES


20/29

New Project Stage---- long term capacity

planning

Expansion stage / Diversification stage

Capacity balancing requires identifyingcapacity gaps

To meet legal rights for balance sheet u/s

211 company act 1956.

For cost Audit report u/s 233b of companyact.

Cost Estimation


21/29

STCP- To meet immediate increase or

decrease requirements.

Strategies for Short Term Capacity Addition

Manufacturing more than requirements duringoffseason / slack season to create buffer stocks

Subcontract

Overtime working

Hiring of certain facilities / subletting Hiring/Firing of manpower for economization


22/29

It depends upon :

Design Secrecy

Cost of production (In-house vs Sub-contracting)

Spare capacity availableIncremental cost of production


23/29

Capacity balancing

Multi-shift work

Rationalization of product mix

Up gradation of technology Renovation

Expansion

Diversification


24/29

Question 1. M/s Indian furnace ltd wants toexpend by adding 1 tonne capacity furnaces

production process requires 30 mins of furnace time

per 1 tonne load including loading and unloadingtime. If the plant efficiency is 50 % and furnace is

utilized for 80 % due to flow restriction, determine

the no of furnace required for processing 16 tonnes

of load per 8 hour shift. What will be the the idealcapacity avaliable?

Problems on CapacityPlanning


25/29

Solution

Required system capacity = 16 tonne/8 hour @ 100 %

(n)

Taking plant (n) = 16/0.5= 32 tonnes per 8

hrs

Output/ furnace = 1 tonne @ 100% (n) per 30 mts

= 2 tonns/ hr @ 100 % (n)

= 2 x 0.80 = 1.6 tonne/hr

= 1.6 x 8 = 12.8 tonne/hr

Hence No. of furnace required = 32/ 12.8 = 2.5 or 3

approx (Ans)


26/29

Question 2. manufacturing process of acomponent comprises of 5 operation on 5 different

machines. calculate the num of machines required

for each of their operations for meeting annual

production target of 39000 units. Assume 40

working/ week. Process time for each operation are

given below after adjusting for labor efficiency and

other delays:

Opn 1 2 3 4 5Time/

unit(hrs)0.09

5

0.200 0.157 0.098 0.100


27/29

Sollution- Machines required

Option 1 = 39000 x 0.95 = 1.78 or 2 approx

52 x 40


52 x 40


52 x 40 Option 4 = 39000 x 0.098 = 1.83 or 2 approx

52 x 40


52 x 40


28/29

Question 3. - A cycle unit owner plans to install

automatic plating machines so as to produce 320cycles/day. Each machines will cost the company Rs

50,000 production engineer estimates that he will

require 98 hrs to plate 320 cycles using the planned

m/c. It is also estimated that there will be 2 %production loss by way of scrap during the plating

process. If the operator works on an production(n)

of 80%, how many machines will be required to

meet the planned capacity on 2 shift basis and the

investment required ?


29/29

Solution Hours req for production of 320 cycle = 98 hrs

Scrap = 2 %

i;e for 98 cycle actual time required is that of = 100 hrs

for 1 cycle actual time required is = 100/(100-2)

Gross hours required for 320 cycle = 98 = 100 hrs

{100/(100-2)}Total operation hrs req. = 100 /0.8

= 125 hrs

No. of hrs available/ (m/c) / days on 2 shifts = 16

No. of m/ c required = 125 /16 = 7.8 or approx 8

Hence Investment req. = 8 x 50000 = 400000 Ans

Documents

Corporate Planning Manish Maheswari 140