In the daily operation and management of the first chain, we will encounter a variety of plans, such as our familiar sales plan, first plan, production plan, inventory plan, logistics plan, procurement plan, etc., but there is a plan, which is very important for our first chain plan management, but few people have heard his name, even if they have heard it, they may not know its exact meaning, this plan is the "master plan".
What is Master Planning?
When it comes to the "master plan", some people may think of the main production plan, but in fact, the concept of the master plan is not limited to production, it is a comprehensive plan that considers various resources related to the first in the medium term, capacity preparation, human resources, materials, storage capacity, logistics and distribution, etc., which can also be called "medium-term resource planning".
The main role of the master plan is to match and evaluate future resources and needs. It is necessary to judge whether these resources can meet the needs of the next 3 to 12 months after the sales or demand planning department gives the demand plan for the next 3 to 12 months, based on the synchronous planning of key resources such as production capacity, personnel, materials, warehousing, and logistics in the next 3 to 12 months. The main outputs are: medium-term capacity planning, medium-term shortage warning, medium-term procurement planning, medium-term inventory capacity planning, medium-term network planning, etc., which are the key links to help enterprises carry out strategic undertaking and real S&OP management.
Why do you need a master plan?
As mentioned earlier, a master plan is a plan for the evaluation and planning of future resources. Why is the master plan so important, I don't know if you remember my previous article: "An important but easily overlooked concept of plan management - the hierarchy of the plan", which said that the plan is also divided into many levels, long-term plan, medium-term plan, short-term plan, and implementation plan, and the master plan corresponds to the medium-term plan that connects the previous and the next. Because in real business operations, the more critical the resource preparation, the more sufficient lead time is required to complete it. Workers are recruited, which takes one to two months;Procurement of critical materials may take up to half a year;If additional capacity is required, it is more likely to take up to a year to achieve. If you want to not be affected in the actual business execution, then reasonable medium-term resource planning is the key prerequisite to ensure that there are no problems in short-term implementation.
Some people may say at this time that although our company does not have a master plan, such as the preparation of key materials, medium and long-term capacity addition, etc., are planned in the corresponding procurement and production departments, and they actually play the role of the master plan. In fact, this is only half true, because the master plan's plan for medium-term resources is not a single line, but an overall and comprehensive plan. For example, suppose the demand plan proposes that a large amount of A is needed in the next six months, but the production capacity prepares a large amount of B's production capacity, and the procurement finally purchases a large number of C materials, which will lead to all parties making preparations, but the demand is not effectively matched.
Some people may say that this is actually a coordination problem, and it is enough to pull several departments together for a meeting. Indeed, when the production capacity relationship and BOM structure are simple, it is true that everyone can solve these problems by meeting and coordinating, but if there are hundreds or thousands of SKUs, corresponding to multiple factories and dozens of production lines, each production line can produce different SKUs, but they intersect with each other. At the same time, there are thousands of back-end materials, and there are several layers of BOM, and there are complex substitution relationships between different materials. In such a situation, it is difficult to make accurate decisions by meeting and coordinating, and it is necessary to have a plan that can coordinate the resources of all parties and accurately calculate the fit between them, and this is the function of the master plan.
How to do a master plan?
So, how do you make a master plan?As mentioned above, as the business of enterprises grows larger, there are more and more SKUs, more and more factories, and the BOM becomes more and more complex, and the difficulty of matching different resources with each other is also increasing exponentially. What I want to recommend here is the well-known "linear programming" in operations research.
Linear programming (LP) is an important branch of operations research that has been researched earlier, developed rapidly, widely used and more mature, and it is a mathematical method to assist people in scientific management, and is widely used in military operations, economic analysis, business management and engineering technology. It provides a scientific basis for making optimal decisions by rationally using limited human, material, financial and other resources. Linear programming has an extremely high fit for scenarios related to resource allocation, but how to combine the algorithm with the actual business scenario still requires detailed model design and data collection, and it is impossible to explain it in just a few hundred words. (The pit is dug up).
In addition to the introduction of algorithms, we can also achieve from passive to active management. In the previous example, I mentioned the tangle of mismatch between actual demand and capacity preparation and procurement preparation, so at this time, as the main plan, you can put forward corresponding suggestions, that is, in addition to the satisfaction of the demand products, which products have sufficient space, so that when the sales plan is formulated, you can prepare your own sales plan based on the situation of back-end resources, and the company's resources can be used more efficiently, which is also s& What a system like OP should pursue, based on the resources at hand, make decisions about the future, rather than putting out fires everywhere in order to solve the problems of the present.
* Chain navigator.
The master plan is like navigating when we drive, the company strategy tells us the destination, the short-term plan is the road conditions in front of us, and the execution plan is to hold the steering wheel and put your foot on the accelerator. If we didn't have a master plan, we would still be able to drive to our destination, but we would certainly have to make a U-turn by taking a long detour, getting stuck in a traffic jam or even taking the wrong road. With the navigation (master plan), he can help us take into account the various situations on the previous route (various resource bottlenecks), so as to plan the most efficient route to help us reach the end.
So, if a company just wants to survive, he can do without a master plan, but if a company wants to live well, then the master plan is the core competency that he must build!