Planning Processes 1 Control
Control and Planning Processes
Supply chain management focuses on the monitoring and running of various types of business activities to make all processes and operations effective. It comprises the development of schedules, plans, and resources to deliver enough materials to support efficient operation (Chopra & Meindl, 2007). Consequently, the planning and control processes focus on the potential of a combination of operations to deliver services and products in accordance with demands of customers. Control also concerns numerous variables to support the change of procedure and combine all necessary resources. To make efficient adjustments to definite elements, it is important to pay significant attention to materials and equipment. Such approach will allow eliminating shortcomings and gaining extra credibility of clients in the long term (Chopra & Meindl, 2007). Thus, the processes of control and planning analyzed basing on the Starbucks Company are elements crucial for effective supply chain management that is a core of successful business running, and the respective insufficient operation can significantly affect the company because of failing to meet interests of clients.
Definition of Planning and Control and the Difference between Them
Planning and control are based on the reconciliation between the requirements of the market and delivered resources. Such activities support procedures, decisions, and systems that induce the coordination of both supply and demand (Jonsson, 2008). The main goal is to establish connection between the latter to raise the effectiveness of operations and to produce products and services that completely correspond to demands of customers (Chopra & Meindl, 2007). A good example is Starbucks that is a very big and prosperous coffeehouse company. It strongly orients on the needs of clients and tries to catch changes in their mood and consequently make appropriate strategic progress. For example, not long time ago, the company decided to enter the Chinese market. Performing the analysis of the needs of clients, it selected specific Chinese tastes of tea drinks to attract their attention (Blokhin, 2015). Besides, the company elaborated several additional strategies concerning changing needs and moods of customers during different seasons and holidays. Such approach could help to keep the interest of buyers and gain more profits. Thus, it developed an effective plan to connect and control supply and demand.
Despite numerous common aspects, control and planning have some differences. The latter is the formalization of planned future events. However, a plan does not guarantee that the event will happen (Jonsson, 2008). Customers very often change their minds and desires. Besides, there is a high possibility of the occurrence of additional problems during the manufacturing process, for example, a delay in the supply of necessary equipment, its breakage, or illnesses of the staff (Jonsson, 2008). Control in its turn helps to cope with unexpected changes. Control means an intervention into the plan to change and improve it. Consequently, it makes various adjustments to achieve set goals.
Significance of Planning and Control
The control and planning processes are one of the most important aspects of supply chain management. They play a crucial role in the coordination of the flow of necessary equipment and information between suppliers and customers, and it helps to identify the product value stream. Such approach is an important element of global tactical, operational, and strategic planning in the business of Starbucks (Jonsson, 2008). It coordinates the flow of materials, effective work performance, and the quality of necessary equipment to meet expectations of customers. The purpose of controlling and planning is reaching the harmony between sales of products and needs of customers.
The Application of the Control and Planning Processes to Starbucks
Manufacturing Planning and Control
The application of the control and planning processes by Starbucks should be regarded both in complex and separately. The first significant aspect that should be analyzed is manufacturing planning and control (MPC) (Chopra & Meindl, 2007). Its main task is effective adjustment of material flow, management of equipment, and control of the correspondence of employees work to demands of customers (Jonsson, 2008). The process helps to gain information, which will support managers in making an efficient decision that is an important aspect for both local and international companies.
An important stage of MPC is collecting and summarizing physical and financial implications of activities at the manufacturing site. Such tactic establishes the successful direction of the company (Chopra & Meindl, 2007). The manufacturing planning and control process is also strongly oriented on source materials outside of the organization. At this stage, the procurement of necessary equipment with the appropriate level of quality is an important aspect to satisfy clients (Jonsson, 2008). The management team should take into consideration a high possibility of changing customers expectations, conditions of competition, capabilities of suppliers, and needs of Starbucks. It is important to remember that contract manufacturing and outsourcing can negatively affect the MPC system (Chopra & Meindl, 2007). Consequently, in case the company wants to take an appropriate place on the market, it should keep the latter matching evolving requirements, ensure that its activities correspond to each other, and focus on its strategy.
Sales and Operations Planning
Sales and operations planning (SOP) is another significant element of control and planning application (Chopra & Meindl, 2007). It provides the ground for the efficient operation of the company, focusing on managing resources to achieve strategic goals. There are four significant elements of SOP: supply, demand, mix, and volume. Thus, to reach success, Starbucks should keep balance between materials required by customers and their supply to them. Volume concerns the number of products that people need for the complete satisfaction of their needs (Kumar, Mani, & Devraj, 2014). Mix refers to an appropriate decision on what products will be more profitable to manufacture. The development of SOP is a very crucial aspect for Starbucks because it will help to draw a general picture and apply MPC effectively (Chopra & Meindl, 2007). The management team of the company should understand that a significant result can be gained in case of a deep understanding of the SOP process by the company (Chopra & Meindl, 2007). Its key issue is the right identification of necessary stability of the plan and when it should be changed.
Companies very often consider MPC in combination with planning or control of materials and capacities. The main objective of the capacity planning technique is the evaluation of capacity requirements (Kumar et al., 2014). Another objective is monitoring its efficient execution. To support a prosperous position on the market, the company should also work on resource planning that is closely connected with the capacity planning aspect. In case Starbucks wants to develop a more detailed capacity plan, it should apply the technique of capacity requirement planning (CRP) (Chopra & Meindl, 2007). Its crucial aspect is maintaining correspondence between the capacity needed for the execution of the materials provision plan and the one for the support of plan execution. Starbucks should also focus on finite loading, being one of the capacity planning procedures (Kumar et al., 2014). There is a wide range of software systems developed by vendors that can perform this function. It will be appropriate to apply the input and output analysis that will help to monitor the actual consumption of capacity during the development of an explicit material plan (Kumar et al., 2014). Such approach can help the company to identify the necessity to update the capacity plan and correct scheduling factors applied to the system of capacity planning.
Possible Problems That Can Face Starbucks
The organization of efficient planning and control requires a thorough analysis because of a high possibility of facing obstacles (Kumar et al., 2014). The most significant problems that influence the effective execution of tasks and reaching the goal of production planning and control are determined basing on investigations by experts and comprise:
The improper determination of clients needs regarding assortments of products and their terms of delivery that may impede the development of an effective forecast (Jonsson, 2008);
The absence of coordination or insufficiency of the information flow between the company and the client and between the control process and planning (Kumar et al., 2014);
The inappropriate horizontal and vertical integration of specific process actions into the whole stream of values (Kumar et al., 2014);
Improperly organized planning of the environment and the mismatching between the control strategy, production planning, and the planning environment (Jonsson, 2008);
High frequency of changes in clients demand that causes an increase in variability and raises the demand for materials and funds. Such issue can also cause the time gap between raising the demand for resources and the moment when they become available (Kumar et al., 2014);
Changing dynamics in the market (Jonsson, 2008);
Frequent fluctuations in resources applied during the manufacturing process causing its instability (Kumar et al., 2014).
A great number of possible problems call for appropriate recommendations.
The issues mentioned above occur because of disorder in information flow and actions during the cooperation with customers, selection of materials, and the analysis of resources that exist at the market (Packowski, 2014). Thus, these processes should efficiently integrate the producing process, production planning, and appropriate control (Jonsson, 2008). The failure to do this causes the mismatch between manufacturing, demands of customers, and control and planning processes. Consequently, it decreases the satisfaction of customers and the effectiveness of the production process (Kumar et al., 2014). To minimize the negative influence of disturbances and increase customers satisfaction, it is important to improve production control and planning constantly. It will be appropriate to take the following actions:
Being oriented more on the improvement of the production system (Kumar et al., 2014);
Raising the control of information and the correspondence of materials flow with the principles of lean and pull management (Jonsson, 2008);
Setting the goal to improve flexibility and compliance.
Controlling and planning processes in accordance with norms allow increasing the output in the production system and setting the limit of inventory costs and expenses for operations (Packowski, 2014). Experts have also noticed that the application of artificial intelligence in the form of bioalgorithms, fuzzy logic, or an expert system in all fields of production planning and control raises management knowledge in the appropriate area and improves the realization and flexibility of products.
Another aspect crucial for the development of Starbucks is using integrated planning and control (IPC). Such process supports linking companys internal processes. The proper application of integrated planning and control improves customer service, financial aspects, and operational performance (Jonsson, 2008). Experts also advice to develop MPC through periodical auditing that involves comparing responses of the system to requirements of the market. The audit must not only focus on the used system, but also on the training of people to match objectives (Packowski, 2014). Effective MPC can passively contribute to competitive performance through the reduction of costs and the provision of a higher level of responsiveness to market demands.
Another significant step for the improvement of the processes of planning and control is monitoring and assessing the production capacity. It will be appropriate to calculate the production capacity of the company and document it (Packowski, 2014). Managers and other employees should have access to such information to keep track of the process to achieve a good result. The responsible management team should regularly measure and adjust limits in accordance with business conditions.
The process of control and planning is one of the most significant elements of supply chain management. Production control and planning plays a crucial role in the coordination of the flow of necessary equipment and information between suppliers and customers that will help to identify the product value stream. Its purpose is setting the harmony between sales of products and provided services focusing on needs of customers. However, there is a great range of problems that can face Starbucks during the development of the planning and control processes. The most widespread among them are the improper determination of clients needs regarding assortments of products and their terms of delivery that may impede the development of an effective forecast and cause the mismatch between the control strategy, production planning, and the planning environment. To overcome these barriers, it is important to control the improvement of the production system. A crucial aspect is constant monitoring of the flow of information and materials and their correspondence with the principles of lean and pull management. Starbucks should pay significant attention to the control of production activity because it shows flaws within non-transparent areas. It is important for the company to control such processes because in case of the insufficient capacity, any of control systems will not be able to reduce backlogs, raise the efficiency of output, and improve delivery performance.