The base for the
entire planning is the strategic business plan. Strategic business plan
incorporates all the plan of marketing, finance and production. These are high
level plans based on overall organizational perspective and devised by top
management. they span across 2 to 10 years and talk about the strategic
direction of the company.
Business Planning is
based on the strategic plan and define the objective of various functions at an
aggregate level. These are more financial oriented and address the sales,
manufacturing, finance and other activities to achieve the strategic objectives.
The horizon extend from 12 to 18 months.
Sales and Operations
Planning include the planning of the manufacturing facilities required to
support the business plan. It determines the overall level of manufacturing
output broken down by quarterly / monthly time periods and ensures the
integration between the production function and business plan. S&OP is
responsible to determine the production rates, desired inventory levels and
resource requirements for the end items / product families. Rough Cut capacity
planning at this level helps in identifying and evaluating the bottleneck
resources involved in the achieving production schedule.
Material requirement
planning drills down further the requirement of the number of manufactured and
purchased components. it is a plan for determining the production and purchase
of the various components of the end items to support S&OP. Capacity
requirement planning determines the detailed requirement of the labor and
equipment resources needed to achieve the production of components as per MRP.
