Horizon S/A: Resolving Production & Distribution Challenges
Horizon S/A: A Case Study in Operational Planning
Marcelo Pereira’s Core Concern at Horizon S/A
What is the primary concern of Marcelo Pereira, Sales and Distribution Manager at Horizon S/A?
Non-compliance with requests for distribution services for regions under his responsibility.
Why Affiliates Didn’t Receive Requested Amounts
Marcelo Pereira, needing to understand why affiliates did not receive the requested amounts from the plant, receives the following information from the plant manager:
The main reason is a lack of raw material.
Inquiring About Manufacturing Planning
Upon arriving at Organization Horizonte S/A, and anxious to understand the problems afflicting it, Marcelo Pereira approaches the plant manager once more, asking:
How is the manufacturing plant’s production planning structured?
Plant Manager’s Response on Planning
In response to Marcelo Pereira’s concerns, the plant manager reports:
Production schedules are prepared based on projected sales from affiliates for the following month, with these projections received by the last day of each month.
Unconvinced: Recent Production Issues
Analyzing the plant manager’s responses, Marcelo Pereira remains unconvinced and questions the events of the last three months, receiving this answer:
Sales estimates and subsequent actual sales have consistently exceeded our production capacity.
Increasing Production Capacity: The Sausage Sector
Marcelo begins to understand the difficulties in fulfilling service requests to affiliates. Continuing his dialogue with the plant manager, he asks, “But, how long does it take to increase the productive capacity of this sector that makes the sausages?” The manager responds:
A minimum of 240 days, as communicated electronically by the director requesting the industrial investment.
Forecasting Demand and Capacity Planning
More pointedly in his inquiry, Marcelo Pereira asks the plant manager, “Who, eight months ago, was trying to predict demand for this 8-month horizon, anticipating the current bottleneck? That is, who is, for example, now making predictions for the ’embedded’ family and other families for at least eight months in advance to know whether it is time to trigger the process of increasing capacity?” Within this questioning, the plant manager vents:
“Nobody, I think.”
Identifying the Core Problem: Lack of Resources
Finally, Marcelo realizes that Horizon lacked the resources for “Predicting aggregate volumes, planning necessary production levels and inventories, calculating the resources needed to maintain production, and initiating, if necessary, actions to obtain resources to meet demand.” Marcelo felt the lack of:
A master plan of operations.
Understanding Decision-Making Inertia
When we talk about decision-making inertia, we are referring to:
Decisions made in advance.
Defining the Planning Horizon
The length of time over which the future has an interest in developing a vision. This text expresses:
Planning horizon.
Short-Term Planning Inertia
Short-term decision-making inertia portrays:
A short-term planning horizon.
Re-planning Cycle and Schedule Reframing
What is a concern when the army’s re-planning cycle occurs?
It creates a reframing of the schedule.
Ancora Ltda. Shipyards: Fortnightly/Monthly Re-planning
Why do Ancora Ltda. Shipyards opt for re-planning fortnightly or even monthly?
They have a relatively stable manufacturing environment.
The Essence of Planning: Present, Future, and Decisions
Planning is to understand the joint consideration of the present situation and the future vision of organizations that influence decisions taken in order to achieve certain goals in the future. The text shows us that:
Understanding the facts in a current situation, as well as having a future vision of the company, allows us to make decisions that influence its future.
Planning: Designing the Future
Planning is designing the future, unlike the past, for reasons beyond our control. This implies that:
It requires accurate knowledge about what happens day-to-day within the organization.
Key Focus Areas in the Planning Process
In preparing the planning process, special care should be addressed to the concept of the present situation, the vision of the future goals that the company is seeking, and understanding how these elements affect the decisions to be taken today. The text conveys that:
The present situation, the vision of the future, and the company’s goals should be the priority focus for understanding current decisions.
Dynamic Planning: Evolving Vision
The planner cannot be static; they must always evolve their vision over the coming years so that the future time horizon over which to develop the vision remains constant. This process is called:
Scrolling.
Sequential Steps in the Planning Process
The steps involved in the dynamics of the planning process, in their sequence, are as follows:
- Survey of the present situation
- Development and recognition of the future vision
- Joint processing of the present situation and future vision
- Decision-making
- Management
- Implementation of plans
- Control