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Long-term planning

Assuming that a business has established the need for long-range planning and taken a decision to introduce it, management will then have to decide how to approach the task. A normal procedure would be to work through the following steps:

Set up the planning organization

The contractor will probably want to maintain close contact with the development of the plans without getting too involved in the detail. A way of achieving this is to appoint a small working team, to include representation from the marketing, production and financial sides of the business. This team will decide what needs to be done, prepare the first set of plans, and keep the Board informed through regular meetings. Later, when the procedure has settled down, a decision can betaken whether to set up a separate department to carry out the work on a continuous basis, or whether to carry on with the part-time services of the working team.

Decide on the range and scope of the plans

Industries that are highly mechanized or making very sophisticated products, or working to long term contracts, will clearly need to plan ahead for a considerable number of years. The majority of firms engaged in relatively simple manufacturing operations will find it beneficial to plan ahead for five years, although during the introductory stage it may be sensible to start with three and extend to five when experience has been gained. Companies with experience of annual budgeting will know that the budgets will be based on marketing and production plans that specify what volume of each product will be made and sold and at what unit cost and price. With long-range planning it is obviously not possible to do this for a period say five years ahead, since many of the products that will be sold then are at present non-existent. Hence the only way of quantifying the longer-range plans is usually in financial terms, and at the same time it is obviously important to know what financial resources will be needed to develop these plans. In other words, there is a vital need to take a corporate view and look at all aspects of the business, its activities and resources. It is for this reason that some people prefer to talk about 'corporate planning'.

Decide on the objective

There are two ways in which long-range plans may be drawn up. First, the contractor might decide that what was needed was a long-range forecast of the growth of the business, and they would ask the planners to examine existing trends of sales, costs and profits, capital employed etc. and then make forecasts of the corresponding figures in say five years time. These forecasts would be informative, but the Board would to some extent be missing out on one of the opportunities provided by the technique of assessing the gap between what may happen and what could happen. With the second approach, the contractor itself examines the trends disclosed by the planners' investigations into current activities, and then decides what the objectives should be. These objectives may be expressed in terms of market share, sales turnover, production capacity, operating profit, return on capital, or earnings per share. At the same time, the Board must give some guidance as to their views about the strategies and policies to be followed in attaining these objectives. They may state that they see no reason to change existing patterns, or they may specify changes in certain directions. In this context it will be important for the directors to be clearly aware of the character of business forecasting: this is a process of evaluation of facts, factors, influences and probabilities, with a view to arriving at a rational and reasoned judgment of expected objectives. Forecasting is a process a long way removed from 'prophecy'.

Assess the gap

Assuming that the contractor has adopted the second approach outlined above, the planning team must now prepare their forecasts of probable results during each of the planning years, taking into account the Board's decisions on strategies and policies, and any expected changes in external conditions. The usual starting point for these forecasts is an inspection of the trends established in recent years and a forward projection of these trends on the assumption that policies remain unchanged. Corrections are then superimposed on these projections to reflect the estimated effect of expected changes. This projection technique is particularly appropriate when applied to the forecasting of future sales. Life would be easy for planners if it were possible to do the same with profits, which are after all the main end product of the whole planning process. Unfortunately any attempt to predict future profits by straight line projection is likely to be so wide of the mark that the whole exercise is pointless. This is because profits are residual in nature and are determined by matching revenue with costs, and quite small percentage changes in each can have a major impact on profits perhaps turning a profit into a loss. This means that no short cuts are possible, and before the forecast profit can be determined, planners must first make their forecasts for all the factors likely to affect these profits. When the various forecasts of costs are being prepared, planning teams should be able to obtain help from studies into cost behavior that are frequently carried out in support of annual budgeting procedures or of capital expenditure proposals. They will certainly need to have an accurate knowledge of the limitations imposed by factory capacities. As mentioned above, long-range plans should be fully comprehensive, and in addition to forecasting the sales and profit figures, forecasts should be made for cash flow, capital expenditure and capital employed. When all these forecasts have been prepared, they are compared with the Board's objectives and the various 'gaps' assessed by deduction.

Quantify the uncertainty

It is evident that the farther ahead one plans, the greater the likelihood of actual results differing from forecast. Many companies find it useful to quantify the probable range of uncertainty. A convenient way of doing this is to include upper and lower limits in the long-range plans, with the target figures in between:

Operating profit Year 1 2 3 4 5

Maximum 105 127 135 165 320

Target 100 110 125 150 200

Minimum 90 97 105 128 160

Review the plans

The planning team has now prepared forecasts covering all the main factors described above, with upper and lower limits for the key figures of sales and profits. The Board must now decide whether to accept these figures as the official long-range plans of the company, even if they differ from their original objectives. If there are gaps which they feel are unacceptable, then functional management will be called in to study the problems further and to suggest ways of closing the gaps. Fortunately the problems are being studied several years before they actually arise, and this of course is one of the major

advantages of introducing long-range planning.

Communicate the plans

After these further studies have been completed and decisions taken on any necessary amendments to the plans, the plans are approved by the contractor and communicated to those managers who will be concerned with their implementation. As the years pass, it will gradually be discovered whether the original set of long-range plans were realistic. Continuous comparison of actual with planned results and investigations into differences will all help in making future plans more reliable. Once a year, at least, the forward plans should be reviewed and revised where necessary. There is no point in trying to stick to a plan that has become outdated due to a major change in external conditions.

SHORT TERM PLANNING

Period of time covered

Short term programming can cover a period of four to six weeks or may cover a stage of the work. The programme considered here will cover a period of six weeks. A new programme is drawn up every fourth week, thus giving a two week overlap and allowing a review to be made of the work outstanding from the previous month; any work behind schedule can then be included in the current programme.

Purpose

The purpose of short term programming is to ensure that work proceeds in accordance with the overall programme. The overall programme is thus converted into a working schedule and must be updated regularly, whilst a review is simultaneously made of all requirements by checking schedules.

Time of preparation

The most suitable time for preparation of the programme is after the monthly planning meeting, which is in turn best held immediately after the architect's monthly meeting. In this way account can be taken of any alterations or variations which are necessary.

Originator of programme

The programme should be originated by the site manager, if necessary with

the assistance of a projects manager and a planning engineer. The co-operation of foremen and sub-contractors should be obtained by getting them involved and keeping them informed. They would be present at the monthly site meeting to give their point of view and agree the general plan of action.

Degree of detail necessary

The operations in the overall programme will have to be broken down to show each element of work to be completed, e.g. the reinforced concrete frame - which was one operation on the overall programme - will be broken down into the elements of work on each floor:

• Reinforcement in columns
• Formwork to columns
• Concrete to columns
• Formwork to beams and slab
• Reinforcement to beams and slab
• Concrete to beams and slab.

Basis of calculations

The basis of calculations at this stage must be the operational records from previous contracts. There should be an integrated cost control/ bonusing / planning and surveying system which will provide the basic information for all departments. The expected outputs for bonus operations should be used The bill of quantities cannot be used in calculating time periods for these detailed operations as the outputs used to price the bill are averages and do not take into account the conditions of work in individual operations.

Example1:

The six-weekly programme

The period covered is the first six weeks of the contract

Procedure for programming

1. Break down the operations in the overall programme into more detailed operations as shown in the six-weekly programme, taking care to include all operations. Any preparatory work necessary must be included.

2. Fill in plant-hours and/or productive man-hours for the detailed operations.

3. Decide on the number of operatives and plant necessary and calculate the time required, plotting each operation on the programme as it is considered. The aim is to provide continuity of work and to meet the targets set in the overall programme.

Labour requirements

These can now be obtained from the six-weekly programme by adding up the labor required each day. Extra laborers necessary for off-loading, etc. are not included here.

Plant requirements

These can also be obtained from the six-weekly programme.

Other requirements

Requirements for details, nominations, materials, etc. can also be obtained from this programme and a check made with the schedules originated at the overall programming stage to ensure that all requirements will be available when required.

General notes on six-weekly programme

1) Water for works and drinking

During the first week this can be obtained from a tap on the works near to the site. After the first week, it will be laid on.

2) Tower crane base and all hard standings

Ready mixed concrete will be used for pouring the tower crane base and hard standings.

3) Cutting, bending and fixing steel.

The steelfixers' time includes cutting and bending. Fixing of steel proceeds after rough formwork in bases and slab, with steel in bases and trenches being fixed first to allow concreting to proceed.

Examples 2:

Weekly Planning

Purpose

The purpose of weekly programming is to ensure that the six-weekly pro­gramme is effectively carried out. It is used as a basis for operational instructions, for communicating the plan to the trades foremen, gangers, and operatives, and to help in co-ordinating the requirements of different sites.

Time for preparation

It should be prepared after a weekly site meeting at which gangers and foremen are present, together with others who will be involved in the following week's work.

Originator of programme

The programme should be originated by the site manager with the assistance of a planning engineer if necessary. The work should be discussed with foremen and sub-contractors when they are affected.

Degree of detail necessary

Considerable detail is necessary here, so the programme will show days and sometimes even hours.

Basis of calculations

As with the six-weekly programme, the basis of calculations should be operational records. Since weekly programming is tied up very much with the bonus system, the expected outputs for bonus purposes are probably the best basis and can be evolved from work study synthetics from the work Study department. Information from bonus feed-back may be used to up­date this programme.

Procedure for programming

1. List all the operations to be carried out during the next week in the order of starting time.

2. Insert the quantity of men and plant required and (taking into account the work content) enter the time required on the programme, providing continuity of work wherever possible.

Labour requirements

The labour requirements are entered below the weekly programme and this will assist in co-ordinating the requirements of different sites.

Plant and other requirements

Plant and other requirements should now be finally checked to ensure that they will be available when required.

General notes on weekly programme

• Erect reinforcement to columns

his operation is the completion of the fixing of the column cages which were started the previous week. The crane would assist as necessary in lifting cages into position.

• Erect formwork to columns

the carpenters follow the steel fixers to complete the column formwork started the previous week.

• Pour concrete to columns

The crane gang follows the carpenters erecting column forms. Crane and gang leave this operation for short periods to lift column cages.

• Strip formwork to columns

Stripping of the columns which were poured first can start as soon as the last column forms are erected. This will leave plenty of time for concrete to harden.

• Prepare reinforcement to beams and floors

The steel fixers cut, bend, and fabricate steel for floors after reinforcement to columns has been erected.

• Erect formwork to beams and floor slab

The carpenters move onto this after slipping columns; crane will assist by lifting formwork panels into position. The floor will be cast in two equal sections to allow earlier release of some of the formwork.

• Fix reinforcement to beams and floors

The steel fixers follow carpenters on floors, fixing steel. The crane is used to lift beam cages as necessary in accordance with the programme for the crane.

• Erect scaffolding Scaffolders

erect scaffold to the outside of the building as work proceeds.

• Crane and operator

The tower crane and operator have been omitted from the weekly pro­gramme as a separate programme for the crane will be drawn up each day.

Communicating the programme

There are many methods of communicating the programme to trades fore­men, gangers and operatives, including pictorial diagrams, sequence studies, simplified bar charts, and work lists; the method chosen will depend upon the type of work being undertaken. The operation and location must be clearly defined. On small projects the work of several gangs can be shown on one sheet or diagram, but on large projects a separate sheet or diagram will be necessary for each trade or gang. The weekly site meetings are of great assistance in communicating a programme.

Sequence studies

The sequence study should be adhered to when drawing up programme on site.

Simplified bar chart

A simplified bar chart will be used to communicate the weekly programme for the amenity centre and office block. The work of each trade or gang is set down on one bar line, and the chart is read in conjunction with an outline layout drawing which can be used for each floor. The plan is referenced so that the extent of work to be carried out in the week can be clearly shown, foremen and gangers being given a copy of both the chart and the diagrams.

CONTROL OF PROGRESS ON PROJECTS

Introduction

Control is complementary to planning; therefore progressing is complementary to programming. Control involves comparing, at regular intervals, the actual achievement with the plans and then taking any necessary corrective action to bring things back on schedule.

Use of meetings

The monthly and weekly meetings mentioned earlier in this chapter are invaluable in helping to control progress. Work which is not proceeding as planned will receive particular attention, and explanations will be required where sufficient progress is not being achieved.