ninth edition STEPHEN P. ROBBINS PowerPoint Presentation by Charlie Cook The University of West Alabama MARY COULTER © 2007 Prentice Hall, Inc. All rights reserved. Planning Tools and Techniques Chapter 9

© 2007 Prentice Hall, Inc. All rights reserved.7–2 Assessing the Environment ____________________________________________  The screening of large amounts of information to anticipate and interpret change in the environment.  _______________________  The process of gathering information about competitors—who they are; what they are doing –Is not spying but rather careful attention to readily accessible information from employees, customers, suppliers, the Internet, and competitors themselves.  May involve reverse engineering of competing products to discover technical innovations.

© 2007 Prentice Hall, Inc. All rights reserved.7–3 Assessing the Environment (cont’d) Environmental Scanning (cont’d)Environmental Scanning (cont’d)  _______________Scanning  Screening a broad scope of information on global forces that might affect the organization.  Has value to firms with significant global interests.  Draws information from sources that provide global perspectives on world-wide issues and opportunities.

© 2007 Prentice Hall, Inc. All rights reserved.7–4 Assessing the Environment (cont’d) ForecastingForecasting  The part of organizational planning that involves creating predictions of outcomes based on information gathered by environmental scanning.  Facilitates managerial decision making.  Is most accurate in stable environments.

© 2007 Prentice Hall, Inc. All rights reserved.7–5 Assessing the Environment (cont’d) Forecasting TechniquesForecasting Techniques  Quantitative forecasting  Applying a set of mathematical rules to a series of hard data to predict outcomes (e.g., units to be produced).  Qualitative forecasting  Using expert judgments and opinions to predict less than precise outcomes (e.g., direction of the economy).

© 2007 Prentice Hall, Inc. All rights reserved.7–6 ____________________ The search for the best practices among competitors and noncompetitors that lead to their superior performance.The search for the best practices among competitors and noncompetitors that lead to their superior performance. By analyzing and copying these practices, firms can improve their performance.By analyzing and copying these practices, firms can improve their performance.

© 2007 Prentice Hall, Inc. All rights reserved.7–7 Team Exercise – page 258 Working Together – Benchmarking Study HabitsWorking Together – Benchmarking Study Habits

© 2007 Prentice Hall, Inc. All rights reserved.7–8 WHO ARE YOUR COMPETITORS? Ideas for Gathering Intel: Sales representatives deal on a daily basis with customers - and will hear what the competitors have been doing. Research & Development may come across new patents. Purchasing may find out that a supplier is now also supplying a competitor. Market research can give feedback on the customer's perspectiveWHO ARE YOUR COMPETITORS? Ideas for Gathering Intel: Sales representatives deal on a daily basis with customers - and will hear what the competitors have been doing. Research & Development may come across new patents. Purchasing may find out that a supplier is now also supplying a competitor. Market research can give feedback on the customer's perspective

© 2007 Prentice Hall, Inc. All rights reserved.7–9 SUN TZU – The Art of War (or the Art of Doing Business…) If you are ignorant of both your enemy and yourself, then you are a fool and certain to be defeated in every battle. If you know yourself, but not your enemy, for every battle won, you will suffer a loss. If you know your enemy and yourself, you will win every battle.

© 2007 Prentice Hall, Inc. All rights reserved.7–10 Allocating Resources: Budgeting BudgetsBudgets  Are the most commonly used and most widely applicable planning technique for organizations.

© 2007 Prentice Hall, Inc. All rights reserved.7–11 Allocating Resources: Scheduling SchedulesSchedules  Plans that allocate resources by detailing what activities have to be done, the order in which they are to be completed, who is to do each, and when they are to be completed.  Represent the coordination of various activities.

ninth edition STEPHEN P. ROBBINS PowerPoint Presentation by Charlie Cook The University of West Alabama MARY COULTER © 2007 Prentice Hall, Inc. All rights reserved. Gantt PERT Having Fun with &

© 2007 Prentice Hall, Inc. All rights reserved.7–13 What are they ? Gantt and PERT charts are both “CPM” (Critical Path Method) tools to: manage the tasks involved in big and complex projectsmanage the tasks involved in big and complex projects let project managers organize time, people, equipment and moneylet project managers organize time, people, equipment and money ensure the right people and equipment are in the right place and the right time allow managers to monitor the progress of a project

© 2007 Prentice Hall, Inc. All rights reserved.7–14 Project managers get paid big moneyProject managers get paid big money They will be on the examThey will be on the exam And, of course… Why should I care? You will be a GREAT MANAGER of you master these!

© 2007 Prentice Hall, Inc. All rights reserved.7–15 Gantt Basics Basically, a timeline with tasks that can be connected to each other (pg. 246 in text)Basically, a timeline with tasks that can be connected to each other (pg. 246 in text) Note the spelling!Note the spelling! It is not all-capitals!It is not all-capitals! Can be created with simple tools like Excel, but specialised tools like Microsoft Project make life easierCan be created with simple tools like Excel, but specialised tools like Microsoft Project make life easier

© 2007 Prentice Hall, Inc. All rights reserved.7–16 Making a Gantt chart Step 1 – list the tasks in the projectStep 1 – list the tasks in the project

© 2007 Prentice Hall, Inc. All rights reserved.7–17 Making a Gantt chart Step 2 – add task durationsStep 2 – add task durations

© 2007 Prentice Hall, Inc. All rights reserved.7–18 Making a Gantt chart Step 3 – add dependencies (which tasks cannot start before another task finishes)Step 3 – add dependencies (which tasks cannot start before another task finishes)

© 2007 Prentice Hall, Inc. All rights reserved.7–19 Making a Gantt chart Step 4 – find the critical pathStep 4 – find the critical path The critical path is the sequence of tasks from beginning to end that takes the longest time to complete. It is also the shortest possible time that the project can be finished in. Any task on the critical path is called a critical task. No critical task can have its duration changed without affecting the end date of the project.

© 2007 Prentice Hall, Inc. All rights reserved.7–20 Critical tasks, by definition, can have NO slack.

© 2007 Prentice Hall, Inc. All rights reserved.7–21 Exhibit 9–5A Gantt Chart

© 2007 Prentice Hall, Inc. All rights reserved.7–22 PERT Charts Not named after Mr Pert! Stands for Program Evaluation and Review Technique PERT Charts

© 2007 Prentice Hall, Inc. All rights reserved.7–23 PERT basics PERT is an acronym so it’s in capital lettersPERT is an acronym so it’s in capital letters Gantt is a name, so only has an initial capitalGantt is a name, so only has an initial capital In Gantt chart, the length of a task’s bar is proportional to the length of the task. This rarely applies to PERT charts.In Gantt chart, the length of a task’s bar is proportional to the length of the task. This rarely applies to PERT charts.

© 2007 Prentice Hall, Inc. All rights reserved.7–24 Allocating Resources: Analysis Program Evaluation and Review Technique (PERT)Program Evaluation and Review Technique (PERT)  A flow chart diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity.  Events: endpoints for completion.  Activities: time required for each activity.  Slack time: the time that a completed activity waits for another activity to finish so that the next activity, which depends on the completion of both activities, can start.  Critical path: the path (ordering) of activities that allows all tasks to be completed with the least slack time.

© 2007 Prentice Hall, Inc. All rights reserved.7–25 1: Which tasks are on the critical path? ANSWER: A,B,D,F,I Possible paths: A,B,C,E,I = = 13 days A,B,D,F,I = = 14 days A,G,H,I = = 12 days

© 2007 Prentice Hall, Inc. All rights reserved.7–26 Exhibit 9–8Events and Activities in Constructing an Office Building

© 2007 Prentice Hall, Inc. All rights reserved.7–27 Exhibit 9–9A Visual PERT Network for Constructing an Office Building Critical Path: A - B - C - D - G - H - J - K

© 2007 Prentice Hall, Inc. All rights reserved.7–28 Contemporary Planning Techniques ProjectProject  A one-time-only set of activities that has a definite beginning and ending point time. Project ManagementProject Management  The task of getting a project’s activities done on time, within budget, and according to specifications.  Define project goals  Identify all required activities, materials, and labor  Determine the sequence of completion

© 2007 Prentice Hall, Inc. All rights reserved.7–29 Exhibit 9–13Project Planning Process Source: Based on R.S. Russell and B.W. Taylor III, Production and Operations Management (Upper Saddle River, NJ: Prentice Hall, 1995), p. 287.