Planning exists on many levels as well as in many functional areas and organisations usually update their plans on an annual basis. Planning is a continuous process. It is particularly important to ensure functional plans support the overall corporate strategy and objectives.
Figure 3 shows the three types of plans and their characteristics:
Figure 3: Types of Plan
A logistics strategic plan is a planning process that can achieve competitive advantage via value and customer service that can increase customer satisfaction by anticipating future demand and managing resources in the supply chain. A common approach is Just In Time (JIT). The JIT concept affects logistics activity at all levels by reducing waste throughout the entire production process and supply chain to minimise lead times. Characteristics of JIT include:
- Low inventory
- Eliminates waste and focusses on value added activities
- Small production batch sizes
- Fewer suppliers with long term agreements
- Pull production system manufacturing to customer orders rather than a push system which manufactures for stock
- Employee empowerment
- Expose problems and bottlenecks
- Management commitment