TAXONOMY OF DECISION MAKING

Strategic Tactical Planning Operational

Planning Scheduling
Objective Resource Capacity Execution
acquisition utilization
 TAXONOMY OF DECISION MAKING

Strategic Tactical Planning Operational

Planning Scheduling
Objective Resource Capacity Execution
acquisition utilization
Time Horizon long medium short
 TAXONOMY OF DECISION MAKING

Strategic Tactical Planning Operational

Planning Scheduling
Objective Resource Capacity Execution
acquisition utilization
Time Horizon long medium short
Management top medium low
Level
 TAXONOMY OF DECISION MAKING

Strategic Tactical Planning Operational

Planning Scheduling
Objective Resource Capacity Execution
acquisition utilization
Time Horizon long medium short
Management Level top medium low

Level of Detail Highly Moderately Detailed

aggregate aggregate
 TAXONOMY OF DECISION MAKING

Strategic Tactical Planning Operational

Planning Scheduling
Objective Resource Capacity Execution
acquisition utilization
Time Horizon long medium short
Management Level top medium low

Level of Detail Highly Moderately Detailed

aggregate aggregate
Data Uncertainty high medium low
 TAXONOMY OF DECISION MAKING

Strategic Tactical Planning Operational

Planning Scheduling
Objective Resource Capacity Execution
acquisition utilization
Time Horizon long medium short
Management Level top medium low

Level of Detail Highly Moderately Detailed

aggregate aggregate
Data Uncertainty high medium low

Decision Risk high moderate low

 TAXONOMY OF DECISION MAKING

Strategic Tactical Planning Operational

Planning Scheduling
Objective Resource Capacity Execution
acquisition utilization
Time Horizon long medium short
Management Level top medium low

Level of Detail Highly Moderately Detailed

aggregate aggregate
Data Uncertainty high medium low

Decision Risk high moderate low

Strategic Planning
• Network design:
• what production facilities and where;
• what size and what capability
• how much flexibility and where
• what distribution facilities and channels

• Sourcing and supply chain configuration

• make/Buy
• make-to-order, make-to-stock
• what suppliers
• what contract terms
Tactical Planning
• Production allocation
• what production facilities make what product categories
• what customers are served by what production facilities
• Supply chain flow optimization
• how to optimize product flow across supply chain network
• Aggregate production planning
• how to plan for demand or supply seasonality
• how to adjust capacity over time
• Inventory replenishment policies
• how frequently to reorder
• Safety stock placement
• what buffering strategy to employ
Operational Scheduling
• Dynamic execution of plans
• production scheduling
• transportation scheduling
• order fulfillment
• procurement and inventory replenishment
 Footwear planning at major product brand
Time before Decisions New Information Granularity

Guertin, Jane, “Practical Example of Developing and Implementing an Optimization & Scenario Planning
Tool.” S.M. thesis, MIT, 2014.
 Footwear planning at major product brand
Time before Decisions New Information Granularity

Two to five years Capital investments in current Company product Lines of business; major
factories strategy product categories
Add new factories Growth targets

Guertin, Jane, “Practical Example of Developing and Implementing an Optimization & Scenario Planning
Tool.” S.M. thesis, MIT, 2014.
 Footwear planning at major product brand
Time before Decisions New Information Granularity

Two to five years Capital investments in current Company product Lines of business; major
factories strategy product categories
Add new factories Growth targets
18 to 24 months Types of products each Production capacity Product categories
factory will make;
Investment in process Product category
technology forecasts

Guertin, Jane, “Practical Example of Developing and Implementing an Optimization & Scenario Planning
Tool.” S.M. thesis, MIT, 2014.
 Footwear planning at major product brand
Time before Decisions New Information Granularity

Two to five years Capital investments in current Company product Lines of business; major
factories strategy product categories
Add new factories Growth targets
18 to 24 months Types of products each factory Production capacity Product categories
will make; Product category
Investment in process forecasts
technology
12 to 18 months Production assignment for New product plans Product level
most products Product forecasts
New product assignment
Capacity additions

Guertin, Jane, “Practical Example of Developing and Implementing an Optimization & Scenario Planning
Tool.” S.M. thesis, MIT, 2014.
 Footwear planning at major product brand
Time before Decisions New Information Granularity

Two to five years Capital investments in current Company product Lines of business; major
factories strategy product categories
Add new factories Growth targets
18 to 24 months Types of products each factory Production capacity Product categories
will make; Product category
Investment in process forecasts
technology
12 to 18 months Production assignment for New product plans Product level
most products Product forecasts
New product assignment
Capacity additions
6 to 9 months Manufacturing plan Forecast by sku Product level by color
Distribution plan and size

Guertin, Jane, “Practical Example of Developing and Implementing an Optimization & Scenario Planning
Tool.” S.M. thesis, MIT, 2014.
 Footwear planning at major product brand
Time before Decisions New Information Granularity

Two to five years Capital investments in current Company product Lines of business; major
factories strategy product categories
Add new factories Growth targets
18 to 24 months Types of products each factory Production capacity Product categories
will make; Product category
Investment in process forecasts
technology
12 to 18 months Production assignment for New product plans Product level
most products Product forecasts
New product assignment
Capacity additions
6 to 9 months Manufacturing plan Forecast by sku Product level by color
Distribution plan and size
Production begins Revisions to production plan Updated forecast Product level by color
information and sales and size
Guertin, Jane, “Practical Example of Developing and Implementing an Optimization & Scenario Planning
Tool.” S.M. thesis, MIT, 2014.
 Footwear planning at major product brand
Time before Decisions New Information Granularity

Two to five years Capital investments in current Company product Lines of business; major
factories strategy product categories
Add new factories Growth targets
18 to 24 months Types of products each factory Production capacity Product categories
will make; Product category
Investment in process forecasts
technology
12 to 18 months Production assignment for New product plans Product level
most products Product forecasts
New product assignment
Capacity additions
6 to 9 months Manufacturing plan Forecast by sku Product level by color
Distribution plan and size
Production begins Revisions to production plan Updated forecast Product level by color
information and sales and size
Guertin, Jane, “Practical Example of Developing and Implementing an Optimization & Scenario Planning
Tool.” S.M. thesis, MIT, 2014.