Example of a format for a long-range production plan - Strategic Management

Extract from the plan of a hypothetical pharmaceutical company:
General packaging department
Objective
To package the ‘SIX’ and ‘OPQ’ ranges of pharmaceutical products to the defined standards to ensure compliance with government and health regulations and the quality requirements of marketing. Production requirements (000 packs).

Production-requirements

Capacity
All calculations are based on 2000 hours production per year (250 days by 8hours).

Capacity

Programme

  1. Manual packaging. Rationalisation of packs and products (in conjunction with marketing) is expected to steadily reduce the need for manual packaging operations. The need will remain for certain large packs containing 5000 tablets or more tablets as these cannot easily be processed by available automatic or semi-automatic methods. Action – Rationalisation studies to be completed year 1: implemented years 2–3: Mr Young. Working party to study ways of mechanisation or work simplification. Report end year 1: Mr Briggs.
  2. Strip packs. The capacity of this section is estimated at equivalent to million tablets per year. Tablet numbers to be processed are: This suggests that capacity will be exceeded in year 2. It is not planned to order new capacity until year 3 for installation in year 4 (estimated capital cost £5000)
    because:
    1. This will give time for sales forecasts to be evaluated against results in view of the large increase of sales expected from as yet untried products.
    2. Requirements up to and including year 4 can be met through overtime working, although this becomes less economic in year 4 than purchasing a new machine.
    3. A new machine would double present capacity.
      Action – Check production requirements during year 1 – Mr Young. Evaluation of machine required year 3 – Mr Young.
  3. Automatic tablet packaging line. This line packages the standard range of small tablets into plastic tubes of various sizes. All tablets are currently counted semi-automatically, using King TB-4 electronic counters. Filled tubes are automatically capped, labelled and placed manually in outers. Capacity is adequate for the period of the plan, with sufficient flexibility to meet seasonal factors or unexpected increases in requirements.
    Action – Working party to investigate ways of fully automating all aspects of the operating: to report in year 1 – Mr Briggs.
  4. Syrup packaging unit. Seasonal factors are such that syrup packaging capacity will be utilised 50 per cent during the winter months and 25 per cent during the summer. A constraint of higher utilisation is caused in the syrup manufacturing unit which has a lower capacity than the packaging plant. No new plant is required during the life of the plan.
  5. General opportunities. Surplus capacity in various sections of the packaging unit provides an opportunity for increasing revenue by taking in outside contract packaging. This possibility will be investigated (Miss Jones) during year 1, with a view to implementation towards the end of the year. (As this is an unproved opportunity, no account has been taken of it in the budget.)

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