Unravelling hidden performance opportunities through Multilevel Planning

Frederic Dufour / Nov 03 , 2018

We live in a globalized world where human and technological resources are scarce and expensive, and where competition dominates on all dimensions of business (innovation, speed, quality, cost, communication, etc.). Companies must therefore be visionary, agile, “human” and connected. In addition to this, companies must rationalize their manufacturing, marketing and HRM costs.

In other words, modern companies must strive for overall performance, in order to develop. This is because every decision made and every action taken – at whichever level of the organization – can have consequences on its quality, reputation, profitability and even, in some cases, the survival of the company.

The objective of “overall performance” implies that managers have knowledge of what is happening at all moments within the company, but also that they understand sufficiently early and precisely what the consequences of their decisions are.

The concept of “Multilevel planning” links the different levels of the organization to each other in a computerized manner. The tools that do this can be compared to “Russian Dolls”.

A matrix vision of the company

Planning in levels translates into the information system a matrix vision of the company that dynamically links its various constituent elements. All the actors of the company are thus linked within a system which becomes, by the force of things, cooperative again.

Decision-making at one level or entity therefore concerns all the other levels, all the other entities.

Vertical Integration

Multilevel planning implies that the strategic and operational levels are finally linked to each other. Smaller organizations will work on one or two levels, but larger ones in four or five. In either case, information flows bi-directionally through the information system. The information is then detailed when it moves from level n to level n-1 or added when it moves in the opposite direction.

Horizontal Integration

Planning in levels does not only provide a hierarchical vision of the company; it is also based on a transversal, inter-departmental and inter-service vision. Within modern, open companies, this interaction also involves subcontracting partner companies – and even customers!

Thanks to multilevel planning, the processing times for an upstream task being carried out in a third- party department are known, and their impact on the mobilization of resources in downstream departments can be simultaneously recalculated. The consequences on delivery targets, cash flows, and use of subcontractors can also be recalculated in real time.