Planning is the optimal allocation of resources to achieve established goals, a set of processes associated with setting goals (objectives) and actions for the future.
An industrial enterprise is a system open to both inputs and outputs that actively interacts with its surroundings. The external environment of an enterprise is everything around it that affects its operation, or that the enterprise affects in turn. The environment's impact on the enterprise can be active or passive.
An enterprise as a system can function and develop successfully only through the strict interaction of its internal elements with one another and with the external environment. The method that enables coordination of goals and resources in advance and ensures the purposeful interaction of the individual parts of the enterprise's material and social structure is planning. Planning possesses the properties of a system. The planning system consists of three main components: input, output, and a converter (the plan development process itself). The input consists of informational, material, and labor resources; the output is the product of the planning system (the plan, or project) — a document that defines the parameters and behavior of the production system as a whole and of its elements during the planning period. It represents a set of addressed, interlinked assignments that determine the volume, deadlines, order, and sequence of work execution, the expenditure of material and labor resources, the implementation of social measures, as well as the optimal interaction of elements with one another and with the external environment, including interaction with suppliers, consumers, and government economic and financial agencies.
Thus, the plan defines the enterprise's and its divisions' production and business activities and thereby establishes the control parameters of production that the division's team must achieve, against which production monitoring and regulation are carried out by comparing actual results with projected ones.
The management system implements this program and keeps the enterprise operating within the parameters set by the plan.