Operational dimensioning and tolerancing play an important role in process planning. It ensures that resultant part dimensions and tolerances do not exceed specified design values. Tolerance chart analysis is an effective technique for process planners to calculate mean values and tolerances of operational dimensions. However, a tolerance chart can be built only after all the intial engineering decisions have been made concerning the process plan. Specifically, setups and setup datums should be identified. While many researchers focused their attention on tolerance chart analysis, the selection of setups and setup datums (setup planning) was overlooked. No systematic approaches for setup planning can be found in the literature. This paper discusses the importance of setup planning to tolerance control in process planning. A graphical approach is then proposed to generate optimal setup plans based on design tolerance specifications.