Tactical plan

Tactical plan
See also
Strategic planning Change management model Nature of strategic management Strategic statement Resource plan Strategic driver Plan Strategic goal Knowledge structure

Tactical plan - series of scenarios and decisions for how companies’ strategic long-term objectives can be achieved within the medium term (within shorter horizons). Tactical plan shall be implemented to balance customer demand and supply capacity in the medium term and to avoid shortage and overcapacity.

Definition and role of tactical planning

Planning, in basic terms, is a process during which a decision is made about the way of achieving the goal. In a business context, planning is "the process of deciding the activities or events in an organized way so that they are successful or happen on time" (Combley R. 2011, p. 633). This means that planning is about deciding what actions to take in the future, how and when they will be carried out and what resources to use to achieve what goal(s).

The general parameters of the planning configuration in the context of production are:

• frequency of planning,
• planning horizon,
• planning object.

The frequency of planning determines how often a given decision-making process is conducted. The planning horizon describes the period to the future that the plan may cover. The planning object represents the unit on which most decisions are made, which may be final products, product families, storage units or combinations of these types.

When making tactical planning decisions, special emphasis is placed on the use of resources, while the planning object is in most cases combined into a family of products.

Main objectives of tactical plan

The main objective of the tactical plan is to maintain balanced customer demand and supply capacity within a tactical medium-term timeframe, which can extend up to two years. The tactical plan is a combination of decision-making and problem-solving activities aimed at balancing supply and demand.

Hierarchical perspective divides planning into three horizons:

• strategic long-term,
• tactical medium-term,
• operational short-term planning.

Explaining the impact of tactical planning activities on details and uncertainties in a given context is important for both theory and practice. Tactical planning serves as a transition between strategic and operational planning and the study of planning activities at the tactical level helps to understand the basic conditions necessary to balance supply and demand. Even though existing literature largely agrees that the main objective of tactical planning is to balance supply and demand, how this balance is achieved are likely to vary across contexts, given the contextual differences in levels of detail and uncertainty faced by tactical planning activities.

Tactical planning environment

Tactical planning - as an aggregated process and setup - differs according to the environment in which planning is carried out.

Planning in different contexts varies in terms of the number of aspects or details to be considered and the availability of relevant information commonly referred to as complex information. The complexity of the context requires certain preconditions for planning. Tactical planning is about balancing supply and demand, so identifying demand and supply-side complexity helps to understand in general how the preconditions for tactical planning change with the change in the planning environment.

Examples of Tactical plan

1. Developing and Implementing a Sales Plan: A sales plan is a tactical plan that outlines the steps needed to achieve sales goals. It typically includes goals, strategies, objectives, tactics, and timelines. For example, a company may set a goal of increasing sales by 10% over the next year. To achieve this goal, the company may devise a strategy of increasing its customer base, expanding its product line, and creating promotional campaigns. Tactics to reach these objectives may include launching a new website, offering discounts and incentives, and attending trade shows.
2. Creating a Digital Marketing Plan: A digital marketing plan is a tactical plan that outlines the steps needed to achieve digital marketing objectives. It typically includes goals, objectives, tactics, and timelines. For example, a company may set a goal of increasing website traffic by 10% over the next year. To achieve this goal, the company may devise a strategy of launching a new website, optimizing existing content, and creating promotional campaigns. Tactics to reach these objectives may include keyword research, SEO, content marketing, and social media marketing.
3. Developing and Implementing a Human Resource Plan: A human resource plan is a tactical plan that outlines the steps needed to achieve human resource objectives. It typically includes goals, objectives, tactics, and timelines. For example, a company may set a goal of reducing employee turnover by 10% over the next year. To achieve this goal, the company may devise a strategy of increasing employee engagement, providing training, and developing a rewards system. Tactics to reach these objectives may include creating employee surveys, implementing job rotation programs, and offering employee recognition programs.

Advantages of Tactical plan

A tactical plan is a set of actions and decisions that can help a company achieve its long-term objectives within shorter timelines. The advantages of having a tactical plan include:

• Having a clear roadmap for achieving goals: A tactical plan provides a clear roadmap for a company to follow to achieve its goals, allowing teams to make decisions with a clear sense of direction.
• Setting achievable milestones: Tactical plans help to break down goals into achievable milestones that can be met within a certain timeframe. This can help teams stay focused and motivated to achieve goals in a timely manner.
• Prioritizing tasks: A tactical plan can help teams prioritize tasks and allocate resources accordingly to ensure that the most important tasks are completed first.
• Increasing efficiency: Tactical plans can help teams identify inefficiencies and make adjustments to improve efficiency, which can help save time and resources.
• Ensuring accountability: Tactical plans help to ensure that everyone is held accountable for their tasks and that performance is continuously monitored and evaluated.

Limitations of Tactical plan

A tactical plan is a series of scenarios and decisions for how companies’ strategic long-term objectives can be achieved within the medium term. However, there are some limitations to this approach, including:

• Not being able to anticipate unexpected changes: A tactical plan is designed to achieve specific objectives and does not account for sudden changes in the environment, such as a new competitor entering the market or a shift in customer preferences.
• Lack of flexibility: Tactical plans are often rigid and inflexible due to the need to maintain a certain degree of control over the implementation process. This can mean that the plan is not able to be adapted quickly to changing circumstances.
• Lack of innovation: Tactical plans can be too focused on short-term objectives and may not allow for creativity or innovation. This can mean that the plan is not able to take advantage of opportunities to create value in the long term.

Other approaches related to Tactical plan

A Tactical plan is a series of scenarios and decisions for how companies’ strategic long-term objectives can be achieved within the medium term (within shorter horizons). Other approaches for achieving these objectives include:

• Strategic planning: Companies use strategic planning to define the overall aim of the organization and develop plans for achieving it. This involves setting long-term goals and objectives, and developing strategies for achieving them.
• Operational planning: Operational planning focuses on the day-to-day operations of an organization. It involves making decisions about resources, processes, and activities that will be necessary to achieve the goals and objectives.
• Contingency planning: Contingency planning involves preparing for potential future events that may have an impact on the organization. It includes developing strategies and plans for responding to unexpected events, such as natural disasters or economic downturns.

In summary, a Tactical plan is one approach that companies use to achieve their long-term objectives, but other approaches such as strategic planning, operational planning, and contingency planning are also used.

References

• Axson David A. J. (2010), Best Practices in Planning and Performance Management: Radically Rethinking Management for a Volatile World, John Wiley & Sons
• Combley R. (2011), Cambridge Business English Dictionary, Cambridge University Press
• Jonsson P., Holmström J. (2016), Future of supply chain planning: closing the gaps between practice and promise, International Journal of Physical Distribution & Logistics Management, Vol. 46, No. 1, pp. 62-81.
• Kjellsdotter Ivert L., Dukovska-Popovska I., Fredriksson A., Dreyer H.C., Kaipia R. (2015), Contingency between S & OP design and planning environment, International Journal of Physical Distribution & Logistics Management, Vol. 45, No. 8, pp. 747-773.
• Larsson A.S., Fredriksson A. (2014), Capacity Planning at a Tactical Level in Hospital Departments. In: Grabot B., Vallespir B., Gomes S., Bouras A., Kiritsis D. (eds) Advances in Production Management Systems. Innovative and Knowledge-Based Production Management in a Global-Local World. APMS 2014. IFIP Advances in Information and Communication Technology, vol 439. Springer, Berlin, Heidelberg
• O'Reilly S., Kumar A., Adam F. (2015), The role of hierarchical production planning in food manufacturing SMEs, International Journal of Operations & Production Management, Vol. 35, No. 10, pp. 1362-1385.
• Shurrab H. (2019), Tactical planning in engineer-to-order environments, Department of Technology Management and Economics Division of Supply and Operations Management, Chalmers University of Technology, Gothenburg, Sweden

Author: Marta Cader