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.

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