Strategic, Tactical, and Operational Planning
Planning typically is done in phases.
Long-range aggregate supply demand balances are used to
strategically determine the utilization of existing capacity and
whether new capacity needs to be authorized. Once a year,
capital plans are reviewed for new products and adjustments to
capacity for existing products. The decisions made during this
planning step provide the available capacity and the basic
structure of the supply chain.
deals in the medium range to make decisions about incremental
adjustments to the capacity and/or customer service levels. Sales
and Operational Planning is performed once per month to monitor and
adjust plans where incremental changes can be made. Changes to rail
fleets, storage, contract capacity and major swings in raw material
purchases will require three to five months. The decisions during
this planning step provides narrower boundaries and guidance
necessary to do the scheduling exercise.
Operational planning is another name for
scheduling. In the context of the previous planning steps,
operational planning characterizes the conversion of a plan that
can change, without penalty, to a schedule in which money will
start to be spent.
Converting a Plan to Committing Resources
Defining the planning constants was not very
important prior to this step. However, the objective must stay
in clear focus. That objective is a Quality schedule, so that
everything comes together just at the right time. There is a
real tradeoff between detail and accuracy. By definition, the
more detailed, the less accurate. If a raw material needs to be
ordered months ahead then the level of detail required may just
be by week. All calculations could then be done on a weekly
basis. The exact delivery date could be firmed up later. The
point is to reserve a given quantity of material within a
specific period. This is a good MRP application.
It wouldn't make sense to call a vendor up
every week to change the exact date of delivery. Plus or minus a
week doesn't matter to them more than one month ahead of time.
Operational planning covers the range of commitments—where
loose plans are communicated to when specific schedules (to
the day or even hour) are conveyed.
Thus far the role of scheduling has been defined. From some
of this discussion there is a degree of inference made about its
importance. Did you get it? MRP II will double-book the
schedule. Some customers are not going to get what they wanted
on time unless some push planning is applied. There is much more
at stake. Push planning is only one aspect of scheduling.
To be Continued
stay current on bullet-proofed manufacturing solutions, subscribe to
ezine, "The Business Basics and Best Practices Bulletin."
Simply fill in the below form and click on the subscribe button.
also send you our free
Special Report, "Five Change
Initiatives for Personal and Company Success."
personal information will never
be disclosed to any third party.
leaders have a responsibility to educate and train their team
members. Help for developing a self-directed, World Class
Manufacturing training program for your people is just a click
are welcomed to print and share this bulletin with your
manufacturing teams, peers, suppliers and upper management ...
better yet, have them signup for their own copy at:
the escalating spam-wars, it's also a good idea to WHITELIST
our bulletin mailing domain via your filtering software or
This will help guarantee that your bulletin is never deleted
Knowledge you’ll not find at offsite
seminars nor in the books at Amazon.com
Lean Manufacturing - Balanced Scorecard
ISO 9000:2000 - Strategic Planning - Supply Chain
Management - MRP Vs Lean Exercises - Kaizen Blitz
Lean Six Sigma - Value Stream Mapping
All at one Website: Good
Six Sigma Training Thinking
Out of the Box
Supply Chain Inventory Management Total
Quality Management Principles
Manufacturing Implementation Lean