Planning is the process of defining and organizing the steps to reach specific goals in advance.
Planning is vital for individuals, organizations and societies; it improves resource efficiency, time management and the likelihood of success.
Planning is critical for companies to reach their objectives. Proper planning enables efficient use of resources, risk management and seizing opportunities.
Every organization needs planning. An organization without a plan leaves its future to luck.
If you don't have a plan, everything becomes a surprise.
Planning not only creates a roadmap to future goals but also identifies obstacles and risks so that appropriate strategies and actions can be prepared in advance.
At corporate level, planning defines strategic, tactical and operational steps that guide future activities. Below is a brief overview of these hierarchical planning levels.
The distinction between strategic, tactical and operational planning is a common management framework (Anthony, 1965).
Planning horizon is 2–10 years. This is the broadest level where high-level decisions are made.
Key objectives include setting the company's strategic direction, creating competitive advantages, ensuring sustainable growth and profitability. Typical topics are defining/updating strategic goals and KPIs, capacity and technology investments, market and competitor analysis, new product development, sustainability and digitalization investments.
Planning horizon is 3 to 24 months. Decisions at this level address implementation details of strategic goals. Planning is done at aggregate levels, critical concerns are detailed.
Objectives include converting strategic goals into operations and ensuring cross-functional alignment. Typical activities are Sales & Operations Planning (S&OP), demand-supply-inventory balancing, budgeting and resource planning, supplier and customer collaboration (CPFR), portfolio management.
Planning horizon is <3 months. Decisions may include detailed operational actions.
Objectives include managing daily operations efficiently, optimizing resources and ensuring customer satisfaction. Typical activities in this respect are demand planning and forecasting, sales activities, order management and promising, production planning, materials planning, warehousing and logistics planning, and detailed scheduling.
Strategic, tactical and operational planning levels apply to supply chain planning as well.
Organizations can use hierarchical planning to optimize supply chain processes, increasing visibility, collaboration and effective resource use.
Integrated planning aligns material and information flows across the organization for better outcomes.
Companies must structure planning correctly
to achieve supply chain excellence.
Integrated planning approaches use Strategic Planning at the top level, S&OP at the tactical level, and Sales & Operations Execution (S&OE) at the operational level. Collaborative Planning, Forecasting and Replenishment (CPFR) supports cross-organization integration.
You can read more about related planning topics using the links below.
Learn more about Supply Chain Management: click here.
Learn more about Sales & Operations Planning (S&OP): click here.
Learn more about Demand Planning: click here.
Learn more about Production Planning: click here.
Learn more about Materials Planning: click here.
Learn more about Inventory Management: click here.
Learn more about Logistics Planning: click here.
Optimum Planlama provides hands-on training and consulting services to tailor planning processes and develop related tools.
We recommend in-house workshops to align planning mindset and practices across the company.
Our planning-related service offerings include the items listed below.
To arrange an in-house training for your organization or to join a public session, request our proposal.