Strategic planning time horizon

Tactical planning lays out a step by step approach for the implementation of the strategic objectives with a time horizon of 1 to 3 years. Typical decisions include the launch or discontinuation of specific products, production capacity adjustments and product transfers within the existing production network. 

Operational planning ensures the optimum utilization of existing assets and efficient execution of the decisions taken in strategic and tactical planning. The time horizon covered is up to one year with daily or weekly intervals. Typical decisions include detailed production scheduling and distribution scheduling. 

Plan considers the existence of strategic, tactical, and operational thinking, covering long-range, medium-range, and short-term time horizons, respectively. The success of all aspects of a comprehensive continuous performance improvement system depends heavily on a sound, results-driven plan. 

Typically, the long term (strategic) plans consist of the same activities as shorter-term plans. However, the degree of accuracy and detail is much lower. As time passes, the long term plans will convert into medium term (tactical) plans with a higher degree of detail and ultimately into operational plans with a planning horizon in the span of one day up to a year. 

Both the maintenance strategy and spare-part strategy for installations are based on criticahty assessments and related characteristics, and if appropriate, cost-benefit analyses. Typical, strategic maintenance plans have a time horizon of 3-5 years. 

Tactical decisions are primarily supply chain planning decisions and are made in a time horizon of moderate length, generally as monthly or quarterly decisions, covering a planning horizon of one or two years. Thus, these decisions are typically made in an environment characterized by less uncertainty relative to strategic decisions, but where the effects of uncertainty still are not inconsequential. Examples of tactical decisions include the following ... 

The financial model considers the same t planning periods applied in the strategic supply chain formulation that cover the whole time horizon. This assumption allows an easy integration of both sets of constraints into a single holistic model. 

In long term planning, instead of the dynamic model, a strategic or conceptual decision is often made based on the averaged values for the time being. This is equivalent to say that we attempt to obtain only a prospect from the static or single-term problem whose parameters fluctuate in reality over the planning horizon such as demand. 

The main inputs required to answer the previous questions are (a) the planning horizon, (b) the costs of capacity expansion and/or reduction, (c) the different system constraints and time parameters, (d) the production strategic policies, and (e) the demand forecast. 

It is also necessary to consider what implications the tool has on the work processes, and the practical realizations. As outlined in Section 5, decision situations occur at different levels in an organisation. However, we believe that RAM analysis will be fit for strategic-and tactical-level decisions, more than decisions at an operational level. Because of the comprehensive type of analysis, and time and recourses required, RAM analyses are not suitahle for frequent (weekly or daily) use. Long-term planning is typically supported by RAM analyses at a yearly or half-yearly basis. Another example is renegotiation of frame agreements that is more infrequent, normally with a five or ten-year horizon. Most likely, Such RAM analyses will be handled by operational support located onshore. 

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