Understand the Principles and Practices of Operational Planning in Organisations

The need for operational planning for different types of operations

Operational planning is the process of planning strategic goals and objectives to tactical goals and objectives. It describes milestones, conditions for success and explains how, or what portion of, a strategic plan will be put into operation during a given operational period, in the case of commercial application, a fiscal year or another given budgetary term.[1]

There is a difference between operational planning and strategic planning, which are compared below:

Basis for Comparison Strategic Planning Operational Planning
Meaning The planning for achieving the vision of the organization is Strategic Planning. Operational Planning is a process of deciding in advance of what is to be done to achieve the tactical objectives of business?
Time Horizon Long term planning Short term planning
Approach Extroverted Introverted
Modifications Generally, the plan lasts longer The plan changes every year
Performed by Top level management Middle level management
Scope Wide Narrow
Emphasis Planning of vision, mission and objectives Planning the routine activities of the company


Operational Planning is vital for the day-to-day running of any business, providing employees with a clear understanding of what is required of them within their individual responsibilities.

The operational plan assist employees in understanding what needs to be done, by whom, how it will be done and where. An operational plan also forms the basis for financial budget requests as well as deciding on timescales for events over the short, medium and long term.

Operational plans will usually contain several important points. My own organisations operational plan is very lengthy due to the nature of business, but contains clear objectives and quality standards. In addition, an operation plan should also contain:

  • activities to be delivered
  • desired outcome
  • staffing and resource requirements
  • implementation timetables
  • a process for monitoring progress

I should be noted that operation planning should constantly consider the strategic planning of an organisation and not contradict it in any way.



The process of developing an operational plan for an organisation

There are several important key areas to consider when developing an operation plan and all of them must be considered before the plan can be put into place. An operational plan must take into consideration the organisations strategic plan.

In my experience, there are 5 core areas to consider when putting together an operation plan. These are:

By consulting all stakeholders within the organisation and identifying the organisations targets and how we are going to achieve them, we can ensure that we have specific goals or objectives to achieve whilst insuring that those objectives are relevant and achievable. Managers can then use systems to measure whether the organisation and its employees are heading in the correct direction to ensure that the plan is on course to be achieved within the agreed or desired timescale, such as key performance indicators or staged targets (as discussed in Unit 3).

When developing an operation plan, we must ensure that we set objectives which are specific, measurable, achievable, relevant and time-bound (SMART), especially when forecasting progress.


Short term priorities

Short term priorities are those which are required for the day-to-day running of the organisation, whilst at the same time looking to achieve the goals of the strategic plan.

Short term priorities in operational planning are those when there may be limited resources, and therefore the organisation will be looking to make the most of those resources over the next planned period, usually 12 months.



When developing our operational plan, our goals help us aim towards to achieving the objectives of the strategic plan. The goals may be single or multiple and stages over a short, medium or long-term period and will form part of our SMART targets.

Goals should be clear and concise.



Our initiatives within operational planning can form part of our goals. They may include such items as:

  • Recycling a minimum of 95% materials
  • Achieving a carbon neutral status
  • Allow employees more time to focus on professional development
  • Improving customer satisfaction feedback levels
  • Achieving a 0% accident rate

Out initiatives can be measured using KPIs and should be realistic and achievable.



Core Functions

Core functions are business functions that are critical, and closely related, to a firm’s strategy expressed in customer service, marketing, product design, etc. Routine administrative and maintenance tasks are not a part of core activities.[3]



Do we have the money to achieve what we want to achieve? Will we have enough cashflow to survive whilst we work towards our goals? Can we afford to buy and maintain equipment? These are just some of the questions that managers need to consider when building an operational plan and managers need to be certain that each action and that the organisation has or will have the capacity to provide the required resources.


The use of different planning tools and techniques in the operational planning for an organisation

Managers can utilise several planning tools and techniques in operational planning.

As already discussed, the fiscal element of an operational plan is vital. There is little point in having an ambitious plan without the financial means of delivering it. This may mean setting restrictions on what can be purchased, ensuring that there are sufficient funds available through the course of the plan to ensure that the plan can be achieved. Later, using software to monitor income and expenditure and having this information reported in a ledger report to managers daily. This can also help to ensure that budgets are being adhered to. In my organisation we use the well-known accountancy system, Sage. We may also be able to use previous experience and records to decide whether our plan is realistic and attainable. Of course, it may be difficult (if not impossible) to budget for a completely new idea where there is little existing evidence to support budget predictions. Nevertheless, a budget will usually form part of any business plan.

A financial and operational planning load forecast can be tied into fiscal planning to consider variables that influence a budget over a period, usually up to five years. Will bad weather have an effect on cashflow at certain times of the year? Does a supplier shut down for the summer holiday? In my industry, we know that we are going to be busier during school holidays and so plan our manpower accordingly for these holiday periods. There may be occurrences which cannot be predicted that may have an effect of the businesses load (financial or in terms of manpower such as illness, natural disaster, etc., but if at all possible load forecasting should be considered.

Within load forecasting, managers can also consider whether contingencies are required. Within my own organisation, we need to ensure that we always have a set number of specialist operatives on site at any one time. It would be too expensive to employ reserve staff for the odd occasions where illness results in us needing extra staff, so we pool trained operatives from a select number of agencies. In addition, we have a number of backup negative pressure units in case of emergency to ensure that we can still continue with a contract and that our operation isn’t unnecessarily interrupted.



Charts can often be useful for managers to understand the current progress of a project at any time. Some managers might like to use a system such as a Gantt chart (that illustrates a project schedule). Others may simply prefer a large whiteboard and some drywipe markers to tick off progress as it occurs!

Analysis forms an important part of operational planning. One such example is the project evaluation and review technique (PERT) which is intended to analyse and represent the tasks involved in completing a given project. PERT defines and makes visible dependencies by breaking them down into sections, facilitates identification of early start, late start, and slack for each activity. PERT provides for potentially reduced project duration due to better understanding of dependencies leading to improved overlapping of activities and tasks where feasible. Thus, a large amount of project data can be organised and presented in diagram for use in decision making. PERT can also provide a probability of completing before a given time.[4] However, PERT does have some disadvantages such as being difficult to scale down for smaller projects and charts being difficult to read, which is perhaps why it isn’t typically used in small and medium sized business.

[1] https://en.wikipedia.org/wiki/Operational_planning

[2][2] http://keydifferences.com/difference-between-strategic-planning-and-operational-planning.html

[3] http://www.businessdictionary.com/definition/core-activities.html

[4] https://en.wikipedia.org/wiki/Program_evaluation_and_review_technique#Advantages