Operational business planning techniques are essential tools that companies use to plan, manage and optimise their day-to-day operations. These techniques help businesses to achieve their goals and objectives by aligning their resources and activities with their strategic plans. Companies can improve efficiency, reduce costs, and increase productivity by using operational business planning techniques. The techniques include methods such as identifying and prioritising tasks, allocating resources, tracking progress, and implementing continuous improvement processes. Additionally, operational business planning often includes contingency planning, which involves identifying and preparing for potential future events that could have a negative impact on the organisation, and benchmarking, which is the process of comparing an organisation’s practices and performance against industry best practices or top-performing organisations. Operational business planning techniques are necessary for companies to effectively plan and execute their day-to-day operations, ultimately leading to the company’s success.
Purposes and features of operational business planning techniques
The primary purpose of operational business planning techniques is to help businesses plan and manage their day-to-day operations in a way that is aligned with their overall strategic goals and objectives. These techniques enable businesses to:
- Identify and prioritise tasks: Operational planning techniques help companies to identify the tasks that need to be completed to achieve their goals and to prioritise these tasks based on their importance and the resources required to complete them.
- Allocate resources: Operational planning techniques help businesses allocate the necessary resources (such as time, money, and personnel) to the tasks that must be completed to achieve their goals.
- Track progress: Operational planning techniques help businesses track progress, measure the results of their operations, and identify improvement areas.
- Improve efficiency: Operational planning techniques help businesses to identify and eliminate non-value-added activities, streamline processes, and continuously improve operations to increase efficiency and reduce costs.
Some common features of operational business planning techniques include:
- Hierarchical structure: Many operational planning techniques use a hierarchical structure to break down a project or process into smaller, more manageable parts. This helps to clearly define the tasks that need to be completed and the resources required to complete them.
- Visual representation: Many operational planning techniques, such as Gantt charts or flow charts, use visual representation to help businesses understand and manage their operations.
- Data-driven approach: Many operational planning techniques use data and statistical analysis to identify and eliminate processes’ defects and continuously improve operations.
- Continuous improvement: Many operational planning techniques focus on continuous improvement to continually increase efficiency and reduce costs.
Purpose and function of contingency planning
Contingency planning is the process of identifying and preparing for potential future events that could have a negative impact on an organisation. The purpose of contingency planning is to minimise these events’ impact and ensure that the organisation can continue operating as normally as possible in the face of unexpected challenges.
There are several functions of contingency planning, including:
- Risk assessment: Contingency planning begins with a thorough assessment of the potential risks the organisation could face. This may include risks related to natural disasters, technological failures, financial disruptions, or other events.
- Risk management: Once the potential risks have been identified; contingency planning involves developing strategies to mitigate or eliminate these risks. This may include implementing policies and procedures to prevent or minimise the impact of these risks or developing contingency plans to allow the organisation to continue operating if these risks materialise.
- Communication and coordination: Contingency planning involves developing clear communication and coordination plans to ensure that all necessary parties are informed and prepared during a disruption. This may include communication plans with employees, customers, suppliers, and other stakeholders.
- Resource management: Contingency planning involves identifying and securing the resources needed to respond to a disruption. This may include identifying backup systems or equipment, securing alternate sources of supplies or materials, and identifying contingency staff.
By following a comprehensive contingency planning process, organisations can minimise the impact of unexpected events and ensure they can continue operating as normally as possible.
Benchmarking
Benchmarking is a powerful tool that helps organisations to identify areas for improvement and to learn from the experiences of others. It compares an organisation’s practices and performance against industry best practices or top-performing organisations. The goal of benchmarking is to identify areas of excellence and where the organisation is underperforming and then use this information to improve.
There are several types of benchmarking that organisations can use, including:
- Internal benchmarking, which compares different departments or divisions within the organisation
- Competitive benchmarking, which compares the organisation’s performance to that of its competitors
- Functional benchmarking, which compares the organisation’s performance in specific functions, such as marketing or human resources, to that of other organisations
- Generic benchmarking compares the organisation’s performance to that of other organisations in any industry.
Benchmarking can be used in various aspects of operations, such as production processes, customer service, supply chain management, and more. It can also be used to identify best practices in the industry, identify new technologies or processes that could improve performance, and help identify areas where the organisation lags behind the competition. By using benchmarking, organisations can make data-driven decisions and improve their overall performance, leading to increased competitiveness and profitability.
Best practice in contingency planning
Best practice in contingency planning involves a comprehensive and systematic approach to identifying and preparing for potential future events that could have a negative impact on an organisation. Some key elements of best practice in contingency planning include:
- Use of risk impact/probability charts: One effective way to identify and prioritise potential risks is to use risk impact/probability charts. These charts allow organisations to assess the likelihood and potential impact of different risks and to prioritise their contingency planning efforts accordingly.
- Contingency plans covering a range of scenarios and responses: It is essential for contingency plans to cover a range of potential scenarios and to include a range of responses to these scenarios. This helps ensure that the organisation is prepared for various disruptions and can adapt to changing circumstances.
- People to inform: An essential aspect of contingency planning is ensuring that all necessary parties are informed and prepared during a disruption. This may include employees, customers, suppliers, and other stakeholders.
- Key responsibilities and timelines: Contingency plans should clearly define the key responsibilities of each party in the event of a disruption and the timelines for each action. This helps to ensure that everyone knows what is expected of them and can respond quickly and effectively.
By following these best practices, organisations can ensure that their contingency planning efforts are comprehensive, effective, and well-coordinated.
Benefits of contingency planning
Contingency planning is the process of identifying and preparing for potential future events that could have a negative impact on an organisation. Some benefits of contingency planning include the following:
- Continuity of output: By identifying and preparing for potential disruptions, organisations can minimise the impact of these events on their operations and ensure that they can continue producing and delivering products or services as normally as possible. This helps to maintain the organisation’s competitiveness and to minimise the impact on its customers and other stakeholders.
- Safe and sustained business activity: Contingency planning helps organisations identify and mitigate potential risks to their operations, which helps to ensure that they can continue operating safely and sustainably. This can help to protect the well-being of employees and other stakeholders and to reduce the risk of costly disruptions.
- Cost savings: By identifying and eliminating non-value-added activities and streamlining processes, contingency planning can help organisations to reduce costs and improve efficiency. This can result in significant cost savings over time.
- Increased resilience: By developing contingency plans, organisations can increase their resilience to unexpected disruptions and be better prepared to handle these events when they do occur. This can help reduce these disruptions’ impact on the organisation and its stakeholders.
By following a comprehensive contingency planning process, organisations can minimise the impact of unexpected events and ensure they can continue operating as normally as possible.