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Strategic versus tactical operations decisions

6 May, 2016 - 10:08

Operations decisions include decisions that are strategic in nature, meaning that they have long-term consequences and often involve a great deal of expense and resource commitments. Strategic operations decisions include facility location decisions, the type of technologies that the organization will use, determining how labor and equipment are organized, and how much long-term capacity the organization will provide to meet customer demand.

For example, the leaders of a new hospital must decide where to locate the facility to be accessible to a large number of potential patients. Hospital administrators must evaluate the performance and cost of a wide variety of health equipment. Administrators must also assess and purchase information technologies to keep patient records, fulfill government regulations, provide accurate and timely communications, and track financial performance. Doctors, nurses, and staff must be hired and various departments (x-ray, lab, pharmacy, physical therapy, etc.) must be arranged to maximize both efficiency and effectiveness in patient care.

Tactical operations decisions have short to medium term impact on the organization, often involve less commitment of resources, and can be changed more easily than strategic decisions. Tactical decisions include workforce scheduling, establishing quality assurance procedures, contracting with vendors, and managing inventory. In the hospital example, scheduling the workforce to match patient admissions is critical to both providing quality care and controlling costs. Selecting a food service vendor is important to serving both employees and patients. Ensuring that the right drugs and supplies are on hand is achieved by working closely with vendors in the supply chain.