Fast, good or cheap—your company will, broadly speaking, seek to compete along two of these dimensions. When designing a planning strategy it must serve enterprise goals, maximizing its strengths and managing the inevitable tradeoffs. In this article I reveal how to develop an operations planning approach that both maximizes a company’s competitive advantages and translates enterprise strategy into on-the- ground execution. I include a real-life example of a planning strategy that served a particular business model and how success was achieved through cultural change and effective performance management.
Jorge Vargas
Winter 2022-2023
5
Resilience, agility, and responsiveness are the key capabilities of any supply chain, and whose importance was brought into clear focus during the pandemic. These three levers represent each of the planning levels: execution, tactical and strategic respectively. In this article, I discuss the differences between the three, how they support enterprise strategy, and ways to build these capabilities into your supply chain. I also reveal how companies without these capabilities fared during COVID, and how their absence caused companies to make critical planning mistakes.
Imane Sabeh, CPF
Winter 2022-2023
4
Despite considerable writing and discussion on the subject, most S&OP processes are not strategic and actually struggle to rise above tactical levels of performance. In contrast, high-performing S&OP processes view strategy as part of a broader planning ecosystem interconnected in a robust, multifunctional manner. This article offers some insights into connecting the elements of S&OP to strategy while at the same time offering an ecosystem model to consider.
Patrick Bower
Winter 2022-2023
5
Demand Planning doesn’t exist in a vacuum—it exists to support the company’s unique competitive advantages, and must be designed in such a way that decisions made in planning forums support the strategic priorities. The following is a case study of a transformation project I led for a global sporting goods company with a unique growth-by-acquisition strategy. I detail the challenges I inherited, the implementation steps covering people, process, and technology, and the results achieved, along with lessons learned for aligning your planning to overall business objectives.
Eric Wilson
Winter 2022-2023
3
This article details how to link supply chain planning to business and organizational strategies. Using the examples of Walmart, Target, Apple, and Tesla, I reveal how different companies compete in their respective markets, and the corresponding supply chain approaches that support such strategies. I also discuss the role of gap analysis and a subsequent capability plan in connecting planning to strategy, the importance of developing the right supply chain KPIs to track adherence to strategy, and how demand management and S&OP play a key role in supporting business objectives.
Alan L. Milliken
Winter 2022-2023
5
The last two years have forced Forecasters and Planners to confront futures fraught with uncertainties. During COVID, the lines between short term, operational planning and longer term, strategic planning became blurred as strategic decision making was required to solve urgent, existential problems. In this article I explore the relationship between strategic and operational planning and whether there has been any change in their relationship in light of recent events. I also delineate and define tactical, operational and strategic planning, and how we can frame these relative to the time horizon they serve, and the risks they aim to mitigate.
Larry Lapide
Winter 2022-2023
4
Supply chain planning is tactical and operational by nature but many companies overlook the role of Supply Chain in strategic decision making. In this article I discuss why the supply chain planning function is uniquely positioned to assess the impacts of strategic decisions like outsourcing vs insourcing, capital investments in manufacturing sites, and new product launches. With real life examples from my time working in the Pharmaceuticals industry, I argue that our discipline understands better than anyone the risks and opportunities associated with large scale initiatives and the implications for inventory, customer service, cash flow, and EBITDA. Further, I recommend that for organizations where Supply Chain is purely tactical and operational, efforts must be made to earn a seat at the strategic decision making table.
Allen Jacques
Winter 2022-2023
4
All companies with S&OP maturity benefit from both tactical and strategic planning that allows for both short term responses to volatility and longer term planning that fosters competitive advantage. In this article I discuss what steps are needed to move a company from tactical to strategic planning in S&OP, and how to leverage both during periods of great uncertainty. Further, I reveal why it is essential to have connected tactical and strategic processes that are in turn tied to the company’s enterprise goals. In particular, I explain how Radienz Living used S&OP to drive key changes to company strategy during COVID.
Mark Temkin
Winter 2022-2023
4
Successful companies across all industries have one thing in common—every function in the organization leans heavily into a clearly defined go-to-market strategy. Supply chain and demand planning are arguably the biggest value drivers in this regard. In this article, I reveal two real-life case studies of companies with very different value propositions and how unique planning responses maximize their competitive advantages. With specific tips for the Product and Executive Reviews in S&OP, I reveal how connecting demand planning to strategy serves a company’s key priorities, whether it be cash flow, taking market share, or customer service.
Bram Desmet
Winter 2022-2023
4
How did you get started in planning/supply chain as a career? I started my career as an industrial engineer at a factory a long time ago. One of our biggest challenges was factory scheduling. I decided to tackle this challenge and very quickly this turned into creating good aggregate supply plans and accurate demand plans. I became very interested in these topics as I could see the immediate effect that it had on company performance.
Carlos Londoño
Winter 2022-2023
3
The US economy is showing substantial resilience according to Dr. Ray Perryman of the Perryman Group. He anticipates the economy to slow down in 2023 with a likely soft landing. Consensus also predicts the nation’s GDP growth rate to remain somewhat steady at around 0.36% well into fourth quarter of 2023. However, due to higher rates set by the Fed, Wells Fargo projects a deeper downturn and forecasts a 1.5% decline in real GDP, reflecting contractions in spending on durable goods and residential construction.
Nur M. Onvural
Winter 2022-2023
6
We all know that S&OP requires the involvement of Finance but in many organizations this function can feel detached from the core S&OP functions of demand and supply. Make no mistake, though, the financial context of a company underpins the entire planning process and is key to keeping demand and supply planning aligned with financial constraints, company goals, and strategy. In this article, I invite planning professionals to walk a mile in Finance’s shoes, revealing the priorities and core responsibilities of this function, including how they must represent the voices of management, ownership and, if applicable, the bank, in the S&OP process. I also discuss how Finance can add value to the S&OP process (and the enterprise as whole) by revealing the impacts of planning activities on cash flow, margin, and P&L, and more.
Don Clark
Fall 2022
4
COVID, with its massive disruptions to both demand and supply, revealed critical shortcomings in supply chains. What is often overlooked is that while we couldn’t necessarily have predicted the pandemic, we had engineered our supply chains in such a way that COVID’s impact was far more severe that it needed to be. Overly lean inventory policies, over-optimized supply chains, SKU proliferation, inflexible production, and BOM complexity meant that we had no slack in our supply chain and operations to handle major demand or supply disruptions. In this article I describe how we as a discipline were already primed for failure and that COVID merely lit the fuse. I intend for this article to document the failings of our discipline in reaction to this event so that we may better prepare for the next, inevitable disruption.
Patrick Bower
Fall 2022
8
During the COVID-19 pandemic too many supply chains — predicated on lean inventories — broke down sooner than they should have. Meanwhile, since the pandemic’s impacts are now easing, product companies are now stuck with surplus inventories of items that sold well during the pandemic but are no longer. In this column I discuss how the Just-in-Time mindset and overly-focusing on Return of Assets fosters an unfairly negative view of inventories. I argue that this mindset needs to be revisited in light of the lessons taught to us by COVID. I also distinguish between ‘good’ inventory and ‘bad’ inventory and the many reasons to hold the former.
Larry Lapide
Fall 2022
4
The most difficult thing in forecasting is to forecast new products because they have no direct history to go by. In this article, I describe an approach to focus consensus team forecasting, called ‘trial and repeat.’ It is used to forecast demand and success indicators for new products. The article explains step-by-step how it works to forecast and how it is used to measure and adjust expectations during the first year of sales. I also describe how I got how he got the approval of senior management as well as of others involved in embedding this model in the process.
Rich Gordon
Fall 2022
5
The unprecedented supply constraints and demand shifts that emerged during COVID and are being exacerbated by the war in Ukraine and rising inflation, have highlighted the criticality of shortterm, tactical planning. In this article I discuss how Sales & Operations Execution (S&OE), when integrated into Sales & Operations Planning (S&OP), can effectively identify and address gaps in the S&OP/IBP plans and AOP. Far from being yet another business planning acronym, this process is a valuable addition to existing S&OP/IBP processes and helps mitigate the risks and volatility we are currently experiencing, facilitates adherence to enterprise goals, and enable companies to fully leverage their competitive advantages.
Steven Hainey, CPF
Fall 2022
4