Pixabay image: 405913_1280 guardrails on a ship JayMantri.jpg
(BTW: the 12th Day of Christmas is Jan 5)
With all the change going on, you might think taking the time to plan makes your supply chains too slow.
That would be an incorrect thought.
Without planning, everyone gets to set their own path – not an easy or effective way to run a supply chain.
The only way to go fast in a supply chain is to plan up front. Luckily, planning is done in parallel with operations and sales, so a solid process for planning and resulting discussions shouldn’t slow you down.
S&OP, Sales & Operations Planning, long a staple of bell weather supply chains, reemerged during Covid to help with organizing the chaos going on in supply chains. It also came in to get a grip on how to forecast in times of change.
When you use a planning tool such as S&OP, anomalies stand out. You choose what to do about anomalies instead of blindly running around your processes to make things work because a weird order(s) came in.
You might still choose to run around processes, but a decision has been made knowing metric results may not be a healthy as desired.
Even better
There is a new entry into the planning world: Enterprise Business Planning (EBP)
EBP, the long term, strategic integration of goals, financial objectives, tactical and operational plans, links into the more tactical IBP (Integrated Business Planning). Tactical IBP is where finance works to link what is going on in operations and supply chains with the planned budget and other financial elements.
S&OP puts the sales/operational capability plan together for IBP analysis.
EBP provides guardrails for what is approved.
Which helps keep decision-making on track.
One of the puzzle pieces C-suite teams are looking to put in place are ways to gain visibility from the strategy areas into the operational areas.
The EBP – IBP – S&OP combination enables that visibility.
The guardrails set up the requirements for when to let the C-suite know a high-level decision needs to be made.
As a planner, you then can present the risks for various decision options.
Decisions should be made following the strategic plan.
Why?
To keep the strategic plan whole, it’s best not to change the EBP guardrails too often, or your company will experience strategic plan death by a thousand cuts.
Plus, your supply chain will be back to chaotic running around its processes.
Think of the ERP-IBP-S&OP process set as a governance tool to smooth decision making required in a rapidly changing environment. Flexible enough to allow for needed adjustment, but solid enough to provide real limits.
#planning #supplychainplanning #supplychain #SandOP #IBP #EBP #strategy #SupplyChainMavens #CynthiaKalinaKaminsky
Cynthia Kalina-Kaminsky is an ASCM Master SCOR instructor and consultant. She’s also a supply chain professional.
Supply Chain Mavens is teaming up with Process and Strategy Solutions to offer SCOR classes.
Learn more about the courses and register on the Process and Strategy Solutions website.