Last week, I had the pleasure of listening in on a thought-provoking discussion led by Chris Turner, co-founder of StrataBridge Consulting on the S&OP Control Paradox. Chris dropped a series of compelling statistical breadcrumbs about the rapidly changing path for creating and operating a competitive global business. His numbers showed the aggregate impacts of natural disasters, oil prices, internal complexity and technology adoption on businesses of all kinds. But his main point wasn’t about WHAT is driving integrated business planning in global organizations: Chris urged the audience to take a hard look at HOW they were putting their planning to work.
Integrated Business Planning, which brings together strategic and operational planning into a single line of sight, got its start in the 1980’s as Sales & Operations Planning, with large companies looking to balance demand and supply planning for better organizational control. For business in that era, having a solid annual plan that controlled inventory, production and distribution from one view of demand made absolute sense. But in today’s world of changing customer demand, growing global supply chains with intricate interdependencies, and massive disruption, can we afford to “lock in” our planning at the cost of limiting growth?
It’s true that great planning should provide visibility and assurance in forecast accuracy. Great S&OP groups have the potential to be the corporate heroes when cross organizational consensus forecasting yields aligned demand and supply, lower inventory, better customer satisfaction and higher margin. But is your planning set for only the ideal world, or are you agile enough to flex your planning to accommodate real world changes and mitigate risk while optimizing new opportunity?
This week, as lovers and a huge number of consumer businesses place their bets on reliable supply chains to deliver over 150 million cards, 180 million roses and 36 million boxes of heart-shaped chocolates, it’s a good time to ask yourself: are your personal and business plans set up to give you control or better differentiated, competitive advantage?
