How Do I Improve Results in Supply Chain Planning?

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How Do I Improve Results in Supply Chain Planning?

By Lora Cecere, Supply Chain Insights - 10/11/2016
Satisfaction with supply chain planning implementations is low. Only one in three companies are satisfied with their demand and supply chain planning solutions. With this low satisfaction rating, many would ask if it is worth the trip. I believe emphatically, yes. Most companies make seven mistakes. Here we share insights on how to avoid the pitfalls:

1  Supply Chain Planning is Not a Technology Implementation.
Supply chain planning is a way of life. When companies only focus on a technology implementation and do not give the planners time to plan or the education to learn the system, the planning solutions will not be utilized. Each data model requires six to 16 months to fine tune and align with business goals. In the set-up of each optimization engine, there are inputs to be refined, optimization to be tuned, and outputs to be analyzed.

2 Give Planners Time to Plan. Using the solutions to plan requires time.
When a planner is responsible for both urgent tasks and planning, the urgent will always win out over the important. Similarly, when a planner is asked to plan both demand and supply for a product line, the supply planning will take precedent and the demand planning will be put on the back burner. Make sure that the planners have time to plan. Don’t confuse the urgent with important.  

3 Build a Planning Career Path.
A mistake that many companies make is having supply chain planning as an entry-level position. Great planning teams are de­pendent on being fully staffed with fully trained planners. It takes eight to 12 months for a planner to learn the job. If companies staff as an entry-level position and churn the position, companies will never get better at planning.

4 Clarify Supply Chain Excellence.
Planning optimizes the output; however if the goal, or objective function, is not clear, then the engines cannot be fine-tuned.  

5 Define Terms.
When I observe most companies discussing supply chain planning, they spin. The issue is the lack of clarity on terms. A term like integrated planning can have multiple definitions. Does it mean integrated business planning (a type of sales and operations planning)? Is it tight integration of transactional data to planning systems? Is it tight coupling of tactical to operational planning? Get clear on the terms.

6 Get Clear on Governance.
When defining planning, be clear on the role of the global corporation, the role of the business and the role of the local supply chain teams. Where planning happens varies based on governance. While analytics can improve the time to make decisions, this only happens if people are clear on governance.

7 Focus on Continuous Improvement.
With each implementation, clarify what good looks like for an output. Drive continuous improvement in planning.

If you avoid these seven pitfalls, your success rate for supply chain planning will be much higher.

All the best in your journey,