For most companies, planning for investments in new products, markets, facilities, and people takes place in isolation within functional, divisional and geographic silos. This is a symptom of a planning process that has gone off the rails. Where has planning value gone?
As a result of resources, people and money are generally limited and initiatives must compete. The best vehicle for evaluating opportunities is during the planning process. A well-designed planning process enables a company to develop, evaluate, approve and report on both steady-state and growth initiative investments. In other words, it is fundamental to core value creation.
Planning Value Today
Today, companies are moving away from planning in silos and moving towards a connected, comprehensive and continuous planning process.
A company’s Senior Leadership is looking to build processes which are supported by leading technology. These technology solutions allow for the sharing of critical information across functions including Sales, Marketing, Supply Chain and Finance. In addition to being connected, planning can now be continuous. Taking user inputs immediately after changes occur and not waiting for the next planning cycle or forecast. Being able to see the impact of changes as they occur allows the business to make more timely adjustments to keep things on track to targets.
Let me give you an example to start with. I worked with a fresh food company who struggled to adequately plan for investments on the supply side of their business. In this industry, it was not uncommon for weather or other crop issues to significantly impact the supply of the commodity at the field level. In addition, the supply side planners wanted to improve their ability to edit the plan and understand the subsequent impacts.
On the other side of the business were sales. They were planning demand at the region, customer, commodity and item level of detail. Unknown changes in product availability created a significant risk to both revenue and strained customer relationships. Unfortunately, the sales team was not receiving that information consistently or accurately causing unforeseen shortages and angry customers. The sales’ team wanted dependable, real-time communication of supply changes.
Planning Value Improvement
In its original state, the level of resource investment dedicated to resolving these ongoing issues was a significant expense for the company. The end solution creates a planning process that is no longer static, but instead is dynamic and allows for continuous input and adjustments. In addition, it connected the supply and sales side of the business at the product level. This insight allowed leadership to keep close track of issues including modeling of identified threats to supply and mitigate potential impacts at the customer level.
Now is the time for your company to significantly move your planning forward. Leave behind the annual planning process that many consider being a complete waste of time.
Download our eBook, “Turn Waste into Value”, to learn how to find true value in the planning process, and 3 steps to easily get your company started on the path to effective annual planning.