By Brad Way | Manager, Integrated Demand and Supply Planning | Chainalytics |
“Some people try to find things in this game that don’t exist but football is only two things – blocking and tackling.” – Vince Lombardi
Everyone – including the legendary coach Vince Lombardi – knows that football possesses complexity far beyond just blocking and tackling. However, success and winning are often achieved by consistently applying the fundamentals of the game. Supply chain planning is no different. Yet, too often we dream big in planning, hoping for touchdowns with expensive technology or complicated processes which ultimately fall short of the goal line.
Supply chain planning may be the single most aspirational business function in existence, particularly on the demand planning side of the equation. Hope springs eternal! Each year seems to bring a new technology answer, cleverly marketed and branded. Each year seems to bring the next fake punt, the next end-zone tip play. But year after year, the same questions continue to be asked. Perhaps Lombardi applies to demand planning, too.
- Under which function should demand planning report?
- Who should collaborate to derive the best plans?
- Who should own the forecast?
- What is the right way to forecast?
- When should we call down the projections?
- How should Sales and human insights be merged with math-based projections?
- Should we use a statistical forecast, and if so, for which products?
- Is a probabilistic forecast better than a statistical forecast?
- Which software package is best for us?
- And on, and on…
Sound familiar to you? Each year, we hear things are far more complex today than they were just a few years ago, and planning processes and capabilities need to evolve to keep up. Don’t get me wrong, I agree with a need for evolution. I am one of the continuous improvement types, and I love technology and innovation. However, many of the companies asking these questions haven’t yet achieved a basic demand planning capability which fully integrates across key operational functions and proactively looks beyond the execution window. An awful lot of teams are throwing long while unable to execute the run.
Companies too often hope that a software investment will enable better decision making but then overlook the basic blocking and tackling required in terms of people and process. This is not the Field of Dreams. “Build it and they will come” does not apply to demand planning. This is the gridiron. Plan, Execute, Repeat. You have to drive to the goal line, every yard of the way.
I fell in love with demand planning during an undergraduate internship for a CPG manufacturer. That was 20 years ago. This game has been around for a long time, yet there are still many companies without demand planners, still companies without cross-functional consensus processes, and still companies where marketing, supply chain, sales, and finance are unable to efficiently move the ball down the field together. So where have we gone wrong?
Perhaps part of the problem lies with our universities failing to advance demand planning as a critical role in manufacturing businesses while continuing to educate about business functions as separate operational silos. Many degree programs focus too much on marketing, strategy, product innovation, procurement, transportation, and production scheduling as key functions, and fail to impress students with the interconnectedness of the end-to-end supply chain and business dependencies in an increasingly demand-driven world. Nonetheless, businesses cannot blame academia for its own shortfalls. The primary culprit of the slow adoption of best practices in the demand management space is a general reluctance by Manufacturers to fully support the blocking and tackling of demand management professionals.
Best-in-class manufacturers have become leaders by adding demand planners and solid demand planning process fundamentals, and then by linking functions together with a robust and well-established cross-functional consensus process such as S&OP or IBP. Their success stems from an investment in people first, followed by the processes and technologies which harness collaboration to provide visibility, agility and efficiency in making timely business decisions.
Before you can leverage the latest and greatest offensive scheme, you first have to have a great team of players on the field, coached, conditioned, and enabled to execute the fundamentals. The winningest coaches understand that their players make important and impactful decisions every minute of the game, and these leaders keenly understand the business risks and cost implications of a demand planning team that does not work cross-functionally with the rest of the team or is unable to execute against demand management fundamentals. In other words, at the core of what drives leading performance in planning is attention to detail, a dedication to continuous improvement, and above all, the willingness to make the investment in the team itself.
“The achievements of an organization are the results of the combined effort of each individual.” – Vince Lombardi
Brad Way is a manager in the Integrated Demand and Supply Planning competency at Chainalytics. He has 20+ years of experience helping organizations successfully implement supply chain planning and forecasting strategies.
Read more about how Chainalytics supports an end-to-end supply chain: