Particularly in the current climate of uncertainty and disruption, many organizations are struggling to look out beyond the next one or two months because most of their time is consumed dealing with issues and challenges that need to be resolved today. This, however, isn’t a new phenomenon. We all love heroes. Fire fighting is a lot more exciting than fire prevention, even though we all know which is more pragmatic.
The challenge is shifting the balance away from crisis management and towards more planful activities, but also recognizing that we still need a crisis management process. I often hear criticisms of S&OP/IBP in that it is too slow – we can’t afford to wait an entire month to respond to new news. My response to that is a resounding “of course!” IBP is not designed to deal with issues that need to be resolved immediately. IBP needs to be complemented with a short-term execution process like Integrated Tactical Planning (ITP), which deals with and responds to changes in the near-term.
The key is to connect those two processes and have them working together. IBP is about setting an executable plan, and then ITP is about executing it to the best of our ability. Just like in IBP where we measure success in terms of how we deliver to our annual plan, the same applies in execution – success is delivering to our IBP plan, but with an added dimension that we want as few changes as possible. In the longer-term horizon we have the luxury of being able to close gaps more creatively, but within the near-term the cost to change is high, and options are limited. The old saying that boring factories are profitable factories is true.
Coming back to the original challenge – when we’re up to our armpits in alligators, how can we shift focus to longer-term planning? Here are a few suggestions:
- Look at who is involved in day-to-day execution. Senior leaders need to delegate these activities to line managers and shift their focus to setting up the business for success with achievable plans.
- Ensure that the plan is clearly visible in the execution routines. Planners, schedulers, order entry, and other execution roles should be able to see when execution is deviating from the plan.
- Establish a clear escalation path for situations where we find ourselves unable to deliver the plan.
- Introduce measures of stability – schedule break-ins, abnormal demand, and escalations. We should continuously strive to reduce changes and churn.
Finally, Winston Churchill said it best: “If you’re going through hell, keep going.” Digging out of a perpetual near-term focus requires a concerted effort but will pay-back dividends in the long run.
Greg Spira 