There’s a moment every fall when a planning process that only looks at the current year quietly stops being useful.
It usually arrives in October. The monthly cycle runs as usual: demand review, supply review, reconciliation, executive meeting. The slides look familiar. But look closely at what’s actually being decided, and there isn’t much left to decide. Production for the rest of the quarter is largely committed. Promotions are locked in with customers. Materials are ordered. The plan has run out of runway.
A monthly process can’t steer the current quarter
This isn’t a criticism of the people in the room. It’s a matter of timing. A monthly planning cycle needs time to identify an issue, agree on a response, and then execute it. By the time a decision made in an October executive meeting works its way through the business, most of Q4 is already behind us.
So when the process only looks to December 31, the late-year meetings become one of two things. They’re either a reporting exercise, where we review a quarter we can no longer change. Or they’re a scramble, where we try to close gaps with whatever levers are still within reach.
The scramble is the more dangerous of the two.
Closing Q4 gaps by borrowing from Q1
When the year-end number is short, the levers available late in the year tend to look alike:
- deeper promotions
- loading customer inventory
- pulling shipments forward
- pushing out spending
- running plants hard to absorb overhead
Each of these can help December. Most of them take something from January.
A customer who takes extra inventory in December doesn’t need to order in January. A promotion that pulls consumer purchases forward leaves a hole in the weeks after. Inventory built to absorb costs this year has to be sold, or written down, next year. Spending pushed out of Q4 doesn’t disappear; it lands in Q1 alongside everything else.
None of these decisions is necessarily wrong. The problem is making them without seeing the trade-off. If the plan stops at December, Q1 is invisible, and the cost of closing this year’s gap is never put in front of the people who are deciding to close it. They’re choosing with half the picture.
January surprises are rarely surprises
Then January arrives. Orders are soft, inventory is high at customers and in our own warehouses, and the new year starts behind plan. Leaders ask what happened.
Usually, nothing happened. The signals were there in October, in customer inventory levels, in promotional calendars, in the pull-forward we approved. We just weren’t looking at a horizon long enough to see them.
Extend the horizon and plan through the turn of the year
The fix is less about adding effort and more about changing where the effort goes:
- Extend the planning horizon. A mature IBP process looks at least 24 months out. In October, that means the conversation should be spending more time on 2027 than on the remaining weeks of 2026.
- Shift the agenda as the year progresses. By the fall, the current quarter should take up a small part of the executive meeting. Most of the discussion should go to the periods where decisions still have room to make a difference.
- Show Q4 and Q1 together. When a gap-closing action is proposed, show its effect on both quarters side by side. If closing $5M in December creates a $4M hole in January, leaders should decide that with their eyes open.
- Treat year-end as a point on the line, not the end of the line. Customers and consumers don’t reset on January 1. Neither should the plan.
A question for your next executive meeting
Look at the time on your agenda and ask: How much of this meeting is about periods we can still change? If most of it is about the current quarter, the process has run out of runway and needs a longer road. This is a theme that runs through Trust the Plan: the value of planning comes from making decisions early enough for them to matter, with full visibility of the consequences.
