The  following is some more detail behind the attached presentation I gave at an Australian planning & forecasting conference. YOu can find the presentation here: 2013 The role of DR in IBP October 1st v2

The changing role of planning

The key message in my presentation was that Planning & Forecasting is not only about numbers anymore. Forecasting must mature beyond numbers, systems and spreadsheets only. It is about having clear stories around those numbers and drive a clear conversation and integration throughout the organization. When all other supply chain parameters stay the same, horizontal conversation will be the differentiator for improved performance.

Planning maturity

In the book ‘Bricks Matter’, Lora Cecere shows a very useful table with 5 stages of supply chain maturity. Where 30 years ago supply chain was all about operations or transactional efficiency, it has matured towards optimizing networks from a market insights point of view. To become network driven, we need to become horizontally connected. The roles of planners have to change accordingly. Planners have to become business partners that can horizontally connect and add value, rather than only provide a forecast number.

In our quest to mature, new terminologies like ‘sensing’ and ‘shaping’ are useful though we have to be aware these are very much ‘Gartner-ish’ terminologies. A show of hands in the room confirmed that only a few uses those terminologies in their day to day work.  Social media gives us the opportunity to go beyond sensing and listen directly to our consumers. Some companies already have a Chief Listening Officer (CLO) and use software like Radian 6, to have a continuous market pulse-check. In this way companies can react to consumer sentiments before it hits the news or papers and do damage control or jump on opportunities. The low margin manufacturing industries will take a while before they can afford this, but one day it will happen for them as well. ‘Market Listening’ can be the new tool in the planning toolkit for mostly branded companies.

Horizontal Conversation

The real value in planning is to have organizational and horizontal conversation about plans and their impact on the total integrated business performance. Once we have clear visibility on plans, assumptions and forecast numbers and a clear story around our latest update plan, we can drive horizontal conversation.

1.  Conversation: to start having organizational and horizontal conversation we need intimacy and interactivity in an organization. To drive intimacy we need to trust, listening and to get personal. These are soft skills that an organization can learn, but often these soft skills are not the focus or not acknowledged as critical to drive business performance.  In a demand driven or market driven supply chain, where horizontal connectors are a must, getting critical mass in these soft skills is where real value is for organizations.
2. Integration: to understand the end to end, horizontal or integrated impact of our updated plan on the total business we need to understand other business functions and think holistic and outside our own silo. It is the only way to assess the total business or total network impact of our plan.

Improved business performance

There is a business case for integration and organizational conversation. In an environment where many supply chain parameters stayed mostly constant over a period of time I witnessed a significant improvement of customer service levels. There was hardly any change in forecast accuracy, attainment, stock levels and waste or system visibility.

What did happen is that a large group of senior managers started to run cross functional trust & collaboration workshops. In these workshops they asked themselves the question; ‘what stops us from trusting each other more and collaborate better?’ They shared stories, problems and got more personal. They took time to listen and got a better understanding of others function’s issues and common business goals. They build trust in those workshops.

This reflected on themselves,  their direct reports and the wider business. People started to pick up the phone more to solve issues, dared to engage in crucial conversations and were responsive to each others request. When you hear people say; ‘something changed, we are so much more responsive now’, or ‘it seems that more people pick up the phone’, it is a sign that more organizational and horizontal conversation is happening. And that is where the real value is.