As supply chain planning maturity in organizations advances, planners must change their focus and develop an outside-in mindset, according to Gartner, Inc. Implementing an outside-in mindset means that supply chain planning leaders must look first at the business objectives of the company, and align strategies and process that support those objectives.
“A recent Gartner survey found that 84% of companies already have a sales and operations planning process in place. This is proof of how the planning function has matured,” said Marko Pukkila, vice president and team manager with the Gartner Supply Chain Practice. “However, this is not the end of the journey. With advanced maturity, new expectations by leadership and stakeholders arise. Planning teams will have to change their mindsets, as it will no longer be enough to just provide copious amounts of data.”
During the Gartner Supply Chain Planning Summit, which is taking place in Denver, Colorado through Tuesday, Gartner analysts explained how supply chain planning leaders can elevate the planning function to prepare for the future and effectively support business objectives.
The functional capabilities and mechanics of the planning process have massively improved in the past years. Due to advanced technologies and algorithms, planners now have access to more datapoints than ever before. Forecasts have become more detailed and frequent.
“The task for planners now is to look at the data and draw conclusions about the risks and opportunities for the future,” Mr. Pukkila added. “They must move away from reactively responding to what the forecast says and move towards actively supporting the overall business objectives. We call this an outside-in mindset.”
The transformation to the outside-in mindset consists of three steps.
Step No. 1: Realize That the Time to Transform Is Now
An analysis of the 2008-2010 recession revealed that some companies knew that an economic turn was inevitable and were prepared for it. Instead of just reacting to current events, they had planning processes in place that provided forward-looking insights. This allowed them to make supply chain decisions that were aligned with their future needs.
“When the recession was over, those organizations were able to speed out of the economic turn much faster than their peers who did not engage in the preparation process,” Mr. Pukkila said. “With the economical and geopolitical disruptions we see today, another turn might be coming. Planning leaders should act before it’s too late.”
Step No. 2: Refocus the Planning Team to Business Outcomes
Executives and other stakeholders expect the planning function to contribute to the overall business perspectives. Planning leaders might have to redefine what planning means to them and their teams.
“Planning doesn’t end with the creation of a forecast,” Mr. Pukkila continued. “It is about using the forecast data to find paths to help the business get where it wants to go. Think of planning like a navigation system. It plots the best route, foresees obstacles and navigates around them.”
Step No. 3: Become the Orchestrator of Success
Supply chain planning is perfectly positioned to bring together cross-functional business stakeholders and drive execution to make supply chain contribute to overall business success. Planning leaders can align the different parts of the business behind a common plan that supports the business objectives.
“The thought behind an outside-in mindset is to be aware of what is happening around you – be it a business objective or an upcoming recession – and use the planning function proactively to set up internal processes that are optimized for what will happen in the future,” Mr. Pukkila concluded.
About the Gartner Supply Chain Planning Summit
Gartner analysts are providing additional analysis at the Gartner Supply Chain Planning Summit taking place on November 4-5, 2019 in Denver, Colorado. This Summit gives supply chain planning leaders insight into how to deliver tangible outcomes in support of business objectives. They are learning how to transform the planning function from within, while harnessing emerging technologies to realize the value of SCP as a competitive advantage and significant contributor to their organization’s bottom line.