Three Things to Know before you Implement Strategic Planning

There are 3 key things you need to understand about your business today, before you embark on implementing a strategic planning approach, such as Integrated Business Planning or well-executed S&OP.

The motivation for implementing a strategic planning approach is pretty clear – you want to align your whole business, and make sure you can plan for overall profit. Your success in achieving your goals though, will rely on how well  you execute the implementation.

You must first understand where your business is today. You need to clearly define the critical aspects of your company’s current-state business and planning environment, including:

  • the business and supply chain strategy
  • the current supply chain and network structure
  • the strengths and weaknesses of the current planning processes

1. Understand the Business and Supply Chain Strategy

Effective planning starts with a clear definition of a company’s strategic and competitive position. This includes a clear understanding of target markets, customers and consumers, and how the company is going to effectively compete on that stage. There must be a clear vision of the company’s basis of competition, and what the drivers of value are. From here, a supply chain strategy and an ‘aligned business model’ can be derived.

So, a critical part of the ‘current state’ assessment would include a review of the strategic and supply chain plans with major input from the executive team.  It is interesting to note that as a part of this strategic review, it is often of benefit to ‘refresh’ the strategic position. This can range from a full strategic review; or developing a supply chain strategy (from the corporate strategy); or identifying the ‘drivers of value’ within the business (what are the things that a company does that has the dramatic effect on enterprise value?).

2. Understand the Current Supply Chain and Network Structure

If planning effectiveness is to be improved, it is also necessary to understand a company’s current network and supply chain structure. You need to be clear about those planning processes that are required to oversee and optimise, and which ones also form the basis of any future supply chain and optimisation model required in supporting any future strategic business plan. Again, the amount of effort required here depends  on how completely the current network and supply chain has been mapped, defined and understood within the business.

The work effort could range from workshopping a full definition of the supply chain to simply reviewing documentation supplied by the company.  The full definition would include defining each supply chain ‘node’ by attributes such as purpose, strategic objectives, KPIs, throughput capacities, constraints, etc.  Once the supply chain definition is received then it needs to be critiqued.

3. Understand the Current Planning Processes

Having undertaken these two steps, it’s then possible to complete a full analysis and ‘critique’ of the current planning processes, including a review of the ‘process, people, and enabling technologies that are currently supporting the business. By developing a ‘physical documentation’ of the end-to-end planning process – utilizing actual live documents (e.g. strategic plans and budgets; supporting data inputs; meeting agendas and actual minutes; screen ‘dumps’) people are then drawn into this process and often it generates a more constructive critique of where the current planning processes are effectively supporting the business, and where they need to improve.

From here, a platform is established to develop an idea of “Where do we need to be?” – creating a ‘vision’ for the future state planning processes.