2 Key Symptoms of a Broken Planning Process

There are a couple of key symptoms that point to a sub-optimal planning process, and the only way to get rid of them is to fix the underlying problems. Until then, your planning won’t be able to deliver what your business really needs.

Symptom #1: Are you suffering from Spreadsheet Overload?

A quick indicator is to count the spreadsheets. The classic symptom of an at-risk planning process is the existence of an array of tailored spreadsheets used by a range of stakeholders in your business. You may well be familiar with the scenario – different departments, roles, and people all operating different demand and supply plans on their own useful, but disconnected, spreadsheets. It’s usually the case that the more spreadsheets there are, the bigger the problem. The issue is not with the spreadsheets themselves – they are a great tool when used correctly – but the fact that the spreadsheets usually aren’t integrated. Decisions made using spreadsheets don’t tend to flow across to other spreadsheets, nor land in your central ERP system. The result is disconnected, myopic planning that doesn’t consider the business as a whole.

Why do people use their own tailored spreadsheets?

The simple answer is often that they feel that the alternative is worse. People develop their own spreadsheets because they lack the overview they need in their current ERP and planning systems. They can tailor the spreadsheets to suit the unique aspects of their business area and ensure that their world, at least, is generally under control.

Of course, what is good for one area of the business is not necessarily good for another, or for the business as a whole.

If you want to seriously address the “spreadsheet epidemic” problem, you need to provide a better alternative that will eliminate the need for tailored, discrete spreadsheets.

Out of the frying pan into the fire

The challenge lies in taking a holistic view to this problem. Historically, companies have often tackled the spreadsheet epidemic by complementing their ERP systems with sophisticated add-on solutions to enhance the limited planning support that usually resides in their ERP systems. Typically they will use a range of solution providers who specialize in particular areas, such as forecasting, inventory optimization, S&OP, and production scheduling. Unfortunately, from a whole-business perspective, the end result is not much better than the spreadsheet scenario – a range of highly functional tools that still don’t achieve the result of a seamless and integrated planning process.

Symptom #2: Do Your Decisions Flow?

The difficulty of integrating decisions is frequently overlooked. Decisions need to flow seamlessly across the intertwined areas of the business. Planning decisions made in one area need to be available as input and respected in other areas, to avoid making contradictory plans. A typical example of this is in the way Sales and Operations Planning (S&OP) is currently executed in many organizations – it usually has an emphasis on balancing demand and supply on an aggregated level for the medium/long term horizon. However, to get maximum business value from S&OP, decisions need to flow across to your tactical and operational planning processes, where other people make daily decisions on what to distribute, produce, and purchase.

For that to happen, all decisions need to be stored in a central database that is used for planning across all areas. This is rarely achieved with a myriad of add-on solutions, no matter how functional they are in their own right.

When investigating a better planning solution, you do need to make sure that your choice offers an alternative to a collection of spreadsheets or disjointed add-ons. The solution must match up to the usability, flexibility, and customization of spreadsheets to ensure ready adoption by all areas of the organization. Your solution will also need to exceed the functionality of add-ons by supporting the use of a single database across all business areas and time horizons, and ensuring that decisions made at any level, consider the impact on the whole business.