Supply Chain Planning and Supply Chain Execution: Where Should Your Focus Lie?

I know it’s World Cup season, but I’m much more into the “other” football—American football. So bear with me here.

Imagine you’re a head coach in the NFL. You have a big game coming up this Sunday. But instead of studying game footage of your opponent, forming a strategy to exploit their weaknesses, and scripting out your plays, you spend the week putting your guys through drill after drill after drill.

What do you think the results will be? Probably not so good, right?

Now imagine you’re a head coach who prepares for the big game by canceling all team practices for the week. Instead of having your players sweat out on the field, you have them join you in the video room for eight hours each day. You all spend the week talking strategy, drafting up plays, and visualizing how you want Sunday’s game to go.

Think you’ll win? Neither do I.

My point is that in football, you can’t win without good planning and proper execution. Running a business is much the same. Supply chain planning and supply chain execution are equally important parts of the equation.

Don’t Go to Extremes

I’ve noticed that some manufacturers and distributors put a huge percentage of their time and effort into planning. This is understandable—after all, the common letter in S&OP and IBP is “P,” which stands for “planning.” There’s lots of buzz nowadays around sales and operations planning and integrated business planning. Supply chain decision-makers have gotten the message loud and clear that planning matters.

Still, there are some folks who are more focused on the other side of the equation. These executives figure they’ll just use the planning capabilities in their ERP systems to generate “good-enough-for-now” forecasts. They then run their entire businesses off this data.

Ultimately, the best approach is to strike a balance of planning and execution. Just as a head coach will spend days creating a game plan, your supply chain decision-makers need to use a powerful supply chain planning platform to come up with a winning strategy. And just as a football team’s offensive and defensive coordinators are instrumental in guiding the players to successful execution of the game plan, you’ll need the right ERP platform to process your business’ transactions accurately and efficiently.

Whatever you do, don’t trust your ERP system to provide the planning capabilities you need—planning best occurs at the summary level, whereas execution occurs at the transactional level. Each discipline requires its own specialized system.

When You Strike a Perfect Balance

What’s the result when you do things right? You may finally beat the New England Patriots.

OK, I’ve probably stretched that analogy far enough. What are the results when you balance supply chain planning and supply chain execution in your business?

All aspects of your operations can finally work together to enhance your bottom line.

By planning and executing strategically, you can make smarter, leaner purchases of raw materials. Make better arrangements with the producers of your subcomponents. Draft up more favorable shipping deals. Keep your production, sales, and marketing teams on the same page regarding production schedules, orders, and safety stock levels. Maximize your profits and sales while reducing your inventory and providing outstanding customer service.

Remember: execution without planning results in poor performance. And planning without execution can leave you with a helpless feeling. To avoid both of these extremes, contact Demand Solutions for more information about balancing supply chain planning and supply chain execution for greater results.