Behind the Book: Successful Integrated Planning for the Supply Chain
26th March 2018 | Richard Lloyd
Insights from the author
Ten years ago as I struggled, yet again, to implement technology in another organization that did not seem to want it, be ready for it, or to have considered the implications of taking on new processes and technologies, I began to wonder if there was another way.
Top-down change management programs kept failing, compelling me to research the complexities of the supply chain challenges, including organizational behaviour, to try and understand what was going wrong.
Successful Integrated Planning for the Supply Chain is the result of my research. In it, I share discovered concepts and ideas and propose how to tackle the organizational and human challenges within supply chain planning.
And it feels like the race is on. As we attempt to meet the many needs and aspirations of the human race, we are steadily destroying our planet. Over the past 200 years, a growing consciousness has enabled us to view the ecosystem not as a servant. Yet our actions have upset the balance and created long-lasting effects which spiral beyond our control.
The supply networks we humans have created to provide for our many needs are the principal users of our planet's resources. We must find a sustainable way forward that continues to meet demand and is able to survive in a competitive environment.
Steps towards this have begun to improve the efficiency of supply chains. Procurement, materials management, factory planning, forecasting, distribution and transportation have all seen encouraging changes.
However, the end-to-end optimised and sustainable supply chain still eludes most organizations. Why? Because it requires coordination between many different players across departments and organizations.
The result is that local optimums are achieved often at the cost of the global optimum.
Integrated planning attempts to address this problem by aligning plans across organizations. The benefits of doing so include enhanced financial predictability, increased top-line revenue growth, and cost reductions through a more efficient and effective supply chain.
Integrating all players to work together in this way is increasingly feasible; the exponential growth of computing power and connectivity provides technical solutions to these problems. Yet progress to implement processes and technology in this area has been slow and dogged by failures.
Designing Interventions to Improve the Integration of Planning Processes
To change the way an organization operates it is necessary to intervene in some way. But before we begin, we must consider three things:
1. The nature of the challenge we are addressing: what does it mean to try to intervene to integrate planning?
2. How various approaches might play out in the life cycle of an intervention or project. What are the consequences (both intended and unintended)?
3. What an alternative approach might be, and how that could be started.
There are elements that could be of interest to any organization that has different departments and entities that need to work together: hospitals, airports, universities, government ministries, etc.
Supply chain thinking depends on an abstract belief in the benefits of collaboration. There are true believers who 'get it', and there are people who don't; "the resistance".
In Successful Integrated Planning for Supply Chains, I explore the world of 'resisters' and consider how potential confrontation might be diffused. I argue that an integrated supply chain depends on mindset and values first, and by looking at the assumptions made about supply chains, leaders can address behavioural problems.
Successful Integrated Planning for Supply Chains: Chapter Breakdown
The core structure of the book has 4 parts; Context, Complication, Implication and Conclusion. It follows one core case study throughout the book.
Part One: Context. Situation. Outside-in.
In part one we look at the organization and try to describe the situation. The question is, what is there in an organization's structure, culture and rules that make integrated planning difficult?
Chapter 3 takes an outside-in view. What can the history, and annual reports tell us? What is the architecture of the head office trying to say? What cultural artefacts are there? What is their apparent pain or business driver? What are the relevant reasons for driving increased integration and collaboration? What would IP do for them?
Chapter 4 looks at what motivates individuals to work for an organization. What are the characteristics of the workforce? The culture? The dress code? What is it like to work there? What can this tell us about people’s readiness for change and their openness to collaborative planning activities? Is there a mission statement on the wall and what does it say? Do people refer to it?
To close, we look at the components, tools and processes that we expect to find to support integrated business planning. I talk about types of data and consider the challenges that are faced in getting the right data to support integrated planning.
Part Two: Complication. What is really going on?
From being observant outsiders, we now move to the role of psychologist. Part Two looks closer at the organization and the behaviour of individuals, considering the complications. To think about what is happening under the surface, we put the organization on the couch and ask, what is really going on?
In Chapter 6 considers the contradictions in what the organization says and what it does. What are the key uncertainties in the organization? And how do people react to them? We also think about values and how they matter.
Chapter 8 looks at the first half of the life cycle of an initiative. We will review the players and how interventions play out working through two phases: conception and inception. We will consider how the dynamics of these phases can result in the burden of addressing the thorny issues being shifted to the later phases.
Part Three: Implications. Interpreting our findings.
Through observation and inquisitive conversations, we have gathered data on the organization. Now, in the role of detective, we retire to 221B Baker Street and consider the implications of our findings.
The first question is about the nature of the problem we are tackling. The next step is to think about the implications of what has been found. In most organizations, top-down interventions or organizational change programs are doomed to failure. What must be patched together will be a messy solution, which will need to recognise and harness social complexity.
Part Four: Conclusions. Decisions. Shaping interventions.
The final part is where we need to make some choices about what can be done to address the problems encountered and think about what to do next.
In this phase, we will consider the elements that are needed to build a change platform. There is an approach outlined on how to formulate interventions for success in integrated planning by building a platform for change.
Chapter 12 first summarises the points that we have discussed so far and draws some conclusions.
In chapter 14 we think about the design principals for a framework for intervention, detailing out a proposal for successful integrated planning. I look at an approach that uses four platforms: mobilize, socialise, systemise and learning, describing who owns and drives each of the platforms along with a high-level description each platform.
Wrap-up: Case study re-imagined. Next steps.
The next step is a thought exercise in where the approach in Chapter 14 is applied to the case study that we have followed throughout the book.
We imagine a different outcome and, unburdened by the constraints of the real world, sketch out a successful outcome.
Finally, there is a summary that suggests that this is very much only the beginning of an exercise to improve implementations. Some follow up activities are suggested and some resources and forums are explained.
About the Author
Richard Lloyd lectures at a number of universities on subjects relating to the supply chain and change. Successful Integrated Planning for the Supply Chain is an invaluable guide for anyone who needs to implement change in the supply chain.