Looking Over the Visible Planning Horizon

This is an excerpt of the original article. It was written for the September-October 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2014

2014 marks the 10 year anni­ver­sary of the Gartner Supply Chain Top 25 ranking. This year we have a diverse set of large, global companies with mature, demand-driven supply chains. There are lessons to be learned from these supply chain leaders, many of whom have led their industries over the past decade.

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I met a young woman at a semi-conductor manufacturer who wanted advice concerning Sales and Operations Planning (S&OP) processes. Her Chief Operating Officer (COO) had asked her to start a process among executives. Her main concern was that the COO wanted it to focus exclusively on the immediate fiscal quarter.

This planning horizon is too short for executives to have meaningful future impact.

Sales and marketing activities can’t be significantly changed, supply is relatively limited, and the S&OP meetings are too operationally-oriented. I advised that she should focus on getting a routine process started and eventually convince the COO to move the planning horizon out to at least six months, and possibly up to 18 months; consistent with typical S&OP processes.

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