Planning Horizons: Are you Minding the Gaps?

Recently, a client of mine expressed their disappointment with a planning implementation.  I would be remiss not to mention that another consulting firm had implemented this disappointing solution. Regardless, the issues as described were that users did not trust the data, and the granularity of that data was insufficient for a some of its business.  I would say these are fairly common grievances.

Granularity: very typical.  Either a miss in project requirements or users trying to do more than what the system was intended to do.  If the project requirements were off, then shame on the client.  If the users’ expectations were too great, it could be readily resolved with improved Change Management.

Data mistrust is a different matter.  I could be data quality or the overall data strategy is poor.  Yet, after review, it turned out to not be a data issue whatsoever.  The root cause was a gap in the company’s planning solution.  They lacked an Operational Plan in the 0-3 month horizon.  It’s not their fault entirely, because a good system integrator would never have moved forward with the implementation as it was proposed.  But let me give you the background in how a situation like this can develop.

Several years ago, a consulting firm was brought in to implement best practice processes around S&OP, which it did.  The processes were sound, and with the usual best practice of focusing S&OP in the Tactical (4-24 month) plan.  That is the time horizon during which leadership can truly make value-adding decisions.  Then they brought in a system integrator to implement a best-in-class planning solution.  And, while I would criticize this integrator for not doing enough due diligence around the proper planning level, the implemented solution matched up well with the process that had been defined.  So if both groups did a reasonable job, then why was the client so disappointed?

Because they were only focusing on solving the Tactical plan questions and had no process or solution for the Operational plan.  There were local spreadsheets being used for the Operational plan; however, there was no means of consolidating these plans and including them in the Tactical planning solution.  They had a gap in their planning horizon.

One of the biggest sins that I see in planning solutions is having a gap in the overall planning horizon.  All businesses have multiple plans across the planning horizon, and if done well, each plan builds upon the previous one.  The challenge is each plan is trying to answer different questions, thus the detail and model needed for each plan is different. No one-size-fits-all here, but typically these plans are (from left to right): 

•               Schedule - typically 1-2 week:  Hourly or Daily buckets to provide an optimal, operational schedule.  Tells the factory floor what to make and when.  Cost to change is extremely high, and this schedule is normally “locked” for a period.

•               Deployment plan (not shown above)- typically 1-2 week, maybe longer depending on transport arrange time.  The two goals are: 1) distribute product scheduled for production (move product from the manufacturing site if storage is not available), and 2) replenishment of the distribution network (ensuring you have the right product at the right place).

•               Operational plan- typically 1-2 months: Daily or Weekly buckets.  Aligning supply to demand with an emphasis on operational efficiency.  Usually involves campaigning/grouping of products to minimize changeovers.  Provides visibility to manpower gaps that may take several weeks to bridge.  Cost to change is moderate in this horizon and usually involved expedited shipments or overtime. Note: The first 2 weeks are inherited from the Schedule or Deployment plan.

•               Tactical plan- typically 3-24 month horizon: Weekly or Monthly buckets.  Aligning supply to demand with Rough-Cut Capacity Plan (RCCP) to enable S&OP level decisions.  This is the wheelhouse of S&OP/IBP forums.  It’s where the Cost to change is low, but the value contribution is high.  Best with aggregated data to simplify the decisions that need to be made.  Note: The first 2 months are inherited from the Operational plan.

•               Strategic plan- 2-5 years: Yearly buckets.  Goal is to align Capital Investment planning to future needs.  Typically tied to critical assets.  Note: The first 2 years are inherited from the Tactical plan. 

Now, every business is different, and for some, these plans are irrelevant.  For example, a distributor may not need a Schedule, but likely would need a Deployment plan.  The plans that most industries require are Operational & Tactical.  Ignoring either of these will likely lead to frustration within your organization.  Lacking an Operational plan results in an overall lack of confidence in what is happening today.  Lacking a Tactical plan results in a very reactive organization.  Scheduling and Deployment are very localized and short-term, thus their impact on a Tactical plan is minimal.  Strategic plans are typically performed in spreadsheets and assembled annually, but they are only slightly reliant on Tactical plans and not at all reliant on Operational plans.

So why are we bothering with the elementary school lesson on planning horizons?

Because if you have a desire to implement a technology solution, you need to ensure the entire planning horizon is covered in some form or fashion.  And, if you have gaps, then you need to address them in a logical order.  Otherwise, you’re building a house of cards.  For example, you need to have an Operational plan before you work your way out to Tactical and Strategic planning.  Implementing a Tactical planning solution without an Operational planning solution will fail.  Ultimately, you will end up with planning results that lack credibility. It’s the proverbial cart-before-the-horse scenario.  

Similarly, if you are going to implement a detailed Operational planning solution without Deployment, you’d better know what you are getting into.  I’ve seen many organizations frustrated by a gap in the planning solution at a detailed level.  Think the entire solution through and begin the process from left to right.

If you find yourself troubled with your current planning process or systems, give me shout at rob.jones@bullwhipsolutions.com

#SupplyPlanning, #S&OP, #IBP

It's all about People...

Successful I/T implementations hinge on four pillars: People, Process, Tools & Data.  So, what is meant by “People” in I/T implementations?  

From an organizational perspective, people are vital to any company’s success.  However, for an I/T implementation, the latitude to select the end users within an organization is generally not an option.  So, if we cannot change the people, then what does ”people” in this context really mean?  For Bullwhip Solutions, “people” means ensuring that the end user is prepared and ready to use the new and changing technology in the proper manner.  This concept is often referred to in many ways, such as Change Management, People Transition, Implementation Management to name just a few.  Regardless of what’s it’s called at your organization, if you attempt to implement I/T without bringing the end user along for the ride, you’ll quickly find the car in a ditch. 

Change Management is a pretty nebulous concept.  In my earlier days, I never gave it enough credit or attention.  As a result, I found myself often frustrated by the end user.  Why didn’t they use the beautiful new system that we just implemented?  Clearly, it’s an improvement over the old one.  Yet time and time again, we would find end users reverting to their old systems to get their job done. 

Personally, I experienced this phenomenon as a passenger on a cancelled airline flight.  I’ll keep the airline’s name confidential, but it was around Christmas, and the weather was horrible.  Our flight got cancelled, and here we were, waiting in line for the gate agent to help rebook us.  When we finally reached the desk, I asked if I could see the system she was using for the rebooking.  I was floored!  It was an ancient, 1980’s IBM mainframe system (you know the black screen with green block letters).  The gate agent had to type in a 20+ digit line that included our ticket number, the date, where we were & where we wanted to go.  All in strange codes and embedded into this long, single line of code.  There was even a time when she mistyped one letter and had to retype it. 

When I asked her if there was any newer software, she pulled up another application that looked much improved, more like the typically flight booking website you are familiar with.  When I asked why she didn’t use the newer software, she simply shrugged her shoulders and said, “I dunno, suppose I’m just more comfortable with the old system.”  Wow!  That is an example of a complete failure in I/T implementation, and further highlights the importance of Change Management. 

The “build it, and they will come” strategy just doesn’t work for I/T. 

So, how do you accomplish effective Change Management?  Well, below is one example of how to manage it. 

First, you must understand what Process changes are happening.  Process changes are the fundamental reasons behind why things are done, and they often add to the complexity of any new technology implementation, therefore they must be fully understood.  If you have significant Process changes, most of your change management effort will be explaining the Process changes rather than the I/T changes.  Do not underestimate the impact of Process changes and do not underestimate the time it will take your organization to make these changes. 

Second, you must understand and appreciate how the work is getting done today.  How is the end user doing tasks today in the system?  You may not agree with what is being done today.  It may be low value-add activity, but you cannot ignore it simply because you don’t believe it adds value.  If somebody is performing the task today, you need to be aware of it and consider it, because this knowledge is used as a basis for the change management strategy.  It’s called the “As Is” state. 

Third, you must know how the work is going to be done in the future.  Once the new technology is implemented, how will the end user engage with it.  This is called the “To Be” state. 

Finally, we connect the dots between the “As Is” and “To Be” states by figuring what specific education, training, or advocacy work needs to done to get an end user from “As Is” to “To Be”.  Usually, this involves a lot of discussion and communication over a period of several months, depending upon the level of change.  Ultimately, it’s your map to help the end user transition from old to new. 

In the end, People must be guided, educated, and trained for any implementation to be successful.  Simply sending an email with an attached user manual, however, just doesn’t cut it. 

Before you trot off and start conquering your implementation, it is vitally important you understand that there are many Change Management tools available.  Above is one example.  Think of Change Management like the tools in your tool chest.  You never use all of them for a specific task.  In some instances, you may only use one or two of them.  Ultimately, you need to understand what the various Change Management tools are, what they do, and how best to deploy them.   

Only then can you develop a Change Management plan that will truly prepare the People and ensure the success of your I/T implementation. 

If you still have questions, give us a shout at rob.jones@bullwhipsolutions.com. 

My grandfather uses technology, so why care about People?

So, when someone says that successful system implementations are about People, Process & Tools, what do they really mean?  In previous blogs, I’ve made the argument that it’s really People, Process, Data & Tools that form the four pillars of successful implementations, but I’m getting off-track. 

Let’s take a step back. 

Tools?  We get that.  It’s the computer technology that we are working to implement.  It’s the new whiz-bang thing and what most organizations spend their time focused on and/or complaining about. 

Process?  We get that.  It’s the “why” and “how” we get things done.  It’s the ideal way in which we want work performed in the organization. 

People?   What exactly do we mean by that word in this particular context?  Obviously, you need people, but there’s more to it than just warm bodies. 

I will argue that there are two aspects to People, both of which are important.   

One aspect is the process by which you select and retain the right people and identify the right roles for them.  For most companies, this process is most likely a function of Human Resources.  Ultimately, if you have poor people selection and retainment, then your organization will suffer.  Maybe not today, but believe me, your organization will ultimately suffer.  When you have an I/T implementation, it’s important to carefully select the right people for the project.  However, once the project team is set, there’s really nothing else to do.  

The other aspect, and the one I feel is most vital, is ensuring that the people in your organization are prepared and ready to simultaneously execute both the Process with the Tools as prescribed.  This process is known by many different names, such as Change Management, People Transition, Training, Onboarding, etc.  In my experience, this aspect of People is often the root cause of the majority of failures in Process and Tool changes over the years.  Because it does not matter how robust your Process is or how powerful your Tool is, if your People don’t know how to use them effectively, you will fail!  At the heart of a successful implementation are end users who know what is expected of them and how they perform what is expected in the new system. 

And it is not just about implementation.  It is also about sustainability over the long haul. Ensuring that a sustainable onboarding capability exists to educate and train new users is vital.  

Do you remember that YouTube video of the grandfather who uses his new iPad as a cutting board?  I love that spoof, because it exemplifies this aspect of People so well.  You’ve just put an iPad, a technological advance that revolutionized our world, into the hands of your grandfather.  Does he understand how to use it?  How could he not?  You’ve just bought the best tablet on the market and put it into the hands of your capable grandfather.  There’s no need to step him through it.  It's intuitive.  So, you decide to leave knowing (a bit smugly) that you’ve just improved your grandfather’s life immensely.   

Once you’ve left, you grandfather inspects your gift with a bit of skepticism followed by a bit of confusion.  However, he does notice the nice clean, hard surface of the iPad.  As he looks at his old, worn-out cutting board, the intended use is obvious to him. 

Never underestimate to the degree that tools can be misused when proper onboarding is not done.  Not just during implementation, but well after.  It’s the continual, slow brain drain of organizations that ultimately create messy systems.  Douglas Adams said it best,    

“A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.”

I’ve written that one on my office wall. 

Occasionally, somebody can luck into figuring it out, but often, they’ll end up chopping carrots on an iPad! 

So, the next time you're sponsoring or leading a project to transform your Processes or Tools, whether it be IBP, S&OP, Demand Planning or Supply Planning, make sure and keep People top of mind. 

In my next blog, I’ll go through some affective approaches to Change Management that can help ensure a successful implementation. 

Introducing Bullwhip Solutions!

After 25 years of working at The Dow Chemical Company, I have decided that now is the time to start a new chapter.  It’s been in incredible experience and throughout the years I have had the pleasure of working on so many challenging projects with a ton of amazing people, a lot of them that I will sorely miss.

When my daughter recently asked if I would do it all the same, I had to think about it.  The roles that I’ve most recently held at Dow are closer to I/T than anything else, a far cry from the production engineering where I got my humble start back in 1993.  It’s my backgrounds in manufacturing principles, S&OP, and supply chain combined with solid I/T skills that have provided me with a unique skillset.  If I’d studied I/T in college, I never would have had those experiences and certainly wouldn’t be doing anything remotely similar to what I am doing today.  So, would I do it all the same? Absolutely! I just may have been a bit less patient about matters.

From the very beginning of my career, I was involved in S&OP.  In my first position as a plant engineer, I took on the horribly named role of “Business Needs Resource Engineer.”  Just rolls off the tongue, doesn’t it?  This role, however, was transformative for me.  The role was to engage with the S&OP team; understand what assets would bring the greatest benefit to the business in the near term; identify de-bottlenecking opportunities in these assets; and ultimately work to resolve those bottlenecks. The expectation was to have quick wins in the plant aligned with the immediate needs of the business. It was a wonderful role and opportunity that taught me how S&OP is only a meaningful process if it is connected to actual work.

I reflect on this role now and realize how many organizations have it wrong.  For many organizations S&OP is just a series of meetings and reviews to be prepared and navigated.  If you’re lucky, nothing bad will come about.  It can and should be so much more.

A little later in my career I worked in a toll manufacturing business.  Going in, I did not have an appreciation for what these folks do on a day-to-day basis, but “chaotic” doesn’t even come close to describing it.  Every day the plant was processing and handling different chemicals in different ways.  Imagine if your cars controls changed every day.  For example, your right-turn blinker moves from the handle that you’re familiar to a button on the radio.  That is the sort of change the folks in this industry face every day.  To manage it, you would have to get out the instruction manual and read what lever controlled what each day before heading off to work. What I learned, and was amazed by, was the operators and technicians had no problem dealing with this amount of change.  They were used to it.  Change was an integral part of the job, and they accepted it.  As much as we want to keep things the same for consistency and comfort, change is inevitable and a very good thing.

More recently in my career, I’ve led huge global I/T implementations and learned one core principle:  the importance of a balanced approach.  I’ve seen teams focus all of their efforts on the technical I/T solution only to find the data maintenance strategy not sustainable.  I’ve seen teams push massive process changes upon end users with no change management strategy only to find that nobody changed their behavior.  And I’ve seen technologies that just did not work.  Through these observations and my own personal failures and wins I’ve learned only a balanced approach works when implementing new I/T solutions.

As I approach this next chapter in my professional life, it’s only appropriate that I take these experiences along with me and leverage these valuable lessons learned as I launch Bullwhip Solutions.

I look forward to putting these three principles into practice for my clients, which include:

• Integrated Business Planning must be connected to how work gets done
• Change is possible and inevitable but must be managed carefully.
• People, Process, Tools and Data are all required to successfully operate Integrated Business Planning

I’m incredibly excited to leverage my 25 years of experience to help other companies improve by optimizing what they already have and adopting the tools that will take them to the next level.  This is truly where my passion and talents collide.