Is Planning Even Worth It?

If you’ve gotten this far, I’m guessing you have a strong opinion on this topic. Considering how disruptive the operating environment has been for supply chains these past several years, it might be tempting to just give up on predictive planning. There are so many factors that can make us wrong in any time horizon.

Recently, I spoke with a colleague who is crafting a presentation for Gartner’s North American Planning Summit. In some ways, it felt like a pep talk to a beleaguered group.

Many supply chain organizations are perpetually chasing their commercial partners to engage and improve the demand forecast. They’re also managing disappointment from those partners when supply doesn’t line up, often due to causes outside the company’s four walls.

This is partly an influence game. Supply chain planners are often very skilled at mathematics and operational minutiae, but they typically haven’t mastered the storytelling skills required to make business cases for earlier, higher-quality engagement and for making strategic capacity investments to support future demand.

Others argue that supply chains just need to be more adaptive and agile. I remember a well-known CP CSCO taking this stance as we exited the pandemic period. He concluded it was better to spend less time guessing about what comes next and more on the ability for their supply chain to pivot quickly.

This approach can work, but only after the CFO and business leaders agree to invest in additional and flexible sources of supply. In the spirit of not letting a good crisis go to waste, a silver lining to this year’s uncertain trade environment is that it has at least unlocked new sourcing options.

Unfortunately, uncertainty about where tariff rates will ultimately fall has also put some companies in a near-term holding pattern for investments. More complex, capital-intensive industries need to place their bets years in advance.

Many of the operations leaders in our community from high-tech, industrial and life sciences companies tell us they’re investing in new plants. To ensure they have the flexibility to support local demand, and to reduce exposure to future tariffs, these leaders are asking their strategic suppliers to relocate alongside them. In some cases, this expansion will also provide fungible, global capacity.

How are some companies able to place such large bets while the “wheel is still spinning?” As a member of the executive team, your CSCO needs to align supply chain decisions and behaviors to corporate North Star goals and strategies, independent of day-to-day changes in the operating environment.

Recently, I sat in on a strategic plan review for one of Gartner’s Supply Chain Top 25 companies. I was struck by the fact that they’d just added a 10-year long-range plan on top of their existing three-year horizon plan.

When we pressed them on why they added an even longer-term plan when the environment is so uncertain, they responded with a rhetorical question of their own, “How can we lead if we don’t set a long-term vision?” This company’s longer-term plans put stakes in the ground but also had healthy doses of scenario planning and an ability to reset based on trigger events, along with a regular refresh cadence.

Another common theme that surfaces when discussing “unlocks” for decision uncertainty is meeting multiple business objectives with the same investment. These outcomes often support improved customer responsiveness, supply resilience and the ability to hit corporate sustainability goals.

What’s a leader to do in today’s volatile, uncertain, complex and ambiguous (VUCA) environment?

In summary, start by investing in organizational storytelling skills. Use them to align plans with your company’s longer-term North Star strategies and frame investments in the context of addressing multiple business objectives.

And, while not the primary focus of this exploration, continuing to build collaborative relationships with up- and downstream partners is always a winning play.

May the odds be ever in your favor.

Stan Aronow
VP Distinguished Advisor
Gartner Supply Chain
Stan.Aronow@gartner.com