By: Edward Blickstein, Managing Partner at TSC
After posting the first article a few days ago I heard from a colleague and we discussed strategic planning which led to this 2nd posting on this subject. So here is the posting again with the influence of that discussion.
As previously stated, one of least satisfying corporate processes is strategic planning. We have observed this and heard about it from many of our clients. Senior as well as mid-level executives are often disappointed and criticize the planning process as extremely time consuming although sometimes very necessary, bureaucratic, and not all business and market issues are addressed with insight and the right attention particularly in regard to rapid changes brought on by technology, changes in customer buying factors (i.e. one order, one delivery) and necessity for high satisfaction levels. The takeaway from this is that strategic planning needs to be done with market intelligence (customers, key suppliers, market research) continuous collection and analysis of their own big data and supported by the right technology and business leaders that pay very close attention to what change and challenge their customers face in their markets. But, what about the supply chain?
Now, much more than “yesterday”, companies need to devote time to supply chain strategy and recognize the overall importance of this element in corporate strategic planning. Companies succeed or fail based upon supply chain performance. This is more evident than ever when looking at a company’s financial performance.
Key to achieving strategic preparedness takes a structured, organized thought process to define and consider possible threats, disruptions, as well as opportunities—which is, for want of a better definition, traditional strategic planning. In short, the problem isn’t the strategic planning exercise itself, it is that most companies lack an effective strategic-planning process that is deep enough instead of mostly a high level approach and often focused on procurement alone.
Although there is no one-size-fits-all approach to strategic planning, we have found that the companies that get the most benefit from their strategic-planning activities have these things in common:
- They assess their past performance with detail, what they have learned from their customers supported by interviews, surveys and indirect feedback, what their customers’ forecast and plans are for the next 3-6 years.
- The above point also applies to suppliers and contract manufacturers who have their own set of challenges and issues that could cause significant disruption.
- Then they explore-develop their strategy at distinct time horizons shown in a high level detailed timeline.
- They constantly challenge their business units, the corporate supporting staff, engage in creative exercise and research and stimulate the strategic discourse.
- They engage the broad organization and not just the business unit leaders to develop the strategic plan.
- They invest in execution, detailed measurement, analysis and continual snapshot monitoring.
- They remain inquisitive in discussions with customers and key suppliers and pass on insights and notes to the strategic planning team.
- They make modifications to the strategic plan annually or as often as needed.