Building Outside-in Planning Processes to Drive Value

An outside-in supply chain planning process improves Forecast Value Added (FVA) by 10%, removes bias, improves the time to know by 150%, and decreases the bullwhip by at least 50%. The deployment of an outside-in model always beats an inside-out model, reducing process and data latency while improving the organization’s ability to make decisions at the speed of business. The report that published today is based on three years of testing and facilitated workshops with over two hundred business and technology leaders.

Today's planning processes are inside-out. The improvement focus of the industry is on engines and improving the math. In developing the outside-in planning taxonomy, the focus is on redefining/improving work. The goal is self-service of business leaders to use planning data.

Why Be Market-Driven?

Only 6% of companies beat their peer group on growth, Return on Invested Capital, Operating Margin, and Inventory Turns. In 20 of the 28 sectors that we track, there is continued margin and inventory turns degradation. (This degradation occurred even before the pandemic.)

Most companies focused on enterprise data and traditional optimization lag their peer groups with circular metrics patterns.

Continue the Learning and Build a Guiding Coalition

In an effort to build a guiding coalition to drive improvements in supply chain planning, I will be teaching a class in February/March 2024 for business and technologists to continue their learning. Here is some background:

Overview: There are two classes—one in the Americas and one in Europe/Asia. The Americas class meets on Mondays, and the European/Asian class on Tuesdays. The sessions are virtual with no registration fee.

Each group has a private LinkedIn Group to share content and drive networking/conversations. The two groups meet for an open mic session on Fridays for 2 hours. The open mic sessions allow sharing and open discussions/networking across continents.

 The design of the class is 75-80 participants per class. Each class is limited to 40 technologists. Ideally, the technologists are product management and implementation experts. The business users need to be employed by a manufacturer/retailer or distributor in either planning or supply chain management. Each must have a minimum of four years of experience. Let me know if you want to register anyone in these classes. Just drop me a DM in Linkedin with an email and a bio.

Study groups combine technologists and business users in groups of five. The goal is open discussion and enhanced learning.

Curriculum

 February 26/(28) Class 1. What is supply chain excellence?

A review of case studies of Supply Chains to Admire award winners. Discussions with the supply chain leaders that outperform to understand why they believe they beat their peer group sector. For more insights check out the Supply Chains to Admire summary deck.

Focused learning. Discussion of engines/models/taxonomies. Evolution of planning and the current taxonomy.  How can the taxonomy be redefined based on the art of possible? How does this redefine work?

Homework: What Defines a Good Plan?

March 4/(6)       Class 2. Aligning for success. Measurement.

How do we align organizations by the redefinition of metrics? What is value? What is performance? What is improvement? Open discussion on the sharing of work by Georgia Tech professors on balanced scorecard options to improve value. Which metrics make the most sense by industry segment?

 Homework: How would you use a balanced scorecard in planning to improve value-based outcomes?

 March 11/(13)   Class 3. Mapping demand streams.

The transition from a time-phased data paradigm to conceptualize demand as a value stream. Learn the language of outside-in-demand processes. (Demand latency, market drivers, shaping/shifting, baseline demand, bullwhip impact, etc).

 Homework: Using COV and volume as insights, map the river of demand for an organization. Build a river of demand.

 March 18/(20)   Class 4. Bi-directional orchestration and redefining supply

Understanding variability and the impact of the bullwhip. Sensing, translation, and process latency.  How to define and drive bi-directional orchestration. What is the role of inventory in the outside-in process? Hear directly from the testers. What can we learn? Unlearn?

 Homework: Build a use case for bi-directional orchestration and an unlearning matrix.

Build a taxonomy for an outside-in planning process.

 March 25/(27)   Class 5. Wrap-up and next steps

Sharing of homework and insights. How do we drive unlearning and build a guiding coalition?

 Homework: Write a Wall Street Journal article.

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See Me Speak

 I am speaking at the virtual gathering of global Food & Beverage professionals at TraceGains Together on January 24th and 25th. TraceGains is a marketplace to help business leaders sourcing ingredients better align with product lifecycle raw material requirements. I hope to see you there. Save your spot today!

All the best!

Lora

All the best!

Lora