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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

December 28, 2011

Strategic Planning Is The Cornerstone Of Any Change Initiative

If Past Business Practices are No Longer Relevant – Then What’s The Plan?

Planning is a critical part of the success equation in the management and execution of today’s rapidly changing, quick response global supply chain. As 2011 draws to a close, many logistics professionals are thinking about the near term future and asking themselves – “What’s the plan?” This is a reasonable concern given the uncertainly of the current business environment.

The need for forward planning is obvious enough. Waiting until something goes wrong and then springing into corrective action mode won’t cut it. Intolerant customers will quickly jump ship. Business strategies that worked even in the recent past are probably not going to be relevant going forward.

Holste Says:

The key to survival is adaptability - combining the ability to observe new trends together with a willingness to change.
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As many consultants and industry experts have pointed out, improvement programs and initiatives need planning. Setting up supplier relationships, even defining the sourcing philosophy and processes, requires more planning. Creating customer relationships with meaning, depth, and purpose (and understanding their business imperatives) calls for still more planning.

The pace of change today is faster than ever before. The key to survival is adaptability – combining the ability to observe new trends together with a willingness to change. Those companies who cannot adapt are unlikely to survive.


Don’t Let Daily Tactical Issues Subvert Strategic Planning

Planning is the cornerstone of any change initiative, whether technological, process, or cultural. Within the DC planning for labor is vital for reasons of both cost management and service performance. On a weekly or daily basis this needs to be done for flexible operational staffing and to meet expected peaks and valleys of activity. It also needs to be done for longer planning horizons, to prepare for growth as well as the inevitable changes in customer order profiles and SKU mix. Personnel recruitment, training, development, and retention are all strategies requiring planning.

Busy DC executives and managers are so often involved in tactical issues (getting things done) that it becomes easy to overlook the need for planning at the strategic level. However, growth oriented companies are the ones that are committed to continuous improvement strategies, accompanied by superb plans. In those companies planning is closely related to operations.

The following is a list of critical planning questions (provided by The Progress Group ), all with operational implications, that should be addressed in a comprehensive strategic continuous improvement plan.

  • What changes are contemplated by and for existing customers?
  • How will these changes influence marketing plans and day-to-day operating relationships?
  • What changes are required to successfully approach new customers and markets?
  • What changes are underway or being considered by the competition?
  • What are the most likely industry trends and how will then affect current practices
  • What are the company’s internal and external vulnerabilities relative to new demands
  • What are the most critical immediate issues facing the company?
  • What changes (economic and regulatory) will most influence the company’s profitability?

Unless strategic planning drives continuous improvement, it may have only marginal value. In fact if the plan does not drive continuous improvement it can be counterproductive. There is at best no point, and at worse negative value, in having a plan just so you can say you have one.

Final Thoughts

Most hands-on managers eventually come to realize that there may not be a lot of point in trying to develop tactical plans if there is not real, flash-on-the-bones strategic continuous improvement planning on which to base them. If that’s the case, perhaps the only tactical plan that makes sense is to stay in your foxhole and keep your head down.


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