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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

January 16, 2013

Strategic Planning - The Key to Improving Performance

Managing without a Strategic Plan is a Little like Playing Pinball - Being Slapped from Pillar to Post

Looking back it seems that disasters of the type that can upset normal business routines be they superstorms like Sandy, political like Obama Care, “the fiscal cliff” fiasco, or even security threats and global disturbances that disrupt trading, are occurring more frequently and have a longer lasting effect on business. While these disturbances are for the most part unpredictable as to when they will occur, we know that “stuff” happens.

The need for strategic planning is obvious enough. Waiting until something serious goes wrong then springing into panic mode often leads to costly and time consuming missteps. Given today’s rapidly changing, quick response global marketplace, strategies that worked in the past are probably not going to be relevant going forward.

As many consultants and industry experts have pointed out, improvement programs and initiatives need planning. Setting up supplier relationships, defining sourcing philosophy and processes, requires planning. Creating customer relationships with meaning, depth, and purpose (and understanding their business imperatives) calls for still more planning.

Holste Says:

Strategic planning is the cornerstone of any change initiative, whether technological, process, or cultural.
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The pace of change today is faster than ever before. Oftentimes unexpected events happen. The key to survival is adaptability – combining the ability to observe new trends and/or abnormalities’ together with a willingness to make appropriate changes. Those companies who cannot quickly respond to change and adapt are unlikely to survive.


Don’t Let Daily Tactical Issues Subvert Strategic 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 strategic planning is closely related to operations.

For example: within the DC labor planning 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.

Strategic planning is the cornerstone of any change initiative, whether technological, process, or cultural.

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?

Most industry consultants agree that 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.

A great place to start your logistics planning process is next week in Chicago at ProMat 2013 (January 21 thru 24). You can quickly check it out and pre-register at


Final Thoughts

There is at best no point, and at worse negative value, in having a plan just so you can say you have one. 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 “flesh-on-the-bones” strategic continuous improvement planning on which to base them.

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