Supply Chain Planning vis-a-vis Supply Chain Execution

Supply chain planning and execution are two sides of the same coin. There has to be tight integration and to/fro feedback loops be it information or data in its most current state is required. The question I am posing is in these current times particularly with the pandemic and increasing geopolitical trade challenges, supply chain execution has taken a precedence over planning.

There could be multiple reasons why this must be so and based on my experience and what I have been observing I feel the following reasons are playing a role:

1. Difficulty in generating a realistic mid to long-term forecast. Well, there are multiple articles and information out there in terms of how to account for the pandemic related dip or spike depending on the situation, there is no best way to predict and come up with a reasonable 12-18 month forecast currently. As a result of this, the focus from a supply chain planning is perspective is more replenishment oriented for MTS supply chains as well. MTO supply chains anyways have been traditionally replenishment oriented with a shorter lead time horizon driven by actual orders more than the forecasts or combination of orders and forecasts.

2. The supply networks are being re-configured. Companies are adapting their supply chain networks given that more countries are becoming inwardly focused from a global trade point of view and there are multiple challenges affecting the free flow of products without boundaries so to say. Also, the pandemic situation has impacted the existing global sourcing networks and the supply base across companies.In such a situation, it is but obvious that first the companies would like to stabilize their supply networks and then start planning with the new networks. From a supply chain planning perspective, the companies could use the historical volume and share of business data plus a shorter term forecasted demands and customer orders to plan on the new networks. However, the re-configuration of physical supply chains be it freight, transportation routes and warehouse locations might be a bottleneck in terms of the continuing with the as-is supply chain planning and sourcing processes.

3. Lastly, the companies are entirely re-thinking how the supply networks of the future would be and are preparing for that transformation journey. In that regards, the current challenges have perhaps pushed many companies outside of their comfort zones into thinking and building next generation supply chain capabilities. As a result, the companies are focusing on creating the strategic roadmap and securing the funds to kick-start supply chain transformation initiatives. With this being a strategic priority, I think the focus is not on supply chain planning per-se but rather on executing to fulfill the existing customer demand as best as they could.