Supply chain planners must develop an outside-in mindset to support business objectives

As supply chain planning becomes increasingly mature, planners must change their focus and develop an outside-in mindset. This means looking first at the business objectives of the company, and then aligning strategies and processes that support those objectives, according to Gartner, Inc. At the recent Gartner Supply Chain Planning Summit held in Denver, USA, from 4-5 November, the firm’s analysts explained how supply chain planning leaders can elevate the planning function to prepare for the future and effectively support business objectives.

A recent Gartner survey found that 84% of companies already have a sales and operations planning (S&OP) process in place. “This is proof of how the planning function has matured. However, this is not the end of the journey,” said Marko Pukkila, Vice President and Team Manager with the Gartner Supply Chain Practice.

Thanks to advanced technologies and algorithms, planners now have access to more datapoints than ever before, and forecasts have become more detailed and frequent. However, this is coupled with higher expectations among leadership and stakeholders, according to Gartner. Therefore, planners now need to look at all the data and draw conclusions about the future risks and opportunities. Rather than reactively responding to what the forecast says, they should move towards actively supporting the overall business objectives.

“Outside-in mindset”

Gartner calls this an “outside-in mindset” and has outlined three steps to achieve the transformation: 1) Realize that the time to transform is now, 2) Refocus the planning team to business outcomes, and 3) Become the orchestrator of success.

In Gartner’s view, supply chain planning leaders are perfectly positioned to align the different parts of the business behind a common plan that supports the company’s overall success. “The thought behind an outside-in mindset is to be aware of what is happening around you – be it a business objective or an upcoming recession – and use the planning function proactively to set up internal processes that are optimized for what will happen in the future,” Pukkila concluded.