Beauty in Simplicity: Change Management Solutions for Complex Supply Chain Processes
By: Rola Losco
The difficulty of making trade-offs is not a new challenge for organizations. In his letter “Moral or Prudential Algebra,” Benjamin Franklin outlined his approach to this obstacle more than 200 years ago. Economic theory focuses on how we distribute scarce resources and negotiate opportunity costs. Converting theory into best practice can potentially be a futile exercise without the proper toolkit and application.
The problems of navigating complex business decision-making processes give even the most competent organizations pause. This article will examine how an effective change management strategy can streamline your decision-making efforts.
Micro: Navigating a myriad of systems, tools and processes
Some businesses rely on systems that can’t effectively gather, consolidate and interpret the multiple data streams needed for a coherent planning process. Others rely on a multitude of systems with no interconnectivity. It’s bad enough that some cross-departmental data doesn’t speak the same language — if your planning platforms can’t communicate, you’re compounding the complexity of an already-difficult task.
Ask yourself: Do any of these vulnerabilities sound familiar when you attempt to find the necessary clarity for your planning strategy?
Trying to make sense of data from multiple spreadsheets.
Attempting to consolidate this information across multiple applications.
Creating an executable strategy with time as the ultimate constraint.
Macro: Dealing with a volatile environment
The ever-evolving nature of your business operations isn’t necessarily conducive to the forecasting process. Because weighing the fluidity of your chosen market against the rapidly changing tastes of your consumer base is a balancing act, trade-offs become a decision maker’s currency.
Many concessions need to be made when attempting to consolidate the needs of your various departments while gauging your customer demand. When devising an effective strategy, have you ever run into these roadblocks?
There’s rarely a single goal: Decision makers usually pursue multiple goals at once.
These aims have different KPIs and measures for success.
The dilemma of opportunity cost: What is gained by pursuing one goal and lost by not pursuing the alternatives?
A solution that accounts for all of these challenges may sound too good to be true. In reality, the path to a better budget exists: Here’s how your business can harness the power of a connected planning resource to streamline the forecasting process.
Streamlined efficiency
Sometimes a straightforward approach is best. As Ben Franklin famously said, “Make a pros and cons list.”*
* In actuality, Ben said “By the word simplicity, is not always meant folly or ignorance; but often, pure and upright Nature, free from artifice, craft or deceitful ornament.”
In the interest of being concise, we’ll focus on his intended interpretation.
Here are some effective ways you can reduce the noise and clarify the objectives of your complex planning strategy:
Define your priorities. What is your most pressing concern or consideration? Weighing its value against the others can help determine your primary focus.
Standardize the baseline of comparison. Create an effective and universally applicable standard by which all of your various objectives can be measured.
Rank the priorities/objectives. Now that you’ve narrowed down your prime objective, where do the others fall in terms of priority? What can wait, and what needs to be addressed immediately?
Curate the final list. Discard any tertiary objectives that are muddling the clarity of your plan. The fewer objectives remaining at the point of executing your vision, the better.
Elevate values. Take a moment to consider the weight of your objectives when measured against the business proposition your plan is meant to encompass. Once these elements are aligned, you’re ready to execute your vision.
Beauty in simplicity
This leading beauty retailer implemented a simplified strategy to change what had become a convoluted business forecasting and budgeting process. Attempting to predict ever-evolving consumer demand had taxed their SAP business planning and consolidation (BPC) software beyond its capabilities.
Their outdated system required users to download data, update spreadsheets and re-upload the new information. In the event that this new data missed a revision deadline, the inability to factor in updated information related to sales numbers could swing the budget forecast by millions of dollars. This inefficiency was compounded by each department within the organization attempting to satisfy individual profit and loss (P&L) structures independently of each other.
These factors meant the business spent more time on report creation instead of the analytical rigor required to run the function. Recognizing the increasing insurmountability of their task, the team sourced a solution.
By implementing a third-party connected planning platform, the team quickly adopted an iterative approach to reviewing their forecasting models. Leveraging the advancements in one P&L area to further automate other forecasting models, the beauty retailer was able to cut the time needed to build a three-to-five-year strategic plan from several weeks down to a couple of hours.
Brewing clarity
Accounting for everything from the cost of goods sold to the latest promotional deals with their bars left the regional business unit of an international brewing company overwhelmed.
Complex manual processes — based on an intricate web of spreadsheets — restricted the finance team to quarterly planning reviews, affecting the company’s ability to adapt effectively in response to challenges or opportunities.
By turning to a connected planning solution for their financial planning and analysis (FPA), the brewer was able to consolidate data from all of their brands into a single solution with consistent processing and reporting. The move granted the business the operational dexterity to drill down to a single SKU or customer, a degree of granularity that unlocked new profit-generating opportunities.
So what do the beauty industry giant and popular international brewery have in common? The connected planning solution that streamlined their planning process.
Innovation and technology to remove barriers
Allitix and Anaplan provide connected planning solutions designed to synchronize your strategy and execution efforts. By eliminating the messy middle, our comprehensive technology provides businesses from a variety of industries with a single source of truth.
Our collaborative and intuitive platform can do the same for your business. With Anaplan, your various departments can collate their information in a seamless and shared environment that effectively removes their data silos. The benefits of this cohesive, integrated solution contribute to:
Intelligence insights that are available in real-time.
A platform that is future-proof and can be scaled as your business grows.
The ability to build models that decode your company with unmatched flexibility.
A simplified approach to demand forecasting and planning strategies.
With Anaplan, the instant automation of modeling scenarios can be used to consider every possible outcome. You’ll enjoy the ability to connect headquarters to your most remote outposts, enabling autonomous and coordinated in-market action, regardless of the scale of your operations.
Your various departments will benefit from compliant, secure autonomy that allows them to run advanced models and analytics on their own, independent of CIO cycles and resources, yet adhering to CIO standards.
Allitix’s Demand Forecast and Accuracy model combines aspects of statistical forecasting, historical drivers and top-down assumptions to provide users with multiple forecast iterations — an all-in-one integrated platform. These operational efficiencies provide your business with the ability to:
Streamline various models and compare prior and current forecasts side-by-side.
Leverage 12 statistical methods to predict demand based on transaction history.
Create product life cycles to view historic product releases and how they affect similar product demand.
Analyze deltas in forecast demand and compare forecast accuracy vs. actual demand.
Flexible. Scalable. Collaborative. To learn more about how the Anaplan solution can simplify your planning process in ways that even Ben Franklin would appreciate, contact Allitix. We’ll provide a free demo of our connected planning resource to showcase how easily your business can embrace a proactive, future-proof approach to demand forecasting and budgeting processes.