The race for supply chain 2030

Why Is Supply Chain Planning
So Hard?
Insights from Five Years of Research
02/16/2016
By Lora Cecere
Founder and CEO
Supply Chain Insights LLC

Contents
Research Methodology
Disclosure
Executive Summary
Reflecting on History
Five Reasons Why Supply Chain Planning Is So Hard.
Issue #1 - Governance.
Issue #2 - Strategy: What Defines Supply Chain Excellence?
Issue #3 - Shared Vision: What Is a Good Plan?
Issue #4 - Talent.
Issue #5 - Alignment.
Return on Investment
Recommendations
Conclusion
Terms to Know
Appendix
About Supply Chain Insights LLC
About Lora Cecere
Endnotes
3
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4
5
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Research Methodology
We are committed to delivering thought-leading content for the supply chain leader. Our goal is to be
the first place for visionaries to turn to gain unique insights.
Research is our business. As a group, we triangulate data from multiple sources, analyze for insights,
and share with supply chain leaders to drive continuous learning. This sharing takes different forms--
webinars, roundtables, formal networking sessions and private strategy days. We archive these
results and drive discussions in our public community Beet Fusion.
This report is based on research completed over the past five years on supply chain planning. For the
reader looking for in-depth analysis on an individual study, in this report we provide references to the
original research.
Disclosure
Your trust is important to us. In our business we are open and transparent about our financial
relationships. In this research process we never share the names of respondents and/or give
attribution to open-ended comments collected in the research.
Our philosophy is “You give to us, and we give to you.” We collect data from a private network of
qualified participants and openly share the results. The participants of our research always receive
the final reports; and, if interested, we share insights from the studies with the respondents of our
quantitative surveys and qualitative interviews in a complimentary one-hour phone call with supply
chain teams.
This report is written and shared using the principles of Open Content research. It is intended for you
to read and share freely with your colleagues and through social channels like LinkedIn, Facebook
and Twitter. When you use the report all we ask for in return is attribution. We publish under the
Creative Commons License Attribution-Noncommercial-Share Alike 3.0 United States and our citation
policy is outlined on the Supply Chain Insights Website.

Executive Summary
No two supply chains are alike. They vary by culture and purpose. The processes are evolving. The
average supply chain organization is 15 years old. While the teams are maturing, supply chain
processes are young compared to those of more established functions like sales, finance and
marketing. As a result, in many organizations supply chain planning is not well-understood.
Figure 1. Overview of Supply Chain Maturity
Supply chain planning technologies evolved in the late 1980’s to improve enterprise decision making.
Using specially designed analytics, the technologies help companies to forecast demand, and plan
supply. The selection and implementation of specific supply chain planning technologies needs to be
designed with the goal in mind.
While consultants promise that “an 80% solution is good enough,” we seldom find this to be the case.
The selection and implementation of supply chain planning technologies is fraught with issues. The
goal of this report is to improve a company’s odds for success in driving value in supply chain
planning processes.

Reflecting on History
Supply chain process evolution is now 35 years old, but the development and the adoption of supply
chain planning processes is newer. The use of the technologies is a new way of doing business.
The technologies first evolved in the late 1980s. The concepts gained mainstream adoption in 1995.
Late in the 1990s the technologies were overhyped and the benefits over-promised. As a result, the
supply chain planning technology market contracted with massive consolidation. In this period over
75% of the companies in the supply chain planning technology market were acquired. These
company names are now history.
The original definition of planning was limited by the possibilities of 32-bit architectures using client-
server technologies. The data models were limiting. Today, with the evolution of concurrent
optimization and cloud-based deployments, more is possible. Over the past two decades, within the
software, the mathematical models, capabilities for employee collaboration, and visualization
capabilities improved.
In this period much changed within the supply chain organization. Regional teams became global.
Supply chain groups were formed. The first- and second-generation supply chain pioneers retired.
Mergers and acquisitions reigned. As a result, many supply chain organizations reorganized and re-
formed. In the past five years we tracked five overarching trends:
• Functional to Enterprise Processes. The initial focus was on improving functional
excellence. There was a singular focus on sourcing, manufacturing and logistics. Over time the
processes evolved into enterprise processes like Sales & Operations Planning and Revenue
Management.i
Functional and enterprise processes are both important and need to be built
together in a holistic plan.
• Outsourcing. Outsourcing increased, giving importance to the management of value networks
to better manage outsourced manufacturing and transportation. The use of Electronic
Document Interchange and Fax-to-EDI morphed to include networks designed for one-to-many
and many-to-many bidirectional flows.ii
Organizations are just now beginning to develop
planning for multi-tier relationships. Most of the focus, up until now, has been on supply chain
planning within the four walls of the enterprise.
• Design of Networks. While 5% of companies designed their networks two decades ago,
today two-thirds of companies use network design technologies.iii
The evolution of supply

chain design capabilities evolves slowly. We show the normal path in the maturity framework in
Figure 2. Design processes mature from ad hoc to systemic and ongoing analysis, and from a
functional view to a holistic system view.
Figure 2. Network Design Maturity Model
• Maturity of Inventory Optimization Technologies. In the last decade inventory optimization
technologies improved—both in breadth and depth—to accelerate financial balance sheet
results.iv
The use of these multi-tier inventory solutions improved inventory decision making
and significantly improved inventory turns in mature implementations. In Figure 3 we share this
impact.

Figure 3. Advancement of Inventory Optimization Technologies
• Evolution of Demand Sensing. While traditional forecasting predicts demand in a longer-term
or tactical timeframe, in 2003 pattern recognition evolved to sense demand patterns in the
short-term duration. This technology is slowing being adopted. Today there are 25 companies
in various degrees of implementation of demand sensing technologies.
Technology capabilities in planning technologies evolved faster than the work processes. As a result,
in our work companies ask many questions:
• Do companies drive higher levels of results when the solutions are sourced from the same
vendor?
• How do I select a technology? Improve the value proposition through implementation?
• How many planners are needed? How does the number of planners vary by company size and
number of items?

• Technologies have evolved. When should I switch out my current solution for a new approach?
• How should the planners be organized to maximize value? What should the career path look
like?
In this report we answer these questions and also offer insights for a company new to the topic of
supply chain planning.
Most companies struggle with planning implementations. This is especially true if the project is
executed through a typical technology approach. While the technology can be quickly bolted into an
IT architecture, building planning capabilities within the organization takes time and perseverance.
There are many pitfalls. Let’s start the discussion with the five reasons why driving success in supply
chain planning implementations is so hard.
Five Reasons Why Supply Chain Planning Is
So Hard.
Listed below are the barriers we see in our work with organizations attempting to create an effective
supply chain planning organization:
Issue #1 - Governance.
Supply chain planning tools are designed to improve organizational decision making. The use of
planning technologies is simpler when deployed within a function of a regional organization. Why?
The goals are clear, and the alignment of functions is less of an issue.
As companies grow larger, global governance is less clear. It becomes a problem. Simply put, it is
difficult to have better tools to make a decision if companies have not thought about the best way to
make a decision. Before the implementation of supply chain planning technologies, getting to data
and reviewing decision options is hard. After the implementation, data is more available and there is
greater visibility within the organization of the implications of a decision. What is possible after the
technology implementation is vastly different than beforehand. As a result it is important to start the
project by asking the question, “How should the company make decisions?”
The most successful companies tackle these issues proactively. For most it is an opportunity. Within
an organization there is tension as companies attempt to answer the questions of:
• How should the company make decisions and planning trade-offs?

• What is the role of business groups and regional teams in the use of new technologies to
improve planning?
• Which decisions should be made globally? Regionally? Locally? How should these teams
coordinate work?
• How do we make the best decisions possible in a global organization?
• What level of risk is the company willing to take?
• How should the company orchestrate cross-functional trade-offs?
One in two companies with revenues greater than $5 billion have a supply chain center of excellence,
and the majority of the companies with a center of excellence also actively work on the design of the
supply chain. As can be seen in Figure 4, most companies have a centralized Center of Excellence
(COE), but focus on serving the regions and divisions. Planning is only managed globally in 17% of
the organizations.
Figure 4. Supply Chain Governance

The discussion of local versus global, and divisional versus corporate, planning is an important
decision that evolves over time. Initially, due to labor constraints, many companies implement
technologies with a focus on corporate planning. However, as the organization understands and
embraces planning, the governance will often shift to regional and divisional teams. The key is
making it a conscious choice and making sure that the work teams understand roles and
responsibilities.
An important question to ask is “Where do we make the pivot in supply chain processes?” This
defines where companies should pivot between local and global processes to maximize asset
utilization. The most frequent organizational pivot defines supply chain groups in commercial
organizations as local or regional and supply chain groups in procurement. Here is the logic:
• Procurement. The procurement group is often global to have “one face to the supplier” to gain
aggregate buying power. Mature organizations orchestrate aggregate buying strategies based
on demand and supply probabilities.
• Logistics. Logistics planning varies based on scope and scale. If the company is an
international shipper with a focus on air, ocean, and long haul over-the-road, the logistics team
is normally managed globally. In contrast, last-mile delivery is typically managed locally.
• Manufacturing. Manufacturing strategies are based on the global product platform. If the
products are shipped across divisions in a matrixed organization, the manufacturing
organization is usually planned globally in the tactical horizon locally at the plant level. In
contrast, if the manufacturing is regional, manufacturing planning is typically local or regional.
• Customer Service. If customers are local, customer service will usually be local; however, if
customers are national or global accounts, customer service can be regional or global.
• Commercial Teams. Commercial teams with supply chain support groups are typically
regional.
• Plan. Design and tactical planning teams will follow the functional flow design/pivot while
operational and executional deployments will follow the regional design flows.
The key is to ensure the company knows how to make a decision and who is driving the decision.
While the technologies ensure that decision making is quicker and more holistic, clarifying roles helps
companies to maximize the value.

Issue #2 - Strategy: What Defines Supply Chain
Excellence?
The basic assumption of supply chain planning, and of optimization, is to improve an objective
function. To drive results the desired outcome must be clear.
This is easier said than done. Supply chains are complex. The management of metrics and business
results is fraught with political issues. Most organizations do not understand the relationships
between supply chain metrics like operating margin, growth, inventory turns and Return on Invested
Capital (ROIC). They are tightly interconnected, forming an Effective Frontier of potential outcomes.
When thinking through the Effective Frontier, as shown in Figure 5, supply chain metrics need to be
defined as a portfolio. There are finite trade-offs between costs, inventory, and asset utilization
strategies. The objective function, or outcome of the planning system, should maximize the potential
of the Effective Frontier. The outcome should be feasible. To set realistic targets may require
modeling using network design tools in advance of a planning implementation to understand and
apply the insights of the metrics trade-offs.
Figure 5. The Supply Chain Effective Frontier
In the process, a mistake that many organizations make is thinking that there are “best practices”
which can be widely adopted across companies. Instead, each supply chain planning road map
needs to be built with the company’s goals and with strategies in mind. What will work in the culture of
one company may not be a good fit in another.

Supply chain planning is also industry specific. While there are some common principles, supply
chain planning needs to be designed with the goal in mind. Supply chain strategy defines the goal,
and the supply chain strategy needs to align with the business strategy. In Figure 6 we share a useful
framework to define supply chain strategy.
Figure 6. Use of Supply Chain Planning in the Context of Supply Chain Strategy
The supply chain is a complex system with increasing complexity. Only after the definition of the
strategy should companies define business processes. A common mistake is defining processes first.
When this happens, companies will often try to automate past practices, or believed best practices,
with planning technologies without embracing what is possible through advanced analytics.
Planning technologies should enable a step change of process improvement. They should never be
used to automate past practices; instead, the thinking should be about the definition of outside-in
processes, based on channel and supplier relationships, to sense and respond.
In summary, supply chain excellence must be defined. It cannot be assumed. The definition varies by
company. Too few companies take the time to define it before implementing supply chain planning.
As a result, the wrong decision processes are accelerated. In the words of one of our clients, “A bad
planning project is like making bad decisions on steroids.”
Delivering on supply chain excellence goals also does not happen by just creating a Supply Chain
Center of Excellence. While one in three companies have a supply chain center of excellence, few

have agreement internally on what defines supply chain excellence. This is one of the primary
reasons that one out of two supply chain centers of excellence fail. In many companies, frustration
abounds.
As seen in Figure 7, supply chain planning is one of the primary roles of the Supply Chain Center of
Excellence. If this group is not clear on the definition of what drives excellence, it is tough to get the
project going on the right path.
Figure 7. The Role of Supply Chain Centers of Excellence in Defining Supply Chain Planning
Issue #3 - Shared Vision: What Is a Good Plan?
Supply chain planning means different things to different people. It is a multifaceted project for both
demand and supply. There is a focus across four time horizons: strategic planning (a longer time
duration of months and years); tactical planning (a medium time duration of months with planning
represented in weeks); operational planning time horizons (a shorter time duration with planning
focused in days with output in days and hours); and executional planning (near-term planning of 0-
two days with output in minutes and hours). The tactical duration of planning is usually 8-16 months
while the operational time horizons are 0-16 weeks. Operational planning tends to be functional in

orientation: production planning, transportation management, and material requirements. Executional
planning, allocation and Available-to-Promise (ATP), tends to be more rule based. Companies that
excel in planning have a clear road map for both demand and supply across the time horizons.
It is not simple. Most companies have two to three instances of demand and supply. As shown in
Figure 8 more than 75% of companies have demand and supply implementations, but in companies
greater than $5 billion in revenue you can often have only demand.
Figure 8. Demand and Supply Planning Instances
In the market there are many options and technology solutions to select from. The market is
confusing, but the average Return on Investment is nine months. In our research we try to learn from
those who rate themselves more satisfied with their implementation, and learn from the patterns of
those that rate themselves less satisfied.
In our planning benchmarking efforts we studied the maturity of companies on demand and supply
planning. In Figure 9 we share a sample of one company’s maturity in the areas of planning. (This
type of framework is useful to plot planning maturity, and evaluate enterprise and network planning
technology decisions.) This company is typical. They have implemented numerous Enterprise

Resource Planning technologies, and focused on transactional efficiency, but not cracked the code in
making planning effective.
The organization is rife with change management issues. They implemented supply chain planning as
a technology project and never matured the organization’s capabilities to use decision support
technologies. The planning tools purchased were implemented within functions without a holistic road
map.
Supply chain planning is future looking. It is about the feasibility of the plan. A good planning process
helps teams to see new possibilities and minimize risks. The tools have “what-if” capabilities and are
used by the planners. (In our research we find that only 30% of companies have sufficient “what-if”
capabilities.)
Figure 9. A Supply Chain Planning Maturity Assessment
In Figure 9 green represents mature capabilities, where a company is above the peer group; pink
represents average capabilities; and red represents planning maturity below the peer group. Most
process companies are more mature in transportation planning, while discrete companies are more
mature in materials planning. Maturity in manufacturing and inventory planning is a characteristic of a
mature supply chain planning implementation.

To drive planning maturity it is important to think about plan consumption (synchronization) between
and amongst the planning layers—strategic, tactical, operational, and executional—and the relative
maturity between planning in sell, deliver, make, and buy, and the ability to orchestrate decisions
cross-functionally. It requires a holistic view.
In our research we studied what drove a higher rate of success in supply chain planning for business
users.v
The elements in red within Table 1 represent a statistically significant difference at a 90%
confidence level between respondents that rate themselves as more satisfied than those who are less
satisfied. In general, companies that implement best-of-breed solutions using their technology
provider for implementation are more satisfied than companies that implement supply chain planning
extensions of Enterprise Resource Planning (ERP) or use a third-party consultant. As can be seen
from the study, when this happens, the rate of implementation is faster and the time for ROI quicker.
Table 1. Characteristics of Highly Satisfied Companies with Supply Chain Planning
In assessing planning maturity, trust issues abound. Companies do not trust black boxes. One of the
characteristics of maturity is when planners use the system to plan. A sign of a lack of maturity is a
strong dependency on Excel spreadsheets. Other characteristics of a good plan are:

• Feasible Plan. The solution should adequately model the business, including constraints and
floating bottlenecks. To understand the capabilities of the technologies, they need to be tested
and tuned in conference room pilots prior to implementation.
• What-If Capabilities. Only 30% of companies have sufficient “what-if” capabilities in their
planning. The goal of the decision support platform is to see the consequence of multiple
scenarios.
• Timeliness of the Plan. Scalability is a major factor. The frequency and granularity of the plan
needs to match the cadence of the business. Test for scalability prior to implementation.
Issue #4 - Talent.
The first and second generations of supply chain pioneers are retiring, and as a result there is a
supply chain talent gap in middle management as shown in Figure 10. While there are many talented
candidates coming from supply chain programs, the challenge is training and onboarding them fast
enough to meet supply chain planning needs. The toughest positions in supply chain within this
middle management skills gap are in the area of supply chain planning.
Figure 10. Mid-Management Skills Gap

As shown in Figure 10, some of the greatest issues in the supply chain skills gap are in the areas of
demand, supply, and Sales and Operations Planning. Positions requiring both a deep business
process understanding, and analytics capabilities, are hard to fill. As a result, companies need to train
their teams and ensure the evolution of a career path to ensure adequate training and retention. Due
to the market shortage, the pressure on supply chain planning talent is high; and as a result, the time
to replace a planner through external recruiting can be seven to nine months.
Figure 11. Challenge of Filling Supply Chain Positions
Issue #5 - Alignment.
When business teams are aligned, the satisfaction with supply chain planning is higher. The
unfortunate reality is that the teams are not aligned, with the greatest gaps (as shown in Figure 12)
happening between commercial and operational teams. When companies can close the alignment
gaps there is greater agility and progress on cross-functional metrics.

Figure 12. Organizational Alignment
Table 2. Alignment of Companies More Satisfied with Supply Chain Planning

In our research we find it is easier to drive alignment in smaller organizations, and driving alignment
in larger organizations is tougher. This can happen through cross-functional incentives and
leadership, but improving alignment is a prerequisite for satisfaction with supply chain planning. As
shown in Table 2, successful supply chain planning implementations happen within organizations with
tighter, more aligned teams. Gaining alignment between commercial and operations teams is job one
for the Chief Operating Officer trying to drive success in supply chain planning.
Return on Investment
Despite the issues and barriers, in our quantitative survey of 184 planning instances, the average
implementation has a Return on Investment (ROI) for supply chain planning of nine months. In the
larger world of technology implementations, a less than one year ROI has great appeal. Only 35% of
the projects are over budget and 66% of companies were satisfied with their planning solutions. The
results of the study are shown in Figure 13.
Figure 13. The Return on Investment with Supply Chain Planning

Recommendations
As you read this report and think on the consequences, consider these recommendations:
• Don’t Waste Your Time Attempting to Integrate APS with SRM and CRM. The data models
of these three technologies are vastly different. The only companies that will have any success
with the integration of CRM into demand planning will be discrete make-to-order companies
that work on a pipeline funnel, or service-based companies. The data models are not designed
to support the product-based companies in the process industries of chemicals, consumer
products, food and beverage, and pharmaceuticals.
• Make the Black Box Your Friend. Supply chain planning success happens when companies
use their systems and validate the outputs of supply chain planning analytics. There are very
few times that manual overrides on supply chain planning systems improve the plan.
• Challenge the Change Management Issues. Supply chain planning at its core is about being
proactive. When an organization rewards firefighting they will struggle to successfully
implement supply chain planning. For many organizations this is a major change management
issue.
• Focus on the Supply Chain Metrics That Matter Cross-Functionally. Identify reasonable
targets and manage a set of cross-functional metrics that represent growth, cost, inventory,
and Return on Invested Capital. Use these to define the objective function within supply chain
planning.
• Clearly Define the Supply Chain Strategy and Operating Charter for the Supply Chain
Center of Excellence. Spend time understanding the organizational goals and define how to
deliver the business strategy through supply chain excellence. In building of your charter avoid
buzzword bingo. Define all terms and focus on delivery. Educate the larger organization on the
objectives and goals of supply chain strategy. Don’t assume that it is understood. Measure the
impact and market the successes.
• Define a Multi-Tier Inventory Management and Buffer Strategy. The management of the
form and function of inventory, and the design of the network, is paramount to buffer risk. (To
understand this definition refer to Table 3.) Inventory is the most important buffer, and
companies with strong risk management programs define an inventory planning position and
are active and knowledgeable about the use of multi-tier inventory management technologies.

Table 3. Form and Function of Inventory
• Give Planners Time to Plan. One of the distinguishing characteristics of great planning
outcomes is an organization that gives planners time to plan. This is not trivial. Many
companies struggle with how to evaluate planning effectiveness and productivity. It is
complicated because no two companies are the same, and there are many technologies used.
In Figure 14 we share insights from our Planning Benchmarking data.
Figure 14. Number of Items per Supply Chain Planner per $1 Billion in Revenue

• Get the Right People to the Data. When we shared data from our studies with the
roundtables of supply chain leaders who had completed a quantitative study, a number of
attendees shared stories of how they had met the challenge of helping employees/planners to
get to data. When it comes to data storage every organization is different. One of the
suggestions which resonated with the participants was teaching new employees tips and tricks
for data storage and document sharing. Several commented they had developed this training
as part of onboarding. As shown in Figure 15, one of the obstacles in S&OP is getting to data.
Make it a priority to train employees on data storage and retrieval.
Figure 15. S&OP Implementation Challenges
• Educate the Financial Team. One of the barriers in driving supply chain excellence is the
role of the financial budget. While many companies believe that the role of the supply chain
team is to deliver on budget processes, as companies mature they realize the supply chain
plans should be an input into the budget process, but that the budget process should never
constrain the company’s ability to seize opportunities. The goal is to keep the supply chain
organization and relevant processes aligned to the market.
• Recognize That Risk Management Is About Much, Much More Than Technology. While
technology vendors espouse risk management as a technology, it is much more than the

deployment of a technology. While visibility technologies are an important part of the solution,
they are not the answer. Visibility of suppliers—locations of facilities and their suppliers—is the
first step. The second is supplier financial sensing. Companies with advanced risk
management programs redesign the role of procurement to build, not just audit, value chain
relationships.
• Test Current Paradigms. Moving forward requires companies to learn a new language
(reference the terms at the back of this report) and start to build new processes using new
techniques. Companies need to start with the end in mind, and not be confined by traditional
thinking. Could cognitive learning redefine master data? Could Hadoop on non-relational
databases be used to drive new insights and discovery for distributor data? Could sentiment
data, along with rating-and-review data, help to better understand consumer insights on new
products? These are all possibilities which are feasible today. However, it requires the
rethinking of existing paradigms.
• Rethink Technology and Funding. Current IT spending is tied up in system upgrades and
maintenance support of license systems. Testing big data and analytics concepts with the tight
budgets in IT departments requires funding by the business department. Work cooperatively
with the IT department to test new concepts using funding from continuous improvement
programs. The providers of big data and analytics are in an ecosystem of technology providers
that are not well-known to the supply chain leader. It requires investing time to get to know a
new group of technology providers and build relationships and knowledgebases to use a new
set of tools.
• Combat the Shortage of Talent. The United States needs 140,000 to 190,000 more workers
with ''deep analytical'' expertise and 1.5 million more data-literate managers.vi
The lack of
science, technology and engineering expertise is at the root of the issue. At the Supply Chain
Insights Global Summit, Intel reported hiring a co-op student two years prior to matriculation.
• Implement with Knowledgeable Resources. At first when you read this recommendation you
might say, “DUH!?” Let’s face facts. There are too few people in the world who are really
knowledgeable about supply chain planning software tools. While many consultants will talk
about supply chain planning, we find only a small group to be knowledgeable in the
technologies. Companies have better success with boutique consultancies and implementation
teams from best-of-breed technology vendors around the world who have built strong teams
around inventory optimization and planning.

Conclusion
Supply chain planning is important to drive balance sheet improvement. However, getting good at
planning requires organizations to tackle five tough barriers and numerous change management
issues. With a strong ROI of less than a year, the results are worth the journey.

Terms to Know
Getting clear on terms is often the first step to driving a supply chain transformation. To help teams,
here we provide the definitions of the terms used in this report:
• Concurrent Optimization. The use of technologies to solve optimization problems across
source, make, and deliver, in-memory together to rationalize cross-functional trade-offs.
• Demand Latency. The time it takes for order take-away at the point of consumption to
translate into an order for a manufacturer. The slower the velocity at the point of consumption,
the longer the demand latency.
• Inventory Configuration. A focus on form and function of inventory, along with techniques
like postponement and risk pooling, to improve inventory buffers.
• Linear Optimization.
• Multi-Tier Inventory Optimization. The use of inventory optimization to determine
optimization levels at multiple nodes simultaneously.
• Operational Planning. The planning process that stretches over the horizon of the slush
period to the freeze duration in manufacturing planning.
• Push-Pull Decoupling Points. Some supply chains push inventory into the channel, while in
others, inventory is pulled into the channel based on orders. When push/pull decoupling points
are defined it identifies the point at which inventory is decoupled on a push-pull boundary.
• Postponement. An inventory strategy to delay steps of the conversion process until the
demand for the final product is known.
• Revenue Management. Analyzing the impact of price, promotion and channel incentives on
demand lift and product profitability. Revenue management is the horizontal process that helps
companies rationalize the effectiveness of demand shaping programs.
• Tactical Planning. The period of planning that stretches from the freeze duration in
manufacturing planning to 12-18 months in the future. (While it varies by industry, with
pharmaceutical companies planning for three years, and high-tech companies planning for six
to eight months, 12-18 months is the average planning duration for tactical planning.)
• Sales and Operations Planning. The cross-functional process of matching demand and
supply plans to balance demand and orchestrate the market response.

Appendix
For more details and insights on our research on supply chain planning, check out our reports.
Maximizing the ROI in Supply Chain Planning
What Is the Value Proposition of Sales and Operations Planning?
Why Is S&OP So Hard?
What Drives Inventory Effectiveness in a Market-Driven World?
Supply Chains to Admire – 2015
Putting Together the Pieces: The S&OP Technology Landscape in 2015
Driving Supply Chain Excellence through Supply Chain Centers of Excellence
Inventory Optimization in a Market-Driven World
Supply Chain Talent--A Missing Link in the Supply Chain

About Supply Chain Insights LLC
Founded in February, 2012 by Lora Cecere, Supply Chain Insights LLC is beginning its fifth year of
operation. The Company’s mission is to deliver independent, actionable, and objective advice for
supply chain leaders. If you need to know which practices and technologies make the biggest
difference to corporate performance, we want you to turn to us. We are a company dedicated to this
research. Our goal is to help leaders understand supply chain trends, evolving technologies and
which metrics matter.
About Lora Cecere
Lora Cecere (twitter ID @lcecere) is the Founder of Supply Chain Insights LLC and
the author of popular enterprise software blog Supply Chain Shaman currently read
by 5,000 supply chain professionals. She also writes as a Linkedin Influencer and
is a a contributor for Forbes. She has written four books. The first book, Bricks
Matter, (co-authored with Charlie Chase) published in 2012. The second book, The
Shaman’s Journal 2014, published in September 2014; the third book, Supply
Chain Metrics That Matter, published in December 2014; and the fourth book, The
Shaman’s Journal 2015, published in September 2015.
With over 12 years as a research analyst with AMR Research, Altimeter Group, and Gartner
Group and now as the Founder of Supply Chain Insights, Lora understands supply chain. She has
worked with over 600 companies on their supply chain strategy and speaks at over 50 conferences a
year on the evolution of supply chain processes and technologies. Her research is designed for the
early adopter seeking first mover advantage.

Endnotes
i
Putting Together the Pieces: The S&OP Landscape in 2015, 08/21/2015, Supply Chain Insights,
http://supplychaininsights.com/putting-together-the-pieces-the-sop-technology-landscape-in-2015/
ii
Supply Chain Visibility in Business Networks, 03/11/2014, Supply Chain Insights, http://supplychaininsights.com/supply-chain-
visibility-in-business-networks/
iii
Driving Supply Chain Excellence, 6/18/2015, Supply Chain Insights, http://supplychaininsights.com/driving-supply-chain-
excellence/
iv
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