Planning Under Uncertainty. It’s A New World for Supply Chain Planners

Unplanned events and disruptions have always been a fact of life for forecasters and planners. But episodes like a factory fire, a hurricane or a flood were local to a geography and limited in duration. If a hurricane hits the East Coast, you know it’s going to shut things down in that region for a few days, but then things will begin to get back to normal. You can even shift production or distribution to another region to cover your bases. More importantly, planners have historical records they can turn to in order to estimate the impact on the supply chain from that kind of event.

That has not been the case over the last couple of years. Shift production? Where are you going to go when the whole world is on lockdown? Time limited? Who knew how long the pandemic was going to last? And, most important, there is no historical reference for what we’ve lived through. In other words, these are uncertain times.

On this episode of Talking Supply Chain, Larry Lapide, one of the leading authorities on planning and forecasting, discusses why we need a different approach to planning and forecasting. He also discusses why S&OP, while still valuable for the long-term, isn’t up to the task of making quick decisions for the short term.

Be sure to listen wherever you get your podcast.