How shall we organize planning? Planners and schedulers, or an end to end approach?

Planning can be organized in many different ways. The question on how we should organize it pops up in almost every planning project. Either the organization itself is topic for discussion, or the problems that arise within (and related to) the current organization.

The options

One planner doing it all?

Some planning organizations are run by 1 planner. When he or she goes on holiday, a meeting is scheduled to see how ‘this problem’ should be solved, on top of the expectation that the planner should already ‘plan ahead as much as possible’ to mitigate the gap. What does the planner do? The answer is very simple: everything. The planner is responsible for assuring there is a plan for the floor, an item level plan for the upcoming weeks, a raw material supply plan, a supply plan for the packaging goods. He or she might be making an estimate on the item level forecasts so that there is clarity on what needs to be produced. Sometimes the planner also gives inputs to the S&OP process or even runs the entire process on top of all previous tasks. In short: the planner is a centipede. If one of the tasks are failing, the planner will immediately feel the result in one of the subsequent process steps. The person will directly benefit from optimizing the different steps within the own (wide range of) responsibilities. He or she might not have the expertise to bring all these tasks to the absolute top, but on the other hand, the planner will have a very good understanding of how each of these tasks are interdependent.

Split the planning problem between the planners

In bigger organizations, we face a very different situation. The whole planning problem is considered to be ‘too big’ to be run by one single centipede. Therefore, it is divided by different people. Companies divide the problem in different ways:

• Some organizations will divide the planning problem in a functional way. They would make people responsible for e.g., demand planning, raw material planning, master planning, detailed scheduling, S&OP planning. Teams would create a lot of expertise in one specific domain. The risk that comes along is that the interface is not managed in an optimal way and that ‘gaps’ exist… These gaps are tasks that are not clearly part of one of the teams and for which nobody feels really responsible. In some cases, teams will make a lot of assumptions on ‘who should pick them up’. Sometimes, apart from the expertise that teams build up within their own expertise, they also become an expert in expressing expectations towards other teams. It can be mitigated, by defining very clear handover procedures. Next to that, in order to fully understand the dynamic and possible root causes of events, quite some measurements are needed to fully understand where possible hick-ups are triggered, enabling continuous improvement in the end to end chain.
• Some other organizations will divide the planning problem in an end-to-end way. They would make centipedes responsible for the end to end, asking them to do the demand planning, item level planning, detailed scheduling, and – if there is a clear link with the raw materials – raw material planning for a certain part of the product portfolio. They would also ask these centipedes to give e.g., the necessary inputs to the S&OP process. In such an organization, we can benefit from the centipedes end-to-end view and the fact that ‘gaps’ will need to be closed by that same person. The risk still exists that expertise in each of the areas might not be fully developed. This might be mitigated by assigning process owners for the different functional areas who should support developing the processes and bring the necessary expertise in each subfield.
• Of course, hybrid situations also exist. Some of those tasks can then be combined in one person for one part of the portfolio, and others are still split. Raw materials are often shared over the different product portfolios and therefore, they can be planned by different people. The item level planning on MPS level and the detailed scheduling can then still be combined in one person, where also demand planning could be evaluated to be integrated. S&OP could then for instance be split again. In such organizations, the planning problems that are interdependent ‘between’ the departments are separated. The planning problems that can be considered in an end to end flow, are organized in a more ‘end to end’ approach. The interface challenges remain between the different planning departments but become less intense then in the functionally organized teams.

The vision of supply chain leaders

In the very interesting whitepaper “Supply Chain Planning in the Digital Age” of Prof. Ann Vereecke (Vlerick, 2020), the future planner’s profile is described based on input of a diverse group of supply chain leaders. (https://repository.vlerick.com/handle/20.500.12127/6578).

The expectation is described that a planner will shift in the future from a silo-thinking approach (one planner covering master production scheduling, one planner covering e.g., detailed scheduling etc.) towards a more end-to-end approach. In the paper, it is referred to as “From Scheduling to Orchestrating”.

It is important to note though, that in this whitepaper, this organizational shift does not stand on itself but is an element of the future setup of planning as a whole. The elements can be summarized as follows:

In terms of the future planning systems:

• We will work with planning systems that are autonomous, integrated and self learning. Balance decisions will be taken automatically.
• The system will work from a control tower and will be touch-free. It can be centralized and the planning will be made from a remote center.
• Although the different planning layers are expected to remain, the system will integrate those layers.
• Exception based planning will be the norm, where the planner will be supported in his decision making.

In terms of the planner’s profile:

• The planner will focus on improving the plan (versus ‘managing data’)
• The planner will shift from doing routine tasks towards interpreting and assessing the impact on the business
• The planner will focus on value and planning revenue, instead of a volume-focused role
• He will work on exceptions and build what-if scenarios instead of carrying out repetitive tasks
• And in the end, as stated in the beginning, the planner will move from ‘scheduling to orchestrating’, he will shift from planning a wide range of products on specific planning levels towards a more limited range of products, combining the different planning levels.

Pros and cons

Below you can find an overview of the most commonly used pro’s and cons for the two extreme setups.

What about ‘creating some tension’?

Next to the above pro’s and cons, we also see another argument popping up sometimes. In some cases, the functional setup (splitting e.g., the master planning from detailed scheduling) is chosen assuming that a balance between the different ‘interests’ are driven by the tension between the departments and their individuals. Typically, supply chain would be more focused on service level and inventory within the triangle. Operations is typically more focused on cost. According to us, cascading this ‘tension’ all the way to the individual planners and schedulers is not the best way to assure balanced decision making. These balance decisions need to be made in well-run S&OP processes.

References:

Prof. A. Vereecke (2020). “Supply Chain Planning in the digital age”, Vlerick Business School.