Adherence to plan

Smart planning will achieve better customer service, against lower costs, and will obey the constraints related to your physical value chain. This is not a new insight – like many ideas in supply chain management – and projects to improve planning are initiated frequently. Better planning can be achieved by improving the planning process, training the planners, and implementing planning decision support.

However, all efforts to improve a planning process will be in vain, when the thus created plans are ignored. A plan is basically a set of instructions, to be followed up by some lower level planning process, or employees carrying out a task. The extend to which a plan is actually executed like it was intended to be executed, is referred to as adherence to plan. And in many companies, adherence is low.

The plan is ignored

A low adherence to plan can happen on all planning levels. For example, Sales & Operations Planning has received much attention in the past years. Perhaps some companies have set up processes that actually produce a plan, which is then filed and ignored by everyone else in the organization. At the start of the next planning cycle, the S&OP participants are confronted with reality, the plan is corrected and the ritual is repeated.

There can be many reasons why plans are not executed by the persons that should execute it. These reasons roughly fall into three categories: 1) the plan cannot be executed because it violates important rules or constraints, 2) the plan is already outdated once it has been published, and 3) there is resistance against executing a plan. As for the third reason, when people have been used to the fact that they are allowed to make planning decisions for themselves, and suddenly this changes with the introduction of a new planning process, this will not always be greeted with enthusiasm.

Good and bad reasons

The problematic element of adherence to plan is that it can be very hard to distinguish between the three reasons. When there is plan resistance between executing a plan, people will put forward reasons why they cannot execute, and these reasons can be good or bad. However, to make the distinction between good and bad reasons, one has to know the process very well, perhaps on the same level as where the resistance is coming from.

So how to tackle this problem of plan execution? When designing the planning process, it is important to dive into the details of the planning level or execution level below, to consider whether details must be incorporated into the planning process. Not all details are important, but this can only be assessed when they are identified. Furthermore, adherence to plan needs to be monitored continuously and a feedback loop needs to be in place. Such discipline of the planning process is demanding and not many companies are able to persist this for a prolonged period of time.