Why Your Planning System Can't Help You Change

There's a huge amount of disruption on supply chains. Then the last five ideas has just been unbelievable, and people think of disruptions as all being external, and there is a lot of external disruption, but every executive has to deliver growth, right, so there's a lot of internal disruption that comes through. Welcome to Speaking of supply chain. I'm Christine Bernhardt, head of industry Engagement and Alliances at Miebach, and your host for this week's episode.

This is where we go beyond the buzzwords to unpack what actually drives supply chain performance. Today we're talking about planning, one of my favorite subjects, and why despite all the investments in systems, data and now AI, it still doesn't consistently deliver results. Most organizations, in my opinion, do have a planning problem, but what I'm seeing is that they're trying to solve it the wrong way. They're layering on more technology, new platforms, a more data without fixing how decisions actually get made and executed.

As a result, planning still does not translate into performance, and that's what we're going to unpack today, and more importantly, we're gonna talk about what needs to change so Before we jump in, I would like to introduce this episode's guest which are Rafa and Paul from Koopa. They're gonna hopefully give us a brief overview of their backgrounds and what it is you do for Koopa today and what you're spending time with customers doing. So, Rafa, you want to start sure. Thank you, thanks for having us, Christine.

So, my name is Rafavosciz. I've been in the supply chain industry for about I think eighteen years, and fourteen those eighteen years I actually been with Koopa, the former Lamasal business, so pretty much my entire career as being on the technology and consulting side. I started backing in Latin America, leading projects, building teams, working side by side with the customers, and then out four years ago, I transitioned to the US. I have the opportunity to lead our services teams, to lead our customer success teams, and most recently I took on a new role that is the one that actually brought me to work closely with you, Christine, which is essentially leading the alliances supply chain alliances for Cooper So I essentially worked side by side with our partners on bringing new offerings, you know, staying ahead of the trends and you know, making the best for our joint customers.

It's been fabulous too. I've loved it. So Paul, tell us a bit about yourself. It is rapha great Christine, thank you for having us.

This is what an opportunity, so I really appreciate it. My name is Paul Webb. I'm Cooper's supply chain industry principle. I've got I've got quite a lot of gray hair.

I've got over twenty years experience as a practitioner work with several of the Fortune five hundred companies, specifically on their strategic supply chain optimization, balancing the service and the cost equation using what was formerly lambsoft at Cooper's supply chain design capability. So I was a three almost four times customer two years ago. I had the opportunity to join the Cooper team. Has been phenomenal.

My role now is really to work with executive teams on understanding what the opportunities are, how they can use the capabilities, how they can get most value, and how to govern the capability once they had it. So it's been phenomenal. Thank you. I feel like you were calling out the gray hair thing, and I'm like, well, mine would probably be great too if I allowed it.

Come on, Paul, Okay, So I want to level set for just a minute. And because I think when people here Cooper, a lot of people still think procurement or spend. How should people think about Cooper's supply chain. Cooper spends curement, finance, and supply chain.

So it's really about total spend management. And as Cooper goes from indirect which was historically a big focus, now we've had several acquisitions, capability enhancements, a lot of investment in the supply chain space. Lamasof was one of those acquisitions that we made. So really it's about supply chain optimization and how can we pull together that total spend management.

And I think we're going to get into this, Hopefully we're going to get into it. There's so much more than network design. It's really around supply chain optimization and how can you take those strategic goals through the execution. I'll just add like if we think about it in a more generic way when we talk about spend management, because with that phrase, people naturally think about procurement.

But I feel like it's it's all about making better decisions for the business, right. So what we are building here is a platform that will help the enterprises interact between procurement, supply chain finance, make it trade offs, have the visibility and have the ability to you know, make faster and better decisions along the way. And the long term relationship between Meeboch and Koopa has been around network design primarily right building models and really helping customers determine, you know, what their supply chain network should look like.

Is that is that fair Rafa. Yes, one hundred percent. I'll say like as of right now, you are probably one of our most experienced partners, you know, from the since the early days, so you have been working side by side on that evolution of the technology and that's why I'm excited, you know, to continue to partner on on what's coming next. That is definitely expanding what we use to call supply chain design.

Perfect and before we jump into planning, one of the things that I think has been interesting for me since I've been at Meeboch is seeing that you know, I think previously my experience was companies did these network design projects on some type of a periodic basis right, it was, you know, every three to five years. Over the last you. Know, seven or eight months since I've been with me back, I'm seeing that that's not necessarily true for more mature organizations, where they're actually looking at their models and their network on a on a much more frequent basis.

Rafa, like you've got a lot of time with Koopa and with lamasoft am I am I reading that correctly one. Hundred percent, and I'll pass it to Pull after my thoughts here because he has been also on the other side of the table. But I've seen the evolution, you know, firsthand. We used to do you know, five year network design projects, you know, every other year, every you know, three years, and and that was the business you know, ten years ago.

I think companies are still doing that a little bit. It's kind of a nice to have, but most of them, to your point chasing, the more mature ones are really focus on what's going to happen next, right in the next month, in the next six months. So I also think the evolution of the technology has given us the capabilities and the scalability to build you know, more complex model, more detail models, and you know, get us closer to that integration with natural you know, planning decisions as well.

Yeah, I think if I can just jump onto that as well, I think we are seeing it's interesting how companies come to us. Generally they're going to come to us with a challenge, but once they start fully realizing the value of the capability, then we start seeing application in many right across the supply chain. If you think any supply chain, I like to think of supply chain as a collection of assets and relationships. So your assets would be your inventory or equipment, production facilities, et cetera.

Your relationship, which suppliers are you doing business with, what's the terms of agreement, what's your relationship with the marketplace? Whenever you have to make a different asset or a relationship decision, that's really where people are using supply chain optimization. Your planning system is very good at holding your current configuration. But there's a huge amount of disruption on supply chains in the last five years has just been unbelievable.

And people think of disruptions as all being external, and there is a lot of external disruption, But every executive has to deliver growth, right, so there's a lot of internal disruption that comes through. So whenever your supply chain needs to adapt to evolve, how are you making those decisions? Because quite often you can't make those decisions in your planning system. So what we're seeing with our customers as they grow in maturity is they're taking the supply chain optimization capabilities and they're applying it to a specific asset or relationship or area of the business and saying, how do I need to evolve this area of the business.

So I think we all agree that there is a problem, right, and that companies a most of them have planning systems and maybe excel, but especially the big ones have the big companies, they've they've already made investments in an APS, an advanced planning system, they've already started to layer in maybe you know, some advanced AI and intelligence, but fundamentally they're still struggling. So from my standpoint, that means there's like a breakdown, right, something is breaking down between planning and the rest of the organization.

How would you dive into that, like, what are you seeing? What is the gap between the way people are planning and then what's happening with their brighter, broader supply chain. So if you think about planning systems, the EEIPP systems, they're they're incredibly reliant on inputs, so they're very good at doing exactly what you tell them to do. One of the things when I joined organizations was to try and understand what is the current configuration, how does that supply change strategy line up with the commercial strategy?

Is it feasible and is it optimal? Like quite often, if you think about it, I used to have the teams of twenty plus planners going in and making changes continuously, right, So a lot a lot of the job turns into reconciliation. So there's a huge amount of frustration with the executive team trying to set a strategy and then realize that through the execution on this platform that's changing. But it's heavily reliant on the people interacting with it making those siloed decisions.

I'll just add that, I mean, to Poll's point, it's definitely I mean, we're not talking about replacing those advanced planning systems. I totally agree that, you know, they are good for what they were designed to do, but now with so much volatility in the you know, in the ecosystem, all those constraints. All that data gets outdated pretty quick, so you end up with plans that are not feasible. So I think the question or the issue is not about getting a better planning system or you know, revamping the planning system.

I think it's about having better assumptions and better decisions to drive or to feed those planning systems so they can actually have the flexibility that they are lacking today. And at least from my perspective, one of the big issues is that the design tools and the metrics the objectives around network design have historically resided in one part of the business and planning teams have resided in another part of the business, and these two shall never meet to some extent. Right.

That's you're one hundred percent right by designs, the flight chain is fragmented, is siloed, right. The transportation team is usually a separate team with a separate planning system TMS than the operations team with a WMS. And then you got the in treating with the advanced planning system and they're all making decisions and a lot of the times those planning systems are cost and capacity agnostic. You say, well, Paul, let's now is that one hundred percent true.

Is it capacity agnostic? A lot of times if you put a hard stop capacity in a system, if as you're taking those customer orders, you don't want the system to stop, which it would do if it hit a heart constraint. So generally it's just passed through to operations. So a lot of the times these people are making decisions, they're not really provided the information from which to make the decision from.

So Rafa talked about it's about making better decisions. What does a better decision look like for the for the organization? How aligned is that the decision with the strategy the executives are trying to accomplish here and. Planning is happening continuously, but with static data, right, I mean, which is also problematic here.

Exactly, which is part of the evolution as well of that we're trying to do with the technology. So when we talk about the buzzword of the digital twins and so on, it's just the idea of, hey, we need this constant feed of data to keep these models as updated as possible or whenever you need a decision. And I think the other biggest gap when I was leading the Customer Success Steam, this was a metric that we used to follow a lot, which was identified value versus realize value.

So we always were trying to teach our customers like, it's great, you have a lot of models you're making, you know a lot of scenarios, but anything within the design framework that will be just you know, identified value. You really need to cross the bridge and get into the plimbing systems to actually execute and realize that value. And of course we get into the issues of silos and peoples and different responsibilities or incentives. So it's actually way more complex than just the technology along.

Okay, I'm following you. I think what we're really talking about then, is this fundamental need to connect three things, the design, the network itself, right, like what does your supply chain actually look like? The plan, and then the execution of that plan. So like, what does this look like in practice, like be really practical, pragmatic, What would this look like in an organization?

The process that I think everyone is familiar with that normally connects these tries to connect is the S and OP or the IBP process, right that tries to bring it all together is generally discussed at an aggregate level, and that tries to bring everything together. But if you think I've run the S and OP processes, if you think in an organization, where do you get the information from which to frame that S and OP discussion? Generally is going to be from your planning systems.

And then the heart of the S and OP process is really what is the current trend of the business? Given the constraints of the suppliers and our ability to produce and support new product introduction and everything, what is the current trend of the business the demand, the revenue volume versus the annual operating plan or the executive commitment to the board of director's shareholders. Now, let's go through a scenario. Let's say there's a gap between your financial commitment to the marketplace and then your current trend of the business.

That's where the executives really need to make decisions on how are they going to evolve adapt their supply chain to close that gap. Quite often you're coming back and you're saying, can I let's run a scenario, how about we bring this product launch forward, or we accelerate the going into this specific market. Where are you going to run those scenarios? You don't have the data to support it.

You certainly don't have the transaction data. This is where scenario planning really comes into its own, and let's executives know that, run through the scenarios and understand the financial and operational impacts of some of those decisions they're trying to make to close the gaps to make sure that they can meet that financial objective. And so, if I'm hearing you correctly, what we're saying though, is those scenarios really should be ran in the supply chain design software, not necessarily in the planning software.

Is that correct? Because your planning software is heavily input dependent and it holds your current configure. Let's go through a scenario, Christy. Let's say let's say we're expanding business and we need to open up a new we're bringing a new supplier on board, or we're a wrapp a new distribution center.

Right, so in three months time, this capacity is going to come on board. Can I put that in my planning system today? Because it's not available to me today, right? And then at what level of detail am I going to put it in my plan system?

Normally there's a go live and there's a whole project about standing that up but these executives will have several things on the horizon that will impact the financial year end, which is where they've got to ultimately meet their financial objectives. So generally, the S and OP process, with scenario planning supported in their design environment, gives them the opportunity to run those scenarios baking in some of those decisions that are ongoing across different business units, to give them that strong picture of what's the financial and operational impacts of these decisions we're making.

I don't think it's feasible to run these scenarios in a planning system. Now. A lot of the planning systems have quote scenario planning capability, and that's phenomenal. That's supply and demand balancing within the infrastructure that you currently have.

Right if you're changing your constraints, your capacities, your suppliers, planning systems really struggle to run those scenarios. It is, yeah, incredibly challenging. I mean I ran S and OP when I was at me Johnson, and to your point, even if we knew we had a new product, or we had additional capacity coming on board the product development team, the PD team, you weren't putting anything into the APS or the ERP until it was one hundred percent approved, until it had gone through all the regulatory hurdles.

Right, So we were pulling things out of the planning system and putting it into Excel because it was the only option to kind of see what those impacts are. And what you're really saying is you've already made investments in KOOPA or a similar tool. Why aren't we love reaching those investments to really start to do more. Yeah, you're one hundred percent right changing And you say, well, don't I have test environments to do this?

Well, if you start embedding your test environment into a monthly process, then you've taken it away from the core function of being able to test functions for update. Right. So it gets incredibly challenging to incorporate some of these changes to answer executive questions before they occur. Right.

If I put it in a slightly different way, I think when you were talking about the gaps and analyzing the gaps, I still remember one of your fancy salizes that you have to explain that. But for me, it's all about creating the feedback loop. Right, Like I feel, companies are very anxious and put a lot of effort on in that order like design, plan, execute, and then everything ends there and then they start all over again, design and execute. So I think that final loop off.

Okay, let's learn like, why are we still seeing a gap here at the end after we did all this process kind of readjust and you know, circle back to the first phase rather than starting all over again. I think that feedback loop is very more than for the connection between the three agreed. Are there specific areas where you would think this is like a hole in one, like we shouldn't even we shouldn't even have to talk about it very much, right, it should just make sense. I can start like, I mean, there are definitely, I mean, we have several use cases that we can support within the platform, but I think the ones that come up more commonly to you know, get into the planning and get it into those feedback loops.

One will be the capacity planning, right like adjusting sourcing and production and making sure everything stays in sync and also maybe even put it in the inventory perspective, rebuild, inventory, cycle, stock, safety, stock things like that. I think that's a very common one. And perhaps the other one I will mention is on the transportation side. Because you could do a more strategic level road droub design transportation optimization.

But then as you get closer to execution and the changes that you might have or the volatility you might have week by week. Let's say we have customers that actually run their models every week, you can adjust base on the actual demand and the actual need of assets by location and things like that. So I think on my side, those first two could be a very good starting point for clients looking into this. I love it.

I love it. So I mean, at the end of the day, we don't make investments just to make investments, right, It's has to drive value, it has to improve performance. So it really isn't about the plans or the models or the systems. It's about what is going to deliver the results that the company needs.

So, Paul, what in your opinion, needs to change for planning. To drive better real world outcomes. So the key thing for me, and we talked about the S and O b IVP process, The key thing is how do we take the plans and we follow them through the execution right? And I think the first step of that is saying the planning system is great at holding the configuration, but it's not great at adapting.

Right, So let me give you an example here with ravel mentioned inventory optimization. Your deployment where you choose to stock product is an input into a planning system. It doesn't mean there's demand there, and as that demand changes, it doesn't necessarily change the planning system. If I have a forecastt demand and it satisfies the supply, that inventory stays there.

Well, your chief financial officer is probably not going to be super happy about the working capital that's deployed in a location that the planning system satisfied, but now there's no demand for right. So some of the going back to the concept of the I've got a collection of assets and relationships, when do they need to change? So one of the looking for quick return on investment is your inventory actually optimized? Why do we deploy things where they're deployed?

Can we rebalance it? How can I optimize that working capital? Working capital? I think really there's a lot of opportunities and a lot of companies unlocking that working capital.

The S and OP is a big area of return. Right. So if you think your supply chain is not adaptable today, how do you get there? You can be proactive but you can also be reactive at agile.

Right. I used to have a boss. I used to say, if you can't be proactive, you need to be really agile and reactive. I think the design capabilities give you that.

If you have what we termin always on supply chain design digital twin, yes, you can get ahead of a lot and mitigate a lot of the disruptions that are coming through because you can run contingencies and you can safeguard and not subject yourself to the lost sales of stockout positions and everything else. You can rebalance your inventry to make sure that you're continuing to those revenue goals, but reactive as things are happening. Can you read, can you rebalance? Can you look at those capacity shortfalls or those service level shortfalls from suppliers and can you respond to those to ensure that you're you're still delivering value and delivering on the expectations.

Right. So I'm going to ask you, guys, how do you recommend people get started? But before I do, I want to address what I'm going to call the elephant in the room. And by that what I mean I think there's a perception in the market that this would be incredibly expensive to do.

But I think one of the things that I've been really excited about that I've seen in the last couple of months of working with Koopa is you guys are actually changing your model and and you're changing how you interact with customers. So do you want to spend just a few minutes to kind of highlight like like that. It's a it's a really big shift in how Cooper's thinking about this, correct. Yeah, I think the main change we have done over the past twelve months is to really align our very own Cooper you know objectives and incentives with our customers objectives and incentives.

So rather than charging or selling our platform, you know, by the traditional number of users and as everyone has been doing business in the task, we're actually trying that to use such and value right. So I think that's a big shift because if you are not getting value out of the platform, then we are not getting you know, our incentives on our site, right, So customers will be essentially paying for what they use for the value they're extracting from the platform, and that essentially incentivizes the whole team, like services, customer success marketing you call it, to actually drive more adoption, more use cases, more value together with our customers, rather than we already made a transaction, you bought you a bunch of licenses.

I'm don you figure it out. We are now more than ever very close to our customers on this. Well, and it actually, from my perspective, it helps to kind of tear those silos down, where previously we would have said, well, this this group, whether it was logistics or transportation or maybe a network coe, they owned the licenses and they were not going to give up a lot of functionally to another group. Right, So this really allows better collaboration within the customer base of those various stakeholders.

Okay, So as a practitioner, it was always a point of frustration for me because the capabilities were phenomenal, but we almost penalized customers, right, So, as I had my center of excellence, I really wanted to set up processes to allow the transportation team to optimize. But in the old model, we've kind of penalized through the pricing for doing that. Right, We're moving away from that. So Cooper's done a couple of really good things for us, right.

It gave us the scale and the security, the ability to uh to support. So the investment from Cooper has been phenomenal for the capabilities overall. The use user based pricing is great and that overcomes a huge point of frustration. At least it was for me.

I imagine for many people. And then the other thing that I don't think everyone realizes is as we invent and there's a lot of investment, the world's changing and the agentic platforms coming through, I don't want another skew for every time we do something clever. Right. So the capabilities are developing, but it's developing and it's embedded in the capabilities that we have.

So when you form a strategic relationship, you're benefiting from all of that investment and where we're going to. So I really I used to get frustrated when companies would do something clever and say, but I have this extra skew, right, so you got. To charge I'm charging you more money to use this? Yeah, no, I agree with you.

I it's incredibly aggravating. Okay, So let's get to the juicy part. How does somebody get started? Right?

I mean this seems like a lot. Do I have to rip everything out? Do I start over? I'll say the good news is that you definitely don't need to rip and replace anything.

We are usually coming to ougment what you have and complement and give that flexibility that we're talking about. So for me, the best place to start will be to you know, first of all, peak one or two high value decisions or areas that we want to improve. Then you know, bring the proper capabilities or close that gap that you might be missing. But again it's going to be augmenting, complementing what you already have, and then essentially start creating those you know, feedback loops that we were talking about.

So there is obviously a component of technology implementation consulting, but for me, it's also about you know, how the organization is operating, how we are aligning you know, those different areas, how we're breaking down the silos. So it goes beyond the technology, but it definitely pays off if we will invest into this. Yeah, definitely there's no rip and replace. This is if you think of this scenario, planning capability applied to the right processes and supporting the executive team more is really a phenomenal capability Coopers.

As I think you know, maybe many of the listeners know have thousands of successful customer implementations. Maybec is incredibly experienced in this space as well, So how do we get the customer from where they are today to the point the return on investment? Right? I like to call it funding the journey.

So generally the approach I would recommend is, as Raphael said, Let's find where the real pain points are at the moment, the frustration points, and that's the low hanging through. Let's unlock that and then think through what else can we use this capability for to support support you achieving those service levels, support you achieving the growth aspirations of your executives, to take away some of the pain of those disruptions, mitigate them as much as possible. So there's a huge amount of opportunity right across supply chain, whether it's in inventry, warehousing, transportation, production planning.

So there's a lot of opportunity out there. Yeah, I love it. I mean, I'm a true supply chain NERD, so I'm like, oh, this is so exciting. If people want to learn more, are they want to continue the conversation?

How do they get in touch with you? Where can they find additional information? Yeah? Absolutely, I think it can definitely reach out directly, reaches out through LinkedIn, we will definitely connect with the right people.

But this is also part of why we are building our partner ecosystem. Definitely called me back as well. I think we have been working side by side on addressing these challenges. And I'll say also, the best way to get to know more is join us at the various events that we're going to be participating in the following weeks.

We have a very tight schedule from now till the summer, so I know there's gonna be a lot of opportunities to interact, listen to our panels, wearing ours things that we're doing just to get the word out. Yeah, as Rafael said, weed, so this is I call this conference season. So I sm Inspire got a whole host of a whole host of events that we do, so please come and say hello to us there. Often we're side by side with Maybec.

The Cooper website is also phenomenal as well. We've got it. We've got a huge amount of information and resources there. So if you just like that sounds interesting, let me go learn more.

Go to the Cooper website. We've got demonstration on there. We've got a lot of white papers on there, so but reach Out I love it. UH LinkedIn for me as well.

Although I always tell people to be patient, I will get through all the messages eventually. Sometimes I'm a little slow. But I will be at Gartner. The Supply Chain Symposium will be actually Mebach will have a booth both at the US and the European symposiums.

I personally am going to be at Kooper Inspire. It's my first one. I'm super excited about it. And then people can also find me in May at Home Delivery World in Nashville.

So if you're attending reach Out, I'd love to connect. We can get a coffee or a cocktail or just you know, shoot the breeze a little bit and get geeked out on supply chain. And as always, thank you so much for joining us. Appreciate you, Paul, Appreciate you Rafa.

Can't wait to spend some quality time with you over the next couple of weeks, and so excited that you joined us. On speaking of supply chain, our next episode is actually centered on warehouse automation trends with me Box owned Sophie James. So I hope everybody will join us again in two weeks as we continue to unpack what's happening in the world of supply chain. You've been listening to Speaking of Supply Chain, a meboch podcast.

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