Business Planning

Why do business planning with sophub?

Planning is essentially to get ahead of the curve and be positioned correctly when reality hits your business. The article will cover why cross functional business planning is crucial for your business to be profitable and to enable growth in the next 5 years.

In a world with volatile markets, global competition, supply restrictions and ESG conditions you might think planning is not worth doing. Instead you might think I will drive my business by day-to-day operation and avoid the planning cost and complexity. BUT no planning expose you for a lot of risk and you will miss opportunities.

Lets first define what we mean by planning. Below the basic parts of planning are depicted.

sophub planning consist of...

  • Cross functional planning concept
  • Segmentation of your demand
  • Planning future sales
  • Planning future promotion and price settings
  • Planning product and market phase-in/out
  • Financial budget
  • Planning buffers like inventory and capacity
  • Planning supply and balance with demand
  • Planning growth/risk opportunties

We make a plan to ensure we can execute on the business strategy for growth and profit. The plan is tactital in nature, and answer the "HOW"'s: How can we reach the strategy. How can we ensure resources are available. How much do we sell monthly. How much to order from our vendors. How to allocated resources.

All plans are interconnected through the monthly planning cycle to ensure business have ONE plan for the complete business. Whereby finance, sales, marketing, production and purchase are working on the same plan to avoid "silo"-planning.

Does it look complex to make a plan? It is really not. Especially not with a solution like the one provided by sophub. sophub provide the people, method and the application, an integrate it with your day-to-day operation. We just need a person in your business who together with us can anchor planning and operation for quickly gain growth, profit and transparency. sophub can underpin all the blue puzzle pieces with our sophub application and our managed service.

How to establish business planning

Lets elobarate on the conditions required for excellent planning. To maximize business profit based on planning requires simplicity, data insight in your market and supply channels, and cross functional integration. Many elements have to be intercoordinated. The structure of your supply chain has to play together with your processes, your people and the technology you use. Just one lacking behind limit your possibility to maximize business outcome.

Below you can see how sophub can underpin your planning approach - not just by technology but also with people and methods within our managed service.

The complexity refer to all aspects of your business. You might have multiple distribution channels, market regulations, the product port folio is broad and diffuse, you are organized within functional areas govern by rules and complicated processes, your applications requires deep training, you production is complex, or you have thousand of vendors. Complexity and bureaucracy are like a natural law: The bigger company, the more complexity.

Complexity reduction is crucial to enable insight and maximize outcome of the planning. At sophub we have invented simple cross functional concepts to reduce complexity. Our sophub application are inlayered with the concepts and will help reduce the complexity of your product and customer port folio, the complexity of communication accross your organisation, the complexity of garthering data insight in your market channels or your supply channels. The application will help you ahead of curve and identify problems before they occurs. You will understand the drivers for business profit.

Cross functional planning have many facets. It is not just to establish a S&OP process. Many additional elements have to be in place. First we want to avoid the tendency to silo-decisions by having a planning concept shared between organisational units. Second we want to avoid silo-applications that optimize the functional results harming the overall business profit. Third we want to enable concurrent planning to see the consequences taking in one area affect the rest of the business. Finally we want technology to help us to identify market and supply chain opportunities and highlight the risk we are taking.

Are you not able to checkmark all in your current setup, you should consider sophub application and our managed service. We built the application with those four features as the backbone.

Technology is an important driver for automation and data insight. Machine learning, artificial intelligence and data analytics are technologies to derive automation and data insight. BUT those technologies are not stronger than the data it relies on, and second not a dollar worth if your planners are not able to bring the decision support into actions.

Data Insights are important data-trends translated into valuable business observations. An Insight could be that sophub has identified a pattern in the customers behaviour, indicating that they are leaving. Or that campaigns for a specific product are not profitable.

The data insight will be published in alert, and if you buy our managed service we will make easy decision support for your management and operational teams.

The sophub application is like a radar and it will monitor your market and supply data like sell-out and channel inventory and master data setup. The data quality is validated and alerts are generated into a business context and aligned to the planning concepts. In the sophub managed service we will make decision support for your management and operational teams based on our technologies. Whereby you get hard-to-get data experts as a wing-manager, who can serve and drive the decision support together with your operational teams.

The transition from planning to execution

Turning planning into execution/operation are for some areas straight forward, but for others it requires carefull considerations. We often see businesses using forecasts directly for logistic execution and the side-effects is out-of-stock or high inventories. Like we also see prices for promotion directly will harm you profit compared to no price reduction. We can continue with many of the tail products reducing profit without providing any other positive business effect. To avoid situations like described the cross functional planning concept and technology should go hand-in-hand to enlight your operational teams.

At sophub turning planning into execution is a cornerstone of our application. It is typically here all other applications fails, because the planning concept and planning features are not differentiated towards your customers demand and are not cross functional coordinated. The sophub application and our managed service will ensure you get a successfull transition from planning to execution.