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Is the annual budgeting exercise affecting your Supply Chain execution?
Most companies are currently in the process of finalizing their next year’s budgets. It is quite an effort-intensive activity in many companies. As a result, the teams find it difficult to focus on executing their day-to-day supply chain execution and improvement activities.
I have spoken to many teams and the conversations indicate that a few activities do suffer. The first one is the review cadence. Teams normally have a schedule of reviewing their supply chain performance metrics – a few are reviewed every day, some higher level metrics are reviewed in a cross-functional manner every week, and the top metrics are reviewed with the top management every month. Many of these review meetings were skipped last month and a few are likely to be skipped this month as well.
Exception monitoring has also suffered in the process. This activity normally leads to improvement initiatives through CAPA (corrective and Preventive Action). How do we handle it?
My suggestion would be to decide at the level of granularity of the annual budgeting process, which leaves enough time for the teams to carry out their regular supply chain execution and improvement initiatives.
Does it ring a bell?