Supply Chain Risk and 2010 Financial Planning

The months of June and July are typically when many large corporations initiate efforts to refine or develop their business plan outlining their goals and associated actions for the next few years. Depending on the company this may be called the "Fall Plan," the "Annual Strategy" or something similar. More often than not it is really just a budgeting exercise with a set of assumptions determined by a person or group somewhere high in the corporate bureaucracy that are passed down to the operating units.

Too often the assumptions are simply some variation of "take last year's figures and add some target percentage for growth" coupled with "cut some target percentage to show we're getting more efficient." The 2010 planning cycle assumptions will be particularly interesting to observe. Given the severe recession and volatility in commodities, currencies and energy, what is considered a normal base to apply those magical target percentages?