New data from Board International reveals that senior supply chain professionals are placing a renewed focus on scenario planning in response to a volatile business landscape. According to the new Board 2024 Global Planning Survey, 73% of decision-makers are taking planning more seriously, with the Ukraine War, cost-of-living crisis, and ongoing supply chain disruptions acting as key catalysts.
"Industry leaders face immense pressure to navigate a complex and unpredictable business environment. The need to shift from conversation to action around scenario planning has never been more important,” says Jeff Casale, Board’s CEO. “But in far too many cases, organizations remain limited by legacy tools that are prone to errors and siloed data - leaving them vulnerable to costly mistakes and outdated insights. To better compete, they need to be proactive about anticipating disruptive events, modelling calculated scenarios and aligning strategic, financial and operational plans.”
Cyberattacks, labor shortages and fluctuating oil prices top the list of key business threats that decision makers are currently making plans for.
Key takeaways:
- The survey reveals signs of planning fatigue within many companies, highlighting a 14% decrease in how seriously companies are taking planning compared to last year. Similarly, just over three-quarters of supply chain decision makers admit their organization makes planning decisions based on assumptions. Together, these findings suggest that many supply chain professionals are struggling to implement data-driven decision-making. Nearly one-third of respondents report that ineffective planning has impacted profitability, productivity and the ability to drive innovations, new products or services.
- The survey also reveals that too many companies are simply scanning for potential crises rather than actively preparing for them. For example, 43% of respondents are discussing rising tensions between China and Taiwan but only 29% are actively scenario planning for an escalation in the region. The survey also found that 72% of supply chain professionals usually disregard the most extreme scenarios when planning, suggesting most companies are leaving themselves open to risk should the unexpected happen.
- The survey identifies a concerning agile planning gap that highlights a significant disconnect between aspirations and reality, and that 76% of respondents globally believe their organization is equipped for agile planning, but only 14% have the right processes and technologies in place to make this a reality.
- For companies looking to close this gap, the survey found three key barriers: poor data quality and governance, ineffective processes based on largely manual activities and a lack of modern tools and technologies.
- The survey found 57% of supply chain planners globally use spreadsheets for at least half of their business planning, and 72% of companies fail to consider enough potential future scenarios when planning.
- Organizations are looking to artificial intelligence (AI) to overhaul their approach as they shift toward data-driven, agile planning, with 41% of respondents exploring machine learning to improve decision-making, while 38% looking to AI-powered business intelligence tools. One-third of respondents also plan to adopt generative AI tools to enhance their decision-making process.
"By embracing intelligent planning tools and agile planning processes, companies can analyze internal and external data to plan for a range of eventualities, to drive more informed, proactive decision-making and improved business outcomes,” adds Casale. “Over the next decade, companies that don't shift to running their business on a fully integrated planning system will be facing an uphill battle.”
