In the supply chain world, we often talk about planning, scheduling and execution. In this two part blog post, we will try and explain this from two points of view: One from real life and another from a supply chain perspective.
You always wanted that road trip to Florida. You have dreamed about escaping the cold weather of the north east to the sunny beaches of Florida. You wanted to visit the attractions in Orlando, Miami, and Key West with your family. So, you plan ahead, discuss with your family, and then settle on December for the trip. You even begin to do research on things to do when you are in Florida based on your and your family’s preferences. Based on all the input that you received, you go ahead and book tickets and hotels at the main attractions as they seem to get expensive as time progresses. Because you booked early, you got good and more importantly, refundable deals, just in case you change your mind. You are already looking forward to December and it is still July!
This is planning.
It is late November already, and you begin to think about the actual dates of the trip. You carefully chalk out the trip, with start and end dates in mind. You even go ahead and book hotels at stops you have planned. You decide that you will drive after breakfast every day, and will stop at your hotel at not too late an hour so that you can do it again the next day. Your family also suggests to add certain attractions to the trip. This will require a 2 hour detour and you will have to buy more expensive tickets to get in as the deal prices are all gone. But you agree to change the plan.
During Planning, you are at your proactive best, deciding based on what is best for you. If your family had always yearned to go to the Grand Canyon, you would have planned for that because that is the best thing for you and the family. Planning is the stage where you are defining what you want to do, what brings the most value. If you plan well, you can also do a lot to prepare: study the area, plan your visit, look for deals, etc.
This is scheduling.
Finally, you begin the drive. Everyone is in the car: the family, the dogs, your bags, some snacks, and most importantly, your trusted navigation device. As you enter the 3rd hour of your drive, the GPS highlights congestion ahead and suggests an alternate route. You evaluate and decide against the alternate route. Your arrival time is accordingly delayed by the GPS. After an hour of fighting the traffic, you decide to agree with the GPS and take the newly suggested detour. Finally, after going through a lot of driving time, your family decides that it cannot go any further. You take the exit and check the family into a hotel. You call the hotel where you had previously booked a room and they tell you that they cannot refund the money anymore because the cancellation is after the designated time. So, they will charge you for the night. What a bummer!
During Scheduling, you are somewhat reactive. You can still make changes to the plan, but it might cost you extra. Ideally, you stay within the parameters of the plan or it will cost you a lot. Fun is limited to be within the parameters of the original plan.
This is execution.
Similar back and forth goes in a supply chain plans. Companies plan, then schedule and then finally execute. At each stage, new information enters the system requiring changes to the plan and the schedule. Changes typically get more expensive as we get closer to the execution stage. If a good plan can be executed, a company can save a lot of money.
During execution, you are reacting to real time data. By this time, you are at the mercy of the outside conditions and do not really have a whole lot of planning to do. Your decision is often a choice between bad and worse (keep on driving for the 14th hours or take a hotel room and lose the money paid on the other one).
Here is the follow up post on how these thoughts around planning, scheduling, and execution can be applied to supply chain planning.