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Managing operational change with a master plan.

Article Excerpt
EXECUTIVE SUMMARY

The ability to identify the best value chain-enhancing opportunity among alternatives is critical to business success. Enterprise master planning allows a company to analyze an existing supply chain and modify it to meet future requirements, An effective enterprise master plan provides an unbiased analysis of options across integrated operations, logistics, and financial parameters.

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Organizations of all sizes face pressure to increase profitability, enhance system performance, and accelerate the level of integration of their value chain. To excel in this competitive environment, an organization must choose wisely between a multitude of choices that hold the promise of optimizing systems and enhancing customer satisfaction. A partial list of choices includes acquisition, relocation, consolidation, new product introduction, lean enterprise transformation, and supply chain integration. To add to the challenges of the decision-making process, market forces continue to reduce the amount of time allotted for organizations to reach and implement change.

Management teams must continuously ask two critical questions regarding systems in place to evaluate opportunities and implement change:

* Does the organization's management team have appropriate business tools in place to quantify alternatives and identify the most appropriate path forward in a timely manner?

* Do business tools and the existing decision-making process effectively capture and quantify the overall impact of the proposed change across the organization?

More than ever, an organization requires a structured business planning and decision-making methodology to define current conditions, identify opportunities, compare the impact of various opportunities, and quantity the most appropriate path forward. In certain industries, this integrated business decision tool is referred to as an enterprise master plan.

Enterprise master planning (EMP) is the process of analyzing an existing reiterated operation and supply chain system and modifying that system to meet future operational, supply chain, and financial return requirements. An effective EMP process provides an unbiased analysis of value chain system options (usually as side-by-side comparisons) across integrated operations, logistics, and financial parameters. The ability to identify the best value chain-enhancing opportunity among numerous alternatives is a critical requirement for a business's long-term success.

There are four elements in the development and implementation of an EMP:

* Formation of an EMP team with the necessary skills, management direction, and time to undertake plan development and direct implementation.

* A thorough examination of existing systems and identification of change opportunities consistent with organizational strategic direction.

* Developing documentation and business decision tools that compare opportunities, define, quantify, and justify the enterprise master plan.

* Physical implementation of the plan.

Get resources in order

Significant time, human, and capital resources are required to develop and implement an enterprise master plan. EMP requires an implementation horizon of two to five years. Unfortunately, the marketplace...