Planning a More Balanced Supply Chain

Phil Schmidbauer, VP Solutions, ODW Logistics

Analyst Insight: Planning succeeds when all facets of a supply chain, including procurement, logistics and planning, work toward the same objective. The goal is finding the right balance of speed, cost and quality. There are no technology solutions available to optimize every aspect of the supply chain. Companies must organize business processes, technology strategy and organizational structure to incentivize the right behaviors for true organizational success.

Planning and optimization often falter when functions work in isolation. One team pursues a lower piece price at the source while another absorbs the impact on inventory and freight cost. The outcome is a low unit cost with a high total landed cost. Effective planning evaluates the end-to-end flow and accepts informed tradeoffs. Additionally, systems need to be aligned to share appropriate information, allowing more effective decision-making.

The handshake between a transportation management and warehouse management system is a great place to illustrate a required balance. An optimal transportation optimization may cause higher variability in the warehouse environment – causing labor utilization rates to drop. The two disparate systems are not designed to understand the operational impacts on each other. This is when organizations need to ensure business processes allow for effective balance across disciplines.

Data and tools should support the plan, and allow for process-monitoring. Real-time analytics can enable operators across the supply chain to effectively react. If inbound production is delayed (planning) and outbound orders will be affected (operations), multiple parties need to be notified to make adjustments. Technology might not provide all the answers, but an effective data strategy coupled with real-time metrics can help supply chains achieve balanced efficiencies.

Performance metrics keep the organization aligned. Freight is only one cost element. Retailer fines, detention and the labor required to hit the plan must be included. Procurement, supply chain, HR, operations and other groups must all have performance metrics aligned with organizational goals. Additionally, organizations must understand where those goals could potentially compete. If procurement only cares about piece price and ignores the cost of inventory, their actions could be costly.

People remain central to execution. Technology speeds routine work, but experienced teams manage exceptions. People working on effective cross-functional teams will continue to support improved supply chains. Clear roles and simple playbooks help teams act quickly when conditions change. Frontline authority allows adjustments when data suggests one course of action and the operation indicates another. This approach keeps plans intact during demand variations and supply chain disruptions.

Optimization also supports sustainability. Higher fill rates, fewer touches, and smarter routing reduce fuel consumption and emissions while improving reliability. When planning connects these outcomes with cost and service, the result is a network that is leaner, more predictable and better prepared for change. People must continue to navigate disparate systems and build visibility into critical data to measure true value.

Outlook: In 2026, planning and execution will be more tightly linked. Technology will continue to enter the marketplace. Those best equipped to align their organizations toward a common goal, and effectively drive real value for their customers will thrive. Most importantly, companies who understand the cross-functional value of planning and optimization will truly find ways to improve speed, cost and quality.

Resource Link: https://www.supplychainbrain.com/articles/43231-planning-a-more-balanced-supply-chain