Step 2 - CONSEQUENCES - Ask "What does this mean for us?"
Next step, list out the intuitive or logical future impacts and consequences that can be drawn from the TRUTHS in the previous step.
- Your business may already be experiencing some of them. They can often be your current pain points, but amplified.
- Try to find other consequences not yet surfaced or discussed. Many may arise from "inconvenient truths".
- It's key to bring forward anticipated issues within the next 4-12 weeks.
Step 3: INSIGHTS + ACTIONS - Create some powerful insights and proactive actions.
Take a moment to let it all sink in. Maybe even take a lunch or a coffee break. This allows for some subconscious processing time and digestion of the first two steps.
- Bring the group back together and brainstorm proactive measures the team can take to mitigate or respond to some of the anticipated consequences.
- Teams can then refine, cull and prioritize these into a real operational response plan for the next 4-12 weeks (or any other future time horizon).
Try it out!
Try it out with your teams. I prepared a sample run through of the exercise below with a "Supply Chain & COVID-19" hat on, but it will work with any team or any problem. I hope it illustrates how to apply this response planning method to COVID-19 and other unplanned events. I'm happy to answer any questions and would love to know how it goes!
Truth and Consequences - "COVID-19 Example"
Truths & Assumptions
- Civic shutdowns will persist, but there is talk of opening up businesses again.
- People are concerned about the effects of a 2nd wave of infections and subsequent re-shutdowns.
- A proven vaccine and distribution will take 12-18 months. It is also not guaranteed that a vaccine can be developed (think of the common cold).
- Many people have lost their jobs and have used up much of their emergency savings.
- We cannot predict when normal life will resume and if/when there may be future civic shutdowns or disruptions.
- Demand will be stop-start, some overwhelming, some under. We'll be continuously course correcting.
- Making accurate forecasts (forecast accuracy) is a fools errand at this point.
- Time will be better spent improving our demand sensing and operational responsiveness to large fluctuations.
- We will build more flexibility into our supply chain response so that we can rapidly adjust to what will be unpredictable, real-time demand.
- We will assign teams to develop "+/- 50% FLEX" plans that build extra variability capacity across the areas of labour, storage, suppliers, line production capacity and transportation.
- We will also implement a system of daily or weekly virtual stand-ups with suppliers/customers/operations to detect changes in demand quickly and communicate them upstream.
- We will establish a central cross functional operations response unit (S&OE) that will monitor realtime feedback and have authority to put "+/- 50% FLEX" plans into action.