strategic supply chain planning

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Title: How To Do Strategic Supply-Chain Planning.

Authors: Sodhi, ManMohan S.

Source: MIT Sloan Management Review; Fall2003, Vol. 45 Issue 1, p69, 7p

Document Type: Article

Subject Terms: *BUSINESS planning*MANAGEMENT science*STRATEGIC planning*SUPPLY chains

Abstract: Any company that has a global supply chain should consider introducing its strategicleft hand to its operational right hand. Senior managers formulate strategy to maximizeshareholder value; supply-chain planners run optimization models to minimize costs.Consider a strategic supply-chain planning exercise at a polyvinyl chloride (PVC)manufacturer that we will call Acme Vinyl Co. Acme's North American revenues camefrom PVC for building (55%), packaging (15%), consumer goods (10%), the electronicindustry (10%), the automotive industry (4%) and from non-PVC products (6%).

Although business-strategy formulation also uses tools and flame-works, it requiresmuch more creativity than tactical planning. For tactical supply-chain planning, thedecision options and the factors affecting them (production capacity, distributioncapacity, variable costs, demand forecast) are clearly defined. Optimization models fortactical supply-chain planning and models for strategic supply-chain planning differonly slightly in their design, but markedly in their use. In scenario planning, seniormanagers build internally consistent, alternative views of possible future outcomes.

Full Text Word Count: 4476

ISSN: 1532-9194

Accession Number: 11162982

Database: Business Source Premier

How To Do Strategic Supply-Chain Planning

Senior managers formulate strategy to maximize shareholder value; supply-chain planners run optimization modelsto minimize costs. Combining scenario planning with supply-chain planning achieves the best of both worlds, whichleads to long-term competitive advantage.

Any company that has a global supply chain should consider introducing its strategic left hand to its operational righthand. Strategic supply-chain planning that combines aspects of business-strategy formulation with aspects oftactical supply-chain planning can make each far more valuable to the planning effort than either would be alone.

Strategic supply-chain planning is the Pegasus of strategy: It can soar, but it also needs to keep its feet on theground. Although companies routinely weigh long-term supply-chain-related decisions in light of alternative sourcesof supply, new geographic markets or new products, various levels of management use different approaches, oftenin isolation. Senior managers make such decisions as part of formulating business strategy; supply-chain planners,as an extension of their tactical supply-chain planning.

How should companies ensure that relevant supply-chain details inform the business-strategy formulation and thatstrategic direction and the supply chain are in alignment? They can do so through early communication betweensenior managers and supply-chain planners, which shortens strategy-implementation time while letting each grouppursue its forte: senior managers formulating strategy to maximize shareholder value; supply-chain planners runningoptimization models to minimize total supply-chain costs.


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One Company's Story

Consider a strategic supply-chain planning exercise at a polyvinyl chloride (PVC) manufacturer that we'll call AcmeVinyl Co. Acme's North American revenues came from PVC for building (55%), packaging (15%), consumer goods(10%), the electronic industry (10%), the automotive industry (4%) and from non-PVC products (6%). At the end ofthe 1990s about 4% of those revenues came from Asia. Acme had been seeing revenue growth for several years,mostly as a result of acquiring other PVC manufacturers.

With fragmented spare capacity around North America, a falling stock price and a need to rationalize thepostacquisition supply chain, Acme's leaders considered their options. Some favored consolidating manufacturinginto one or two new mega-plants; others suggested closing existing plants or lines. Management chose to do astrategic supply-chain planning exercise to assist decision making.

The Planning Spectrum

Strategic supply-chain planning falls in the middle of a decision-making spectrum that has business-strategyformulation at one end and tactical supply-chain planning at the other. (See "Strategic Supply-Chain Planning andthe Planning Spectrum.") With a focus on fundamental changes in manufacturing and distribution capacity, it islong-term in scope and impact but can benefit from detailed optimization models and advancedplanning-and-scheduling (APS) technology that is more often associated with medium- and short-term planning.Used in this strategic context, the tools help determine what would be an appropriate supply-chain configuration forsourcing and which plants or distribution centers should be closed or kept open.

In contrast, tactical supply-chain planning is short- or medium-term in scope and impact, with supply-chain plannersusing past demand to make forecasts for the near term and adjusting these forecasts on the basis of marketintelligence or planned promotions. Used in this context, optimization models and APS technology help determinewhere and when to produce what items and how to distribute them.

Planning Processes and Optimization

Although business-strategy formulation also uses tools and flame-works, it requires much more creativity thantactical planning. The optimum route to maximizing shareholder value is rarely obvious. It takes creative thinking andfreewheeling negotiations to identify, understand and agree upon possible actions. Computers and spreadsheetssupport analysis, but they don't determine strategy.

For tactical supply-chain planning, the decision options and the factors affecting them (production capacity,

distribution capacity, variable costs, demand forecast) are clearly defined. The goal of minimizing total supply-chaincosts -- for manufacturing, storage and handling, and transportation -- is narrower.

Because tactical planners can identify beforehand possible decisions and factors that might affect these decisions --and can build those elements into the software -- they can use optimization models that rely on mathematicaltechniques. The models make recommendations that both minimize costs and help companies meet forecasteddemand without exceeding production and distribution capacity. Advanced planning-and-scheduling technologiesare available from several companies.(n1)

Business-strategy planners can't plug clearly defined factors into software as supply-chain planners do, becausestrategy formulation is, in part, about trying to identify just what those factors are. But strategic supply-chain planningcan benefit from appropriately used optimization models because tactical supply-chain models can be extended toinclude strategic decisions about closing or opening plants and distribution centers. APS vendors offer software forthat purpose. The factors rarely change -- production capacity, distribution capacity and variable costs. The goal of

minimizing cost is extended to include the fixed costs of keeping plants and distribution centers open and theone-time costs of opening new ones and closing existing ones. These more strategic computer models can thenguide decision making.

Optimization models for tactical supply-chain planning and models for strategic supply-chain planning differ onlyslightly in their design, but markedly in their use. Even if supply-chain planners tweak the production and distributionschedule obtained from tactical models to expedite an order to a key customer, they largely retain the model'srecommendation. In contrast, when using a strategic supply-chain model, managers are trying to determine howmuch the opportunity cost of a particular decision differs from the model's recommendation.

At General Motors Corp., for instance, Electronic Data Systems Corp. consultants found that 90% of the time, GMmanagers used their models' recommendations to benchmark actions that they were likely to consider.(n2) Thecandidate decisions were based on qualitative criteria not included in the models. Creating benchmarks in this way is


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unique to optimization models using linear programming, a method using advanced mathematics to capture all theconstraints, such as capacity, and to find the best possible recommendations that would minimize the total operatingcost or some other stated objective. Such models guarantee the lowest possible supply-chain cost. Spreadsheetcalculations or simulation models cannot provide that sort of benchmarking capability.(n3)

Use of Optimization for Strategic Supply-Chain Planning

A variety of industries have successfully implemented optimization-based tools, including one called StrategicAnalysis of Integrated Logistics Systems (SAILS).(n4) Baxter International Inc. used SAILS software to evaluate

consolidation approaches following its 1985 acquisition of American Hospital Supply Corp. SAILS also helped PetInc. assess supply-chain synergies from two potential acquisitions. In another case, a personal-computermanufacturer made successful strategic use of an optimization model for its global manufacturing and distributionnetwork.(n5) GM uses a tool called Production Location Analysis NETwork System (PLANETS) to determine whatproducts to produce -- and how, when and where to make them.(n6) The now defunct Digital Equipment Corp.(DEC) probably lengthened its life by using supply-chain models to decrease costs.(n7)

The Need for a Combined Process

Clumsy integration following mergers or acquisitions points to the dangers of relying on only one type of decisionmaking. M&A business-strategy formulation rarely entails the use of models to optimize the supply chain before andafter a merger, even though most operating costs reside in the supply chain. In one study, researchers surveyed 700high-value international mergers and acquisitions occurring from 1996 to 1998 and found that failure to integratesupply chains was the main reason four out of five deals "failed to enhance shareholder value"(n8)

Using an optimization model without a good strategy is similarly lacking. DEC's strategic supply-chain planningsystem of the early 1990s improved manufacturing, distribution and service, but, without a robust business strategy,the company ultimately succumbed to acquisition by Compaq Computer Corp.(n9)

As supply chains become increasingly global, managers are making more strategic decisions about supply-chaindesign and reengineering. Thus supply-chain management has evolved from a function garnering little attention orprestige to a highly visible and respected one.(n10)

But improvements in tactical supply-chain planning resulting from the use of technology from advancedplanning-and-scheduling software vendors has created unwarranted expectations that, with similar software, seniorleaders could delegate strategic supply-chain planning to supply-chain planners. But senior executives' aloofnessfrom strategic supply-chain planning tools creates the same problems as ignorance of tactical advancedplanning-and-scheduling tools. DEC likely relied too much on supply-chain planners. And after Nike Inc.'s $400

million APS technology implementation, $100 million in inventory got misdirected, ultimately triggering a $2.5 billionloss in market capitalization.(n11)

The reason that senior managers keep aloof is lack of knowledge, and even suspicion. Managers at RoyalDutch/Shell Group, for example, harbored a distrust of optimization models that biased the company against usingsuch models in its scenario-planning processes during the early 1980s.(n12) The extensive detail, rigid structure andmanagers' lack of familiarity with optimization models aren't conducive to the freewheeling discussion that strategydevelopment needs. Moreover, because management education is focusing less on analytical strategic planning andoperations research, M.B.A.s rising to the senior ranks since the mid-1980s have shown less and less interest in thetechnical side of management.(n13)

That's why they need input from supply-chain planners who are familiar with optimization models. Only through aseamless process that encompasses those who are developing strategy and those who are using detailedsupply-chain models can companies align their business strategy and their supply chain.

Scenarios and Scenario Planning

In scenario planning -- a flexible process for formulating business strategy -- senior managers build internallyconsistent, alternative views of possible future outcomes, including some that are "unthinkable," as Herman Kahnsuggested in his 1950s examination of Cold War scenarios.(n14) Typically, to keep the focus on important factors inrelation to the long-term future, only a few business scenarios are developed.

Building scenarios is more art than science. The creative input needed from managers differs too much from onecompany to another for experts to offer more than guidelines.(n15) (See "Three Approaches to Scenario Planning.")Leaders creating business strategy use "what if" situations based on the plausible interplay of factors expected tohave long-term effects. The only constraint is plausibility.


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Erik Larsen, professor of management and systems at London's Cass Business School, has identified three phasesof scenario planning. Scenario building involves identifying issues, driving forces and factors that produceuncertainty, then devising rough scenarios that are further fleshed out. In scenario planning, managers evaluatepossible decisions, policies and strategies to determine their effects in each scenario, modifying and reevaluatingthem as necessary. Scanning the business environment involves checking early indicators of change in theenvironment to see which scenario or combination of scenarios is actually unfolding, thus enabling managers torevise and refine the decisions made earlier in Phase Two.

Consider Acme Vinyl's scenario planning in light of Larsen's approach. Acme managers deemed three decisions as

likely candidates: first, the rationalization of existing production capacity and the closing of plants or parts of plants,while possibly expanding other plants; second, the concentration of production at one or two new megaplants; andthird, the rationalization of the company's distribution network, the closing of some distribution centers and theopening of others.

They identified four main drivers affecting the company's prospects: macroeconomic forces that determine growth inthe gross national product (GNP) of the United States and Canada and the growth of demand in most sectors; theefforts of western European governments and the European Union to phase out PVC, partly in response toGreenpeace activism; fluctuating oil prices and their impact on the cost of raw material (and the company's margins);and the cycle of prices for PVC goods.

The managers also predicted business trends: continued U.S. construction growth; slower industrial growth in theUnited States, Japan and western Europe; rapid growth from 2000 through 2005 in Asia (excluding Japan); agradual shift from PVC to packaging polymers by major Japanese and western European producers of household

goods, chemicals and construction materials; and a reduced use of PVC compounds in the auto industry in westernEurope.

After their analysis, the managers developed two business scenarios: a so-called "Official Future" and one referredto as "Sunrise-Sunset." The Official Future reflected senior managers' belief that, for at least four or five years, thecompany's business would grow at the same rate as the GNP growth of the United States and Canada (about 2%per year). Some sectors, such as electronics and consumer goods, would continue to grow faster than others. Asiandemand (excluding Japan) -- a small proportion of Acme's total North American production -- would grow as theGNP of Asian countries grew and as Acme achieved greater market penetration. Those trends would continue for 20years, and U.S. government policies would remain favorable to the PVC industry regardless of which political partywas in power. The electronics and consumer-goods businesses and growth in Asian demand would eventually slowdown.

The Sunrise-Sunset scenario anticipated that events in western Europe and Japan would lead to a downturn in the

U.S. and Canadian PVC industry. Concerned about dioxin emissions from the burning of PVC, state governmentswould begin to file law-suits against PVC manufacturers and garbage-incineration companies. Non-PVC polymerproduction would gain in importance. Meanwhile, a new day would dawn for PVC exports to Asia, where anoverwhelming need for buildings, water and sewer lines would increase demand for 20 years despite environmentalissues. The total market would expand and Acme would see its market penetration increase, especially in India,China, Thailand and Indonesia, where Acme might even need to build or acquire plants.

Middle Ground

The ideal process adds a step between business-scenario creation and final decisions: using supply-chain planners'optimization models. (See "Strategic Supply-Chain Planning Using Scenario Planning.") For each of the businessscenarios, supply-chain planners can create multiple detailed model scenarios to run with their supply-chainoptimization models. The result: a supply-chain configuration that minimizes the total fixed and variable, long-termsupply-chain costs for the particular business scenario.

How do these model scenarios of supply-chain planning differ from the more familiar business scenarios of scenarioplanning? Model scenarios feature an array of demand forecasts and tactical production configurations (extra shifts,planned maintenance and the like). The underlying factors are built into optimization models for use with advancedplanning-and-scheduling software. Creating model scenarios is straightforward and involves little creativity ordiscussion. It is similar to a company taking a macro business scenario and creating micro scenarios for businessunits or regions? Only convenience and the time it takes to solve a model scenario constrains how many a companycan have for each business scenario.

Linking each business scenario to multiple model scenarios and uniting the creative work of strategy formulation withthe analytical, optimization-model approach results in a powerful synergy with "right brain" strategizing joined to "leftbrain" planning.(n17)


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Phase One: Scenario Building In Phase One, the strategy team identifies the candidate decisions and theirattendant uncertainties, then outlines business scenarios. The supply-chain team develops or modifies itssupply-chain model on the basis of input from the strategy team regarding possible decisions. The two teams thenvalidate the model. The strategy team garners useful information about the supply chain and updates its notionsabout how long-term supply-chain configurations affect total supply-chain cost. Next, the strategy team fleshes outthe business scenarios using this information and data-on-demand forecasts, plant locations, distribution centersand so on. Finally, the supply-chain team develops multiple model scenarios for each business scenario to runthrough its software.

After developing the Official Future and Sunrise-Sunset scenarios, Acme's strategy team met with the supply-chainteam. The teams agreed that the supply-chain group should make recommendations for both scenarios toreconfigure the supply chain to minimize the cost of manufacturing, distribution, the dosing of old plants and theestablishment of new ones. They identified possible locations for megaplants and determined which of the existingplants could be altered or closed; they also identified 14 product families that, in aggregate, totaled several hundredproducts. Then the supply-chain team, focusing on demand for North American production, developed modelscenarios.

Phase Two: Scenario Planning In Phase Two, the supply-chain team runs the model scenarios and makesscenario-specific recommendations. Then the strategy team modifies its pool of possible decisions, finally choosingone that it then shares with other managers.

Acme's supply-chain team used software from an APS vendor and ran model scenarios requested by the strategyteam. The latter group weighed the resulting recommendations with factors relating to the long-term profitability ofthe business. As a result, Acme decided to spin off part of the vinyl business as a joint venture with a supplier; it alsochose to merge with a non-PVC polymer company.

Phase Three: Scanning the Business Environment In Phase Three, the strategy team identifies leadingindicators (in the case of a company like Acme, it might be housing starts) that enable early detection of whichscenario or combination of scenarios is actually unfolding. When the strategy team has determined which scenario isoccurring, it informs the supply-chain team. With the new information, that group revises the scenarios and runs themodel again to fine-tune its recommendations. The strategy team then revises its decisions and shares them widelyso they can be acted on.

Upsides and Downsides

Acme preserved shareholder interests following the exercise and the merger, its stock price remaining level despitethe plunging prices of other chemical stocks during the same period. Having executives who formulate businessstrategy participate in scenario planning was critical to the final decisions, which undoubtedly would have beendifferent had the company used only supply-chain optimization modeling.

But even without optimization-based planning, scenario planning would have elicited the same decision regardingthe merger. The main benefit of optimization lies in refining the decisions that emerge from scenario planning,including rationalizing the supply chain.

Whenever a company considers a merger, it must evaluate its own assets accurately (in addition to its target's) sothat its shareholders get the best deal. Acme's main assets were plants and long-term customer contracts, andsupply-chain modeling and optimization helped senior managers understand which, in a merger, could be spun off toincrease Acme's value.

Like any other management tool, however, both scenario planning and optimization modeling can have theirdownside. Some managers become seduced by colorful future possibilities in scenario planning when they shouldbe focusing on the trends, underlying factors and uncertainties relevant to genuinely possible decisions. Othersremain aloof, relying first on consultants and later ignoring the scenarios when making decisions. Similarly,development of a strategic supply-chain planning optimization model sometimes serves no practical use, becomingunwieldy or taking too long to complete because of multiple motives.

Still, the joint use of scenario planning and optimization models is the better road to shareholder value -- moreeffective than using either approach in isolation. Strategic supply-chain planning, like Pegasus, is more than the sumof its parts.

Reprint 45114. For ordering information, see page 1.

Copyright Massachusetts Institute of Technology, 2003. All rights reserved.


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Strategic Supply-Chain Planning and the Planning Spectrum

Strategic supply-chain planning falls in the middle of a

decision-making spectrum that has business strategy formulation

at one end and tactical supply-chain planning at the other.

Legend for Chart:

B - Strategy Formulation

C - Strategic Supply-Chain PlanningD - Tactical Supply-Chain Planning

A B

C

D

Scope of The entire nature of the business;

decision reevaluating the business model

making

Whether to

open or close plants and

distribution centers

modify capacity

change product offerings

manufacture in-house

outsource

Determining which plant should

produce what product over the

coming months on the basis of

a demand forecast

Decision Years

horizon

Years

Months or weeks

Flexibility Very high

to act

High

Medium

Possible Frameworks; lower-level analysis that

tools may entail the use of spreadsheets,

presentations, system-dynamics tools

or other simulation tools

Specialized and general-purpose

tools, such as software modeling

languages, available through various

vendors

Advanced planning-and-scheduling

(APS) tools available from various

vendors

Three Approaches to Scenario Planning

The idea of strategic supply-chain planning draws mainly on three


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Phase Two: Scenario Planning

Evaluate policies and strategies

within each scenario to see how they

hold up

Modify the strategies

Iterate and reevaluate as many times

as necessary

In each scenario, determine the

implication of decisions being

considered

Develop and apply quantitative models

(for forecasting and optimizing

decisions when the future is uncertain;

these activities will likely lead

to scenario refinement)

Describe decisions for different

scenarios, combining managerial

judgment with results from previous

step

Phase Three: Scanning the Business Environment

Identify leading indicators and assign

people to monitor changes in the

environment in order to detect in

advance which scenario or combination

of scenarios is unfolding

Select leading indicators and

signposts to detect which scenario

(or combination of scenarios) is

unfolding

(i.) Proponent: Erik Larsen, professor of management and systems,Cass Business School, London.

(ii.) Proponent: Peter Schwartz, chairman, Global Business

Network, Emeryville, California.

(iii.) Proponent: Paul J. H. Schoemaker, CEO, Decision Strategies

International Inc., West Conshohocken, Pennsylvania, and research

director, Mack Center for Technological Innovation, The Wharton

School.

Strategic Supply-Chain Planning Using Scenario Planning

The senior team, which uses brainstorming and other

hard-to-measure approaches to formulate strategies that increase

shareholder value, combines its strengths with those of

supply-chain planners, who rely on optimization software to

reduce supply-chain costs.

Legend for Chart:

A - Strategy Team (senior managers)

B - Supply-Chain Planning Team (planners)

A

B

Phase One: Scenario Building


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Identify issues, key driving forces and important

factors for uncertainty

Sketch out business scenarios

Flesh out business scenarios

Develop or modify optimization model for the

supply chain (including any target acquisitions and

locations for new plants or distribution centers)

Validate model with strategy team Phase Two

scenario planning

Phase Two: Scenario Planning

Evaluate possible decisions (policies and strategies)

against each scenario to see how they hold up in each case,

using the scenario-specific recommendations of the

supply-chain team as a benchmark

Modify possible decisions

Iterate and reevaluate as many times as necessary

For each business scenario, create model scenariosand run optimization model with each model scenario

Determine best decision for the business scenario,

taking into account recommendations of the optimization

model for each model scenario

Present this business-specific choice to senior

management along with the team's rationale for

recommending it

If the strategy team has provided its list of

possible decisions, compare each of them against the

scenario-specific recommendations as well

Phase Three: Scanning the Business Environment

Identify leading indicators and charge people with

monitoring changes in the business environment for early

detection of which scenario or combination of scenarios is

unfolding

Refine model scenarios to reflect the reality

of the unfolding scenario and determine the best decision

recommended by the optimization model

Present recommendations to the strategy team

REFERENCES

(n1.) Suppliers of APS technologies include SAP, i2 Technologies, Manugistics and Logility.

(n2.) R.L. Breitman and J.M. Lucas, "PLANETS: A Modeling System for Business Planning," Interfaces 17 (January-February1987): 94-106.

(n3.) Optimization models can be built into spreadsheets by using the Solver feature within Excel, for instance, or by usingadd-on software, but these models are not comprehensive enough to take into account the scope and detail needed for aglobal supply-chain model. For such optimization, the cost of APS software, including implementation, may exceed $1 million.

(n4.) A.M. Geoffrion and R.F. Powers, "Twenty Years of Strategic Distribution System Design: An Evolutionary Perspective,"Interfaces 25 (September-October 1995): 105-127.

(n5.) M.A.. Cohen and H.L. Lee, "Strategic Analysis of Integrated Production-Distribution Systems: Models and Methods,"


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Operations Research 36, no. 2 (1988): 216-228; and M. Cohen and H. Lee, "Resource Deployment Analysis of GlobalManufacturing and Distribution Networks," Journal of Manufacturing and Operations Management 2, no. 2 (1989): 81-104.

(n6.) R. Breitman and J. Lucas, "PLANETS: A Modeling System for Business Planning," Interfaces 17 (January-February1987): 94-106.

(n7.) B. Arntzen, G. Brown, T. P. Harrison and L. Trafton, "Global Supply-Chain Management at Digital EquipmentCorporation," Interfaces 25 (January 1995): 69-93.

(n8.) A. Macdonald and D. Beavis, "Seize the Moment -- Radical Supply Chain Integration as a Means of IncreasingShareholder Value and Enabling Acquisitions To Deliver on Their Promises," Manufacturing Engineer 80, no. 4 (2001):175-178; C. Farrell and R. Melcher, "The Lofty Price of Getting Hitched," Business Week, Dec. 7, 1997; and D. Henry,"Mergers: Why Most Big Deals Don't Pay Off," Business Week, Oct. 14, 2002, 72-78.

(n9.) B. Arntzen, G. Brown, T.P. Harrison and L. Trafton, "Global Supply-Chain Management at Digital EquipmentCorporation," Interfaces 25 (January 1995): 69-93; J. Muller, "Compaq Will Buy Digital in a Record $9.6b Deal," Boston Globe,Jan. 27, 1998, p. A1; and "Compaq To Acquire Digital for $9.6 Billion," Compaq press release, Jan. 26, 1998, New York,http://h18020.www1.hp.com/newsroom/pr/1998/pr260198c.html.

(n10.) D.J. Frayer and R.M. Monczka, "Enhanced Strategic Competitiveness Through Global Supply Chain Management,"Annual Conference Proceedings of the Council of Logistics Management (Oak Brook, Illinois: Council of LogisticsManagement, October 1997): 433-441.

(n11.) J. Greenbaum, "SCM Is Dead, Long Live SCM," July 16, 2002,http://itmanagement.earthweb.com/columns/entad/article.php/1407831.

(n12.) A.P. de Geus, "The Living Company" (Harvard Business School Press: Boston, 1997), 69.

(n13.) H. Mintzberg, "The Rise and Fall of Strategic Planning" (New York: Free Press, 1994).

(n14.) See M. Porter, "Competitive Advantage: Creating and Sustaining Superior Performance" (Free Press: New York, 1985);B. Melzer, "The Uncertainty Principle," CIO Insight, June 1, 2001, www.cioinsight.com; and H. Kahn, "Thinking About theUnthinkable" (New York: Horizon Press, 1962).

(n15.) E. Larsen, "What Is Scenario Planning?" teaching note, Cass Business School, London, 2000; P. Schwarz, "The Art ofthe Long View: Paths to Strategic Insight for Yourself and Your Company" (New York: Doubleday, 1991); P.J.H. Schoemaker,"Multiple Scenario Development: Its Conceptual and Behavioral Foundation," Strategic Management Journal 14 (March 1993):193-213; and P.J.H. Schoemaker, "Scenario Planning: A Tool for Strategic Thinking," Sloan Management Review 36 (winter1995): 25-40.

(n16.) T.F. Mandel and I. Wilson, "How Companies Use Scenarios: Practices and Prescriptions," SRI International, Menlo

Park, California, report no. 822, spring 1993.

(n17.) H. Mintzberg, "Planning on the Left Side and Managing on the Right," Harvard Business Review 54 (July-August 1976):49-59. Also published as H. Mintzberg, "Planning on the Left Side, Managing on the Right," in "Mintzberg on Management:Inside Our Strange World of Organizations" (New York, Free Press, 1989), pp. 43-55.

~~~~~~~~

By ManMohan S. Sodhi

ManMohan S. Sodhi is an associate professor of supply-chain management at Cass Business School in London.Contact him at [email protected].

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