Breaking free from operational firefighting – but how?

Many companies, from SMEs (small and medium enterprises) to large industrial enterprises, are all too familiar with this scenario: demand fluctuations and production bottlenecks create disruptions in the supply chain. In response, management steps in to make day-to-day operational decisions, ensuring that customers still receive their orders and that goods are “somehow delivered”.

This high focus on immediate operational issues means there’s little time left for strategic planning or proactive capacity management according to customer needs. Companies end up in a reactive mode, lacking forward visibility and failing to prevent avoidable disruptions that further affect daily operations.

This marks the beginning of the vicious cycle of “firefighting”: the more time spent solving operational problems, the less time remains for proactive solutions—leading to even more operational issues down the line.

Developing a proactive resource management approach is the quickest and most effective way to break this cycle and transform the company’s planning culture. This means establishing structured routines that allow companies to identify potential problems early, simulate different planning scenarios, and make the best mitigation decisions in advance.

Rocket science? Hardly.
Difficult to implement? With the right approach, companies can quickly stabilize operational planning, streamline execution, and build trust between departments.

Step one: start small with operational capacity management
The first challenge is to gradually shift focus from immediate operational concerns to forward-looking planning.

It is recommended to start with a pilot phase, focusing on managing capacity in high-risk bottleneck areas to achieve maximum impact with minimal effort and IT requirements. This quickly brings more stability to the supply chain and frees up resources from the firefighting.
The results from the pilot help to secure company-wide buy-in, and to initiate a cultural shift from reactive to proactive decision-making. Employees begin reassessing their current responsibilities and take an active role in refining planning processes.
We’ve supported companies through this transition, achieving productivity increases (overall equipment effectiveness (OEE)) of 10–15% and OTIF (share of on-time in-full deliveries) improvements of 5–10%.

Following a successful pilot, the next step is to transition to process-driven operations. Companies expand planning focus, integrate additional resources into operational capacity planning, and develop long-term IT solutions.

While operational capacity management is extended for all resources and locations, the next step starts in parallel.

Step two: expand the planning horizon with Sales & Operations Planning (S&OP)
As companies establish forward-looking visibility through operational capacity management, new challenges emerge that require a broader planning approach:

• What is the outlook on mid-term capacity utilization?
• How occupied are production lines and warehouses? Are supplier capacity constraints approaching? Is an expansion or reduction of available capacity necessary?
• What is the optimal maintenance plan?
• How can demand be distributed across production sites in the most cost-effective way?
• What are the workforce requirements for this year? And for the next?
• How should capacity be aligned for a new product launch?

S&OP provides the framework to answer these questions and foster a unified perspective across the company. It is an additional process layer that complements, rather than replaces, operational capacity management.

A well-functioning S&OP process enhances supply chain transparency and trust – both internally and externally. It helps break down silos and promote cross-functional collaboration in order to identify the best solutions from an overall business perspective.

“The goal is to identify problems before they arise. This requires new processes, different roles in the organizational structure, and a cultural shift.”
Andreas Tengler, Partner at TenglerConsulting

The companies we’ve supported not only gained transparency and shifted to process organization but also improved OTIF by an additional 10–20%, reduced inventory by up to 20%, and increased profitability (earnings before interest and taxes) by 5%.
Read more about how we implemented steps one and two for an SME here.

Once operational capacity management is combined with an S&OP process, the next step is integrating additional stakeholders to strengthen supply chain resilience and efficiency.
Find out more in our article: Achieve seamless supply chain integration with “One Plan”.

Escaping firefighting and reclaiming control is a serious challenge – especially for decision-makers in SMEs, where it may seem overwhelming. We understand these situations well and have successfully guided many companies through them.

With our extensive project experience, we tailor our approach to each company’s unique challenges, ensuring both fast results and sustainable implementation.

Learn more about supply chain planning here and in our insights section.