The loop
What keeps the plan honest.
A plan is a claim about the future. The loop is how a business finds out where the claim was wrong, early enough to do something, and without turning the finding into an argument.
The loop covers three of the fourteen capabilities: Operations Collaboration, Risk Management and Performance Management. Together they keep planning and execution working from one plan, identify exposure before it is realised, and measure the things that change behaviour rather than the things that are easy to count.
Definition
Why the loop is a capability and not a report
Every planning function measures something. Far fewer have a defined route by which a measurement changes a decision, and that route is what the loop actually is: exceptions raised where the work happens, routed to whoever can resolve them, and fed back into the assumptions that produced the plan.
Without it a business accumulates measures without accumulating learning. The gap between plan and actual is reported every month, explained every month, and never reaches the buffer policy, the lead time assumption or the sequencing rule that produced it.
Capabilities on this page
- 01Operations Collaboration
- 02Risk Management
- 03Performance Management
What breaks
What breaks without it
The failures here are quiet, which is what makes them expensive.
Metrics measure people before they measure the system
A measure introduced as a performance target stops being a source of information almost immediately.
Measures are worth far more as learning measures first: understood, argued with and corrected while nobody is being judged on them. A metric that arrives with consequences attached gets managed rather than read, and the business loses the signal at exactly the point it starts paying attention.
Exceptions route by escalation
A problem travels upward until it meets someone with the authority to act, rather than sideways to whoever can resolve it.
Escalation is a slow and expensive routing algorithm, and it teaches the organisation that volume is how things get fixed. Planning and execution working from one plan is what makes lateral routing possible in the first place.
Risk is reviewed after it is realised
Supply, demand and capacity exposure is well understood in hindsight and rarely defined in advance.
Contingency defined before it is needed is a different activity from contingency improvised while it is needed, and the second one is what most businesses have. The difference shows up not in whether the disruption happens, but in how many decisions have to be made at once when it does.
What changes
What changes when it works
A small number of measures that somebody acts on.
- 01Exceptions routed to whoever can resolve them
- 02Planning and execution working from one plan
- 03Measures introduced as learning before performance
- 04Exposure identified and monitored, not discovered
- 05Contingency defined before it is needed
- 06Plan versus actual read back into the assumptions
The engagement
How an engagement touches it
The loop is usually the last thing built and the first thing that proves whether the rest worked, so the assessment treats it as evidence rather than as a workstream: what the business already measures, what it does with the measurement, and how the last significant disruption was actually handled.
Digital enablement belongs here rather than earlier. Dashboards and exception queues are instrumentation for a process that now exists, and the number of measures governance actually acts on is almost always smaller than the number currently reported.
Which capability is load-bearing decides the sequencing, and that question comes before this one. The full argument is set out in why a better forecast does not move service levels. The people who would do the work are on the practitioners page.
Questions
Questions we get about Performance and Risk
Which planning metrics actually matter?
The ones somebody acts on. In practice a planning function needs a measure of the demand signal, a measure of whether commitments were kept, a measure of what cover it took to keep them, and a measure of how much of the plan was changed after it was published. A longer list usually means fewer of them are being read.
Why do our KPIs not change any behaviour?
Often because they arrived as targets rather than as measures. A metric introduced with consequences attached gets managed rather than read, and the business loses the information at the moment it starts caring about the number. Treating measures as learning measures first, before they become performance measures, is usually the difference.
Is this the same as supply chain visibility?
No. Visibility is being able to see what is happening. The loop is the defined route by which seeing it changes a decision and then changes the assumption that produced the plan. Visibility without that route produces a business that can describe its problems in more detail than before.
The rest of the map
The other three
- Demand PlanningDemand planning is where a business decides what it expects to sell. Done well, everything downstream has something firm to stand on. Done as a monthly argument, everything downstream inherits the argument.
- Supply and Inventory PlanningThe supply side is where a demand number becomes a commitment. It is also where the difference between a plan and an aspiration stops being a matter of opinion and starts being a matter of cost.
- S&OP and IBPMost businesses have a monthly planning meeting. Fewer have a monthly planning decision. The difference between the two is the whole of S&OP.
All fourteen capabilities, grouped, are on the services map.
Get Started
Where is your planning organisation today?
Every engagement starts with an honest assessment of current maturity. Let's find out where you are, and what the next capability should be.