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Is the Budget Process an Improvement Enabler or Obstacle?

Performance Improvement - Can the budget process deliver? Many organisations use the budget process to drive a continuous improvement challenge. Senior Managers spend hours working out how to shave a few percent off existing operational processes and resources. Whilst the budget process is a valuable exercise, at Slater Austin, we argue that re-designing what you have inevitably delivers better results. Looking at what you have through a different lens is quite eye-opening.

"Senior managers sigh when budget time comes around"

It is rare that Supply Chains happen by chance. Usually, they are the creation of well-versed operational processes, constantly balancing the equation between quality of materials, process cost and service to customer. Day on day, week on week, month on month senior managers spend hours pouring over what happened since the last review and making immediate action plans. The greatest senior managers thrive in this environment, constantly getting the best from their teams. But they draw a heavy sigh when the budget process comes around again, for it is a further internal challenge to be better than they were last year. Good never seems to be enough! We see the same issues time and time again with the budget process

The issue with the budget process is that it replicates the current reality, generally with a few changes to the sales line and some changes to the expenditure line due to legal changes, inflationary pressures and other influences on market conditions. Supply Chain teams readily offer efficiency and productivity improvements, sometimes under pressure from above and regularly without a concrete plan. So often, these efficiencies are promised at the start of the year, but delivery lags in both time and substance. Such a deflationary position can, at its worst, severely affect company morale and exacerbate the performance gap. Supply Chain Innovation holds the Key to a Step-Change Improvement

Realising a step-change in performance means looking at your Supply Chain from different perspectives and enabling a shift. This may be through technology, making an in-house / outsourced change, process redesign, creating new partnerships, changing logistics networks, deploying working capital differently...

Look beyond today “If you want something new, you have to stop doing something old.” Peter Ferdinand Drucker

Peter F Drucker, the famous business author and management consultant sums up the challenge very succinctly in his quote: "If you want something new, you have to stop doing something old." By its repetitive nature, the budget process is that something old. Although it has a place, you need to create the time to try something new. This is innovation. At Slater Austin, we offer this view of the Supply Chain to help businesses make a step-change in performance. As your Supply Chain is unique to you, there is no magic formula to apply to all businesses. The improvement programs we deliver are therefore unique to your organisation. If you want tomorrow to be different to today, contact Slater Austin for a free Supply Chain Review.


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