Holiday Season Exposes Gaps in Corporate Planning, Not Demand
Companies treat the holiday season as an unpredictable crisis, but the real failure is a lack of management discipline that should operate year-round, according to planning expert Andrea Montecchi.
The holiday season arrives on the same schedule every year, yet many manufacturers and retailers still scramble through the fourth quarter as if demand were a complete surprise. By the time the third quarter closes, demand plans get another look, inventory and supplier commitments face fresh scrutiny, and meetings multiply as leaders search for extraordinary measures to deliver year-end results. According to Andrea Montecchi, chairman of Oliver Wight Americas, that reaction comes too late and addresses the wrong problem.
Montecchi argues that companies are not actually failing to predict holiday demand. They are failing to build the management capabilities needed to handle uncertainty at any time of year. Expediting a shipment or repositioning inventory can still happen in the fall, but the underlying ability to make timely decisions under pressure cannot be installed in a few weeks. The holiday crunch simply exposes weaknesses that exist during every other season.
At the center of the problem is a common confusion between a forecast and a demand plan. A forecast is a prediction, an informed estimate of what future demand might be, much like a weather report. A demand plan goes further. It converts that expectation into an intentional business commitment: what the company intends to sell, the assumptions supporting that expectation, and the resources and actions required to deliver it. A forecast describes what might happen. A demand plan establishes what the business will do about it.
Good planning does not assume the plan will be correct. Consumer behavior shifts, competitors act, promotions surprise, suppliers miss commitments, and economic conditions change. What separates prepared companies is that they make the assumptions behind their plans explicit. Once those assumptions are visible, management can determine whether they are still true and what decision is required if they are not. That is preparedness, not prediction.
Scenario planning adds value only when it is tied to decisions. If demand materially exceeds the plan, what will the company do? If it falls short, when does replenishment change? If capacity becomes constrained, which products, customers, or channels take priority? Not every possibility needs a predetermined answer, but consequential uncertainties should not arrive in the executive meeting for the first time after they have already become consequential. A scenario without an associated decision is simply an interesting possibility.
The same discipline applies to inventory. The instinct during the holidays is to protect availability at all costs, but inventory does not insure against uncertainty. It is capital placed at risk. Carrying more inventory may be the right decision, but so may accepting a greater risk of stockout to protect cash or margin. The business must intentionally decide where it is willing to place risk and why.
Technology alone does not solve the problem. Sophisticated planning systems and vast amounts of data can bring issues to light sooner, but people still make the decisions. Seeing a problem earlier is not the same as responding earlier. When decision rights are unclear, teams may pursue conflicting objectives, and routine exceptions can require executive escalation. In those cases, better visibility does not fix the underlying issue; it simply allows the organization to watch the problem unfold in greater detail.
Decision-makers need a common plan, clarity about its assumptions, appropriate authority, and enough latitude to act when circumstances materially change. Montecchi suggests treating the holiday season as an annual stress test of how well the business is managed every other season. Demand volatility, inventory exposure, supplier constraints, and compressed decision windows may be more pronounced during the holidays, but they are not unique to that period. The season merely compresses normal business uncertainty into a shorter, higher-stakes window.
If navigating the fourth quarter suddenly requires special meetings, new dashboards, emergency supplier coordination, extraordinary planning exercises, and constant executive intervention, that may be a sign the normal management system needs fixing. The holiday season may warrant greater attention, but it should not require different management capabilities. As the third quarter closes, Montecchi advises companies to challenge the demand plan, its assumptions, and where they have chosen to place risk, then make the adjustments that still matter. The best-prepared companies are already accustomed to planning amid uncertainty, recognizing material change, making effective decisions, and acting in time to affect the outcome. The holidays are predictable. The outcomes are not. Managing that uncertainty should not be seasonal.
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