The Profitability Gap
The unmeasured differencebetween two plans that both ship.
Every planning system in this industry checks whether a plan can be executed. Almost none measure what it earns — and on the operations we have modelled, two plans that both ship differ by several percent of contribution.
The argument
We ask whether it ships. We never ask what it earns.
Sit in a plan review meeting anywhere in this industry and the questions are the same. Will this order go on time. Why is that one late. Who is responsible.
Nobody asks what the plan will earn. Not because the question is unimportant, but because no system in the room can answer it.
Take any month and rebuild it a different way — a different style on a different line, a different sequence, a different call on overtime. Both versions hit every delivery date. On the review screen they look identical. They do not earn the same money.
On the operations we have modelled, that difference runs to several percent of contribution. For a mid-sized group it is a seven-figure number, from the same people, the same lines and the same order book.
Buyers were right to demand on-time. The mistake was stopping there.
Where it comes from
Four ordinary decisions, made a hundred times a month.
The gap is not created by one bad choice. It accumulates through routine decisions that no report ever prices.
- Which line runs which style
- Line capability, learning curve and run length interact. A short order placed on a line that never reaches plateau spends its whole life on the ramp — and the line, not the plan, gets blamed at month end.
- Whether a line sat idle
- Three days waiting for the next order is attended capacity that produced nothing. It rarely appears as a cost anywhere, because nothing went wrong.
- Whether overtime was necessary
- Overtime taken because it converts a late order to on-time is an investment. Overtime taken because it felt safer is a premium paid for information the planner did not have.
- How the plan was divided
- Above a certain scale the plan is split across units, and each unit optimises locally. Overtime runs in one unit while lines stand idle in another. Nobody is wrong; nobody can see both at once.
Proof
In production, on real floors.
Eight
apparel manufacturers running ProactivePlan
Multi-site
groups planning across factories on one board
Suborder
granularity, end to end
A full customer study, with named outcomes, publishes when our reference customer has approved it.
Put a number on it.
The calculator estimates the gap from your own line count, efficiency, utilisation and overtime, and shows the arithmetic behind every component — so you can argue with it rather than take it on trust.