In my previous post, I talked about the supply chain management journey and the obstacles and opportunities it brings. I also promised I’d tell you what excellence looks like, and what (and whom) it will take to get your supply chain process to that point.
For starters, Gartner has identified five levels of supply chain maturity: React, Anticipate, Integrate, Collaborate, and Orchestrate. But Gartner notes that 67% of companies are stuck in the early stages of those steps to maturity.
If you’re striving for supply chain excellence, think of your efforts as a journey toward supply chain maturity. And keep in mind that the journey no longer ends with sales and operations planning (S&OP). Although S&OP is still a worthy goal, there’s a newer concept that takes S&OP one step closer to supply chain maturity: integrated business planning (IBP).
A Closer Look at IBP
I’ve written blogs about what IBP is, how IBP is different from S&OP, and how to rise beyond S&OP to reach IBP in your business. To sum up: IBP is an emerging strategy in which companies involve the extended supply chain in every business decision, bringing external input and visibility into what has traditionally been an internal process. Through IBP:
1. Information is broken out of silos.
2. The intelligence and insights of dozens or more collaborators benefit the planning process.
3. Multiple departments weigh in for pricing and product decisions.
4. Supply chain partners can react more quickly to your needs and, likewise, balance their supply chains appropriately.
Succeeding with IBP
To achieve IBP, you must take the idea beyond a mindset and into actual collaboration and orchestration. New social technologies are making that task easier than ever and enabling the SocialTM Supply Chain. These aren’t the social media playgrounds you might be thinking of – places to share vacation videos and pictures of your grandkids. These are business tools that offer that same ease of use but help you and your team get your jobs done as efficiently as possible.
A key part of this is social forecasting. General Electric uses social forecasting to generate two to six new patents per business unit. And Henkel used it to achieve a 22% increase in accuracy.
A few years ago, Oliver Wight surveyed clients that had achieved Class A performance in their S&OP processes. The clients quantified their accomplishments, including:
- Increased forecast accuracy by 18-25%
- Reduced inventory by 18-46%
- Increased sales revenue by 10-25%
You can achieve results like these with IBP, too – and we have a white paper that can help. Download “Achieving Supply Chain Excellence: Your Journey Forward” today, and get started on your journey to IBP success.