From S&OP to Integrated Business Planning

If we want to drive change in the supply chain planning realm, we’ll often need to shake things up and push our colleagues beyond their comfort zones. Before we embark on a shake-up, though, it’s best to know exactly what integrated business planning (IBP) is and how it differs from sales and operations planning (S&OP).

Once you’ve decided IBP can help your company maintain profitable growth, how do you get there? The specifics, of course, will depend on where you are right now with your S&OP processes, what financial and human resources you have available, and how you envision your organization using IBP.

But in any case, transitioning to integrated business planning will require bold, resolute leadership — especially if you work for a billion-dollar company that still runs on spreadsheets.

Stakeholders who have developed, nurtured, and carefully guarded their favorite spreadsheets for years aren’t going to give them up easily for what they might view as some newfangled piece of software. But they’re going to have to if they want your company to move forward. Expect blowback, and resolve to work through it. Surround yourself with allies who have the patience and diplomacy to champion new ways of doing business and answer tough questions from skeptics along the way.

As you work, you may find it helpful to focus on these four stages of IBP implementation as laid out by George Palmatier and Colleen Crum in an Oliver Wight white paper:

1. Improved communications. If you have information living in silos, “forecasts” being generated in spreadsheets, and critical decisions being made over email, then job number one is to move these processes onto collaboration platforms that all stakeholders can easily use. Consider implementing social tools that allow your teams — inside and outside the organization — to communicate in real time from any device. Palmatier and Crum note that at this stage of IBP, your data may not yet be complete or trustworthy. But at least you’re in a better position to discuss issues.

2. Problem solving. Now that your stakeholders have access to the information they need, they can more clearly identify your most urgent business challenges and address them more quickly than before. At this phase, you’re bailing water out of your rowboat and plugging holes.

3. Problem prevention. If I may extend that metaphor a bit, here’s where you make a plan to water-seal the hull of your rowboat every few months to prevent further leaks. As Palmatier and Crum put it: “The management team begins focusing further out in the planning horizon. Anticipated problems are identified; decisions are made to preclude the problems from occurring.”

4. Strategic and tactical decision-making. Now that you’ve addressed and prevented your company’s short-term problems, you can focus on reaching high-level objectives. This is where your entire supply chain begins to work together to take advantage of business opportunities that benefit the bottom line of all stakeholders.

Again, I realize that these stages of IBP implementation will look different depending on where your company is starting from and where you’re trying to go — but I think they offer an excellent template for making your journey to integrated business planning.

We at Demand Solutions have helped many companies transition from siloed processes to collaboration — and even to IBP. Are you looking for help getting started on your business transformation? Drop us a line today. Do you want to read more about the journey to integrated business planning? Download this free white paper: Achieving Supply Chain Excellence.

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Bill Harrison, President of Demand Management, Inc., began his career in supply chain operations over 25 years ago on the loading dock of a True Value warehouse. He spent over 17 years with True Value Company, where he held a number of management positions, and personally designed and implemented a market-leading Replenishment Optimization System. He also has served as COO of Atrion/ClearCross, and held leadership positions at Manugistics and American Software before joining DMI in 2006.


 

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