The 7 Steps for Integrated Business Planning success the right approach for lasting value

Transcription

1 The 7 Steps for Integrated Business Planning success the right approach for lasting value

2 Agenda Conclusions & Tips IBP survey results The 7 Steps model What is IBP anyway?

3 What is Integrated Business Planning anyway?

4 How well do companies manage IBP? Source: Gartner With a success rate of less than 40% in delivering IBP benefits, there are issues with the IBP process.

5 The 7 Steps in brief A model to support IBP implementation

6 Step 1 Top Down Sponsorship An executive sponsor who Makes IBP a strategic priority Actively secures the commitment for change

7 Step 2 Right Organisation IBP practitioner who can influence across the business And a cross-functional project team IBP

8 Step 3: Start with simple processes, KPIs & tools x Consider deployment in phases Start with a few brands and reports What are the crucial reports? Limit effort for participants

9 Step 4: Engage and educate Commonly held beliefs before engagement

10 Step 5: Cross-functional Collaboration Actions & behaviours for collaborative excellence: Clearly define who does what and when Common KPIs Value teamwork and challenging debate NOT CONSENSUS FOR CONSENSUS SAKE!

11 Step 6: Learn by doing Manage expectations Seek & act on participants feedback Continue to engage & educate

12 Step 7: Improve & extend NSV Sales FC One Number Spreadsheets Basic Reports P&L Trade Spend Mgt Scenarios Software Dashboards

13 IBP Survey Results

14 IBP 5 Stage Maturity Model Stage 1: React Stage 2: Anticipate Stage 3: Integrate Stage 4: Collaborate Stage 5: Orchestrate Outcome Independent management of supply shortages and revenue. Integrating a volume-based supply plan, using sales forecast & constrained capacity. Balancing supply & demand volume across the end-to-end supply chain, connecting this to net sales value and key supply chain levers. Creating a demand-driven, profitable business plan which integrates sales, finance and supply objectives. Co-ordinated profit and cash decision making and risk management across the enterprise and supply network to create value across the full horizon. Process Focus S reflects sales, and OP reflects local supply capabilities. S reflects sales and some marketing plans, and OP reflects supply plans. S reflects sales and marketing plans, with input from the supply chain group, and OP reflects the integrated supply chain capabilities across plan, source, make and deliver. First stage IBP (Integrated Business Planning): I includes external insights, BP reflects extended supply chain capabilities and profit-based decision making. Full IBP: I adds customer and supplier plans aimed at creating new value. BP reflects enhanced trade off management across the enterprise. Organisation & Culture The S&OP process is led by supply chain and lacks sponsorship from business executives. Inconsistent approach to sales forecasting. The S&OP process separated from other business forums. Co-ordinated, owned and sponsored by supply chain. Emerging partnership between sales and supply chain for demand plans. The S&OP process is embedded within the business meeting structure. Still owned and sponsored by supply chain. Sales and supply chain collaborating to build demand plans. Improving involvement from marketing and finance. IBP process is co-ordinated by a non-partisan supply chain lead and owned and sponsored by business unit or P&L owners. All functions are committed and bought in to the One Number principle. IBP is co-managed by supply chain and finance, owned by P&L leaders and sponsored by board level executives. All functions actively participate in improving business decisionmaking and risk management. Metrics Business unit metrics are generated from varied sources and reviewed within functions only. The metrics are functionspecific and often competing. The metrics are focused on integrated supply chain performance and net sales. Metrics are aligned to business goals and extend across functions. Root cause analysis and exception reporting in place. Metrics are value-based and balanced across the enterprise to manage trade offs and drive continuous process improvement. Time Horizon S&OP focus is on firefighting to resolve current operational imbalances in supply and demand. S&OP is mostly short term and operationally focussed (e.g. 0-6 months) S&OP seeks to expand its focus to the mid-term planning horizon, typically to the end of the fiscal year with mixed results. IBP process covers 0 to 12/18/24 months, depending on the industry. Integrated with the annual budget planning process. IBP manages the short, medium and long term trade offs in the 0 5 year time horizon. Technology Extensive, but inconsistent used of spreadsheets and in-house systems to support S&OP and disparate transactional systems. Transactional systems become the primary source of data for the S&OP process, with local solutions to support supply and demand planning. Sales plans are integrated with supply chain planning solutions to support the balancing supply and demand across the end-t0- end supply chain. Master data is in control. Reliance on an integrated IT architecture connecting sales, finance and operations planning and reporting. Technology enables external data integration, scenariomodelling for trade off management. Dashboard reporting supports rapid decision-making. Input source: Gartner. Adapted by: Sue Austin Consulting.

15 Conclusions & tips Do Don t Ensure leadership sponsorship Bring in S&OP expertise Foster cross-functional collaboration Assume S&OP understanding Blame the process or tools Over-complicate Top down Sponsorship Right Organisation Simple Process & KPIs Engage & Educate X-functional Collaboration Learn by Doing Improve & Extend

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17 IBP Journey

18 Getting S&OP working 2013 UK Management team as steering committee Prior S&OP experience Cross-functional project team Business-wide engagement - strong focus on sales training S&OP Meetings sacrosanct Fast start first cycle 2 months after project kick off Scope: Sales forecasting, inventory planning, basic reporting

19 From S&OP to IBP Corporate HQ involvement for investment approval Cross-functional systems project team Business-wide engagement easier 2nd time around Business-wide meetings structure re-design Longer timeline due to systems design & implementation Scope: + Full P&L planning, Trade Spend Mgt, Full Reporting, Scenarios