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Integrated Business
Planning
Best PracticesPresented by
Catherine Schmitt-Weber
&
Les Brookes
Oliver Wight EAME
Our Organisation Has Been a Thought Leader Delivering
Business Transformation for 40+ Years
Global firm founded in 1969 by Oliver Wight
Team of experienced practitioners with Class
A credentials
Originators of S&OP and pioneers of Demand
Planning, Maturity Journey, and Integrated
Business Planning
Cross-industry, complex implementation
experience
Business Transformation Delivered - Proven
methods and best practices
Associated with Major Technology Partners
© Oliver Wight
International
2
© Oliver Wight International 2010
Benefit driven: Time to results
Experience transfer: Ownership and independence
Positioning Statement
Oliver Wight are leading business
improvement specialists
who educate, coach and mentor people
to lead and sustain change
on the journey to business excellence and
outstanding business performance
Key Components of Integration
© Oliver Wight International OWI 0003 - 064
PEOPLE &
BEHAVIOURS
TECHNOLOGIESPROCESSES
The Evolution of S&OP driven by Oliver Wight
– Where are you now?
© Oliver Wight
International
5
Operations
Planning
70s
Sales &
Operations
Planning
early
80s
Balancing
Supply &
Demand
and
Inventory
Control
mid
80s
Financial
Integration
for all
financial
projections
late
80s
Product and
Portfolio
Management
Integration
late
90s
Scenario
Planning
and
Strategic
Deployment
2000s
Collaborative
Integrated
Business
Planning
2010s
24 - 36
month Horizon
Common Set of
Assumptions
MANAGEMENT
BUSINESS
REVIEW
The Oliver Wight Business Model
Supply Point
Management
Supplier
Management
SUPPLYREVIEW
Supply Chain
Management
Procurement Management
Market
Management
Demand
Management
Sales
Management
DEMANDREVIEW
Portfolio
Management
Project
Management
Resource
Management
PRODUCT MANAGEMENT
REVIEW
STRATEGYBUSINESSPLANPERFORMANCE
© Oliver Wight
International
6
One Set
of NumbersTruth As
We Know It
Integrating Business Planning is:
© Oliver Wight International 1005 - 017
A process, led by senior management that, on a monthly basis,
evaluates and revises, time-phased projections for demand,
supply, product management, strategic projects and the
resulting financial plans
Typically a rolling 24 month horizon
A decision-making process that realigns the tactical &
operational plans for all business functions within an
accountable business entity, in support of the business goals
and targets
Driving consensus on a single operating plan, to which
executives hold themselves accountable
Allocates the critical resources - people, equipment, inventory,
materials, time and money - to most effectively satisfy
customers in a profitable way
The Rolling Business Management Process
Integrated Business Planning
© Oliver Wight International OWI 0005 - 06a8
DemandReview
Product Management
Review
SupplyReview
Management
Business
Review
Attendees:
Technical / Design / Development
Marketing & Brand Management
Procurement/Purchasing
Supply Chain Planning
Programme / Project Mgmt.
Finance
Chair: Product Management Director
Facilitator: Product Planning Manager
The Review CyclePerformance?... Realistic Plan?...Enough?...Gaps & Actions?
© Oliver Wight International 1010 - 029
Attendees:
Marketing by accountability
Sales by accountability
(e.g. Key Account Managers)
Finance
Chair: Sales & Marketing Director
Facilitator: Demand Manager
Attendees:
Operations managers
Distribution and logistics
Procurement
Facilities management
Finance
Chair: Supply Chain Director
Facilitator: Supply Chain Planning
Manager
Reconciliation Review to Management Business Review
© Oliver Wight International 1016 - 0210
Management
Business Review
Chair: Business Leader (MD/CE)
Facilitator: IBP Process Leader
Attendees:
Leadership / Management Team
Agenda
Performance review
Business trends
Major changes
Key issues by Segment
Latest view to Business Plan &
Strategy
Plans agreed
Input to next cycle
Outputs
Focus for MBR:
Latest view
Vulnerabilities &
Opportunities
Issues & resolution
Proposed plan
Gaps & gap closing
Decisions required
Reconciliation Review
Chair and Facilitator:
IBP Process Leader
Attendees:
Reconciliation Team:
Key players from the Business
including Finance
Agenda
Issues arising
Major changes & impact
Latest financial view
Vulnerabilities & Opportunities
Gap closing scenarios
Recommendations & focus for MBR
Bottom
Up
Process24 Month Horizon
Making the Gap VisibleTop Down ↔ Bottom Up
© Oliver Wight International 1015 - 01a11
Strategy 5 Year Horizon
Business Plan 3 Years
Top
Down Process
Matrix Adds Complexity
© Oliver Wight International 102112
GLOBAL
CORPORATE
BOSTON
JAPAN
CHINA
INDIA
AUSTRALIA
MEXICO
BRAZIL
CANADA
USA
GEORGIA
USA
MINNEAPOLIS
UK
GERMANY
SOUTH
AFRICA
TURKEY
USA CANADA
REGION
LATIN
AMERICA
EUROPE
AFRICA
MIDDLE-EAST
REGION
ASIA-PACIFIC
REGION
Typical PoorCharacteristic Typical Good
Integrated Business Planning ProcessGood vs. Poor Characteristics
© Oliver Wight International 1020-0113
Frequency Monthly Weekly / Quarterly
Horizon 24 month + rolling 3 to 12 month or shrinking
Time Focus Months 4 plus Next few months
Business Focus Value Chain Functional planning
Language Segments SKU & detail
Ownership Executive & Middle Management Middle Management
Outcome Gap Closing Plans Production output
Decisions Tactical and strategic Tactical & short term
ProcessIntegrate the Business Plan and
deploy StrategyMeeting to review numbers
Optimization Scenario Modelling A plan
Integrated Business Planning – Maturity
© Oliver Wight
International
1083 - 0514
Knowledge-based Integrated Business Planning Structural modelling; Some knowledge-based automation Customers Strategic alliances for long term horizon; shared gain Exploiting strategic opportunities through organisation agility Process operates at all levels of the corporate structure
Advanced Class A Integrated Business Planning Customer Experience Value Chain focus Optimization – scenario planning & modelling Strategically driven Reshapes to meet changing organisation Shaped to operate at all levels of the corporate structure; Supply chain with established collaboration Continuous Integrated Reconciliation Risks modelled, mitigated and managed through the process
Class A Integrated Business Planning Integrated Business plans with scenario planning Process used to create Annual Business Plan Business decisions not functional; Team working Formal way to run the business; this is the decision making process Risk assessed This process helps to shape optimal organisation structure Bottom up challenges the Top Down (Strategy, Business Plan and directives)
Foundation Process All elements defined with correct accountability, KPI’s and structure Focus is demand /supply tactical balancing Initiate integrated supply chain KPI’s Challenging behaviours but not yet team working
Disconnected Management Processes Traditional management meeting focused on the past Annual budgeting process with poor basis for forward projections Functional/silo management – few/unaligned objectives & measures Defensive functional behaviours
5 Step Maturity Map Introduced by Oliver Wight in 2000
The Oliver Wight Proven PathIntegrated Business Planning Jorney
© Oliver Wight International 1092 - 0215
MA
TR
IX
CB
R
IBO
MB
R
PM
R
DR
SR
IR
CBR – Corporate Business Review
IBO – Integrated Business
Optimization
MBR – Management Business
Review
PMR – Product Management Review
DR – Demand Review
SR – Supply Review
IR – Integrated Reconciliation
IBP Design & Detail Process Workshops
External &Internal Education
Start IBP Monthly Cycle
Coaching
Learn by Doing
Implementation
Executive Education
Determine Plan
Appoint Teams
Educate Teams
Readiness
Diagnostic
Feedback &
business
opportunity
education
Determine Value &
Business Case
Decision?
Excite & Commit
Complete Design
Design Review
Install the Design & Procedures
Complete Design
Top Business Benefits Attributed to Integrated
Business Planning (% respondents)
© Oliver Wight International New IBP number16
Source: AMR Research 2010
Increased Revenue
Improved Forecast Accuracy
Improvements in the Perfect Order /
Customer Service
Better Supply Planning / Schedule
Adherence
Improved New Product Inventory
Reduction of Inventory
Improved translation of Demand into
Procurement requirements / buy-side…
Capital Planning and Asset
Management
Developing and Executing Demand
Shaping Programs
Improved Logistics Planning
Improved Asset Utilization
52%
31%
31%
31%
28%
27%
21%
21%
20%
19%
17%
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