Author: Marieke Lenstra
If you have completed the first few phases of Sales & Operations Planning (S&OP) and are now ready to take things to the next level, it is time to take a closer look at Integrated Business Planning (IBP). The IBP process enables companies to make decisions about supply and demand from the perspective of the impact on their (financial) objectives.
Whereas S&OP often revolves around the feasibility of the (local) sales plan, IBP is focused on creating the optimal plan for the whole supply chain as well as the financial objectives for the next 18 months. The added value of IBP can vary from one company to another and depends on the strategy. For one company the added value will lie in optimizing the utilization of the production capacity, while for another it will be gaining market share through the controlled scaling up of new products and services. But it always revolves around being able to anticipate and adapt the supply chain to developments in a timely and integral manner in order to achieve the (financial) objectives – i.e. the year’s targets in terms of revenue and profit.
Involving the entire chain
IBP is all about integral decision-making. This requires active involvement from Finance, Sales, Product Management & Marketing, Production, Purchasing and Logistics. To what extent does everyone within the company regard the IBP process as the key platform for business planning and decisionmaking? IBP will broaden the scope of the supply chain, such as in terms of analysis of the possibilities and limitations of critical suppliers, or valorization of raw materials based on their expected (limited) availability and the level of demand in various markets.
Supply Chain Media and consultancy firm Involvation have developed this checklist to provide insight into the added value and the potential of your IBP process based on the following ten questions
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