An integrated business planning approach

Budgeting, Planning & Forecasting

- 3 min read

How Can Integrated Business Planning Transform your Supply Chain?

The modern business planning environment is a minefield. Complex, multi-level processes combined with increasingly competitive markets and masses of data leave planners under pressure to effectively balance supply with demand while optimizing inventories, managing marketing campaigns, releasing new products, and supporting growth with adequate levels of human resource.

Managers frequently face the ‘planning paradox’, with the need to answer a greater number of questions in an increasingly shorter period of time and with limited resources. Add to this a growing number of stakeholders and the challenge of managing the supply chain is magnified further.

Read on to find out why organizations are turning to an integrated business platform to overcome these challenges and provide a more robust approach to their supply chain management.

What are the planning challenges found in modern supply chains?

While many organizations have implemented a range of sales and operations planning best practices, the result for many organizations is still a disparate, manual approach to supply chain planning which creates a multitude of issues affecting the productivity, transparency, efficiency, and output of the process.

Common supply chain planning problems include:

  • Data silos – Growing volumes of data held in disparate repositories with no link between them and no single point of truth which foster little to no communication between teams
  • Lack of focus – Business users spend more time trying to collate datasets at different stages of the process to gain clarity rather than evaluating options and making decisions
  • Low accountability – Lack of a central, agreed plan results in departments or divisions focusing solely on their own activities with little consideration for their impact on other business units
  • Poor flexibility – Traditional planning solutions (either spreadsheet-based or otherwise) are not able to cope with changing business demands, slowing down the planning process further

Integrated Business Planning in the Supply Chain

Offering a more joined-up approach, Integrated Business Planning (IBP) is fast becoming the new standard for modern planning activities. Enforcing integration between departments and removing data silos, IBP can increase alignment and accountability, improve visibility, and generate better decisions. The result is an accurate plan which has been created with input from all relevant parties and considers all relevant data which has an impact on the process. This leads to tangible improvements in overall business outcomes, something which is essential in a competitive supply chain where every financial or operational saving counts.

IBP software delivers a range of improvements to increase overall efficiency and effectiveness in the supply chain. For example:

  • Rather than adding inventory to protect against forecast inaccuracy, integrated planning solutions enable production schedules to be optimized through a better understanding of demand and the prevention of last-minute changes.
  • Estimated demand can be used as input to the production plan to ensure constant on-shelf availability of products, minimized waste, and reduced inventory.
  • As part of the production plan, fixed and variable costs, as well as material and resources requirements, can also be estimated to highlight and manage shortages and enforce alignment with procurement and human resources departments.

What are the benefits of using IBP in the supply chain?

Some of the other key benefits of using an IBP solution within operations and supply chain activities include:

  • The achievement of granular, real-time views of individual supply levels, demand forecasts, and costs
  • The creation of a connection between supply chain levels to enable the transition from a traditional cascading supply chain approach, where departments work in silos with little or no communication, to a joint plan, produced in parallel, that achieves full alignment
  • The connection of supply chain and finance departments to align the supply chain strategy with financial and business goals, minimizing risks and the volatility of results
  • The ability to anticipate, predict, and accommodate market changes in real-time thanks to predictive forecasting and what-if analysis

The bottom line is that IBP provides the end-to-end visibility which is often lacking in the supply chain process, enabling plans (and decisions) to be made based on a much stronger foundation.

To find out more about the benefits of IBP in the supply chain, watch our on-demand webinar: Driving End-to-End Supply Chain Transformation with IBP

Be the first to comment on this post

Your email address will not be published. Required fields are marked *