S&OP to IBP summit 2022

Supply Chain

- 4 min read

Insights from the S&OP to IBP Summit

The summit in Amsterdam (1st – 2nd Dec) was full of ideas and examples of businesses not just surviving but also thriving, despite current market conditions. Key among the identifiable trends were:

  • a clear need to read the market
  • explore and make better use of data
  • utilize tools and resources with greater ability
  • enhance the capability to leverage competitive advantage and market opportunity.

Reflecting on the presentations we saw from the various organizations and business leaders, learnable lessons and observable examples are there for the taking. The key is taking these lessons and turning them into actionable strategies.

Planning is still vital

Although there were some lessons to be learned from S&OP thinking, there was real momentum for developing and expanding robust and expansive planning capability.

Ensuring that you are leveraging intelligence in data and the extended ecosystem and planning community has highlighted a need for more consistent ways of sharing assumptions, a more substantial agreed vocabulary on risk and exposure, and a need to extend and highlight planned alternatives in the mix.

To do so, create a mindset that:

  • assesses what might happen and what possibilities may occur
  • compares the most likely scenarios
  • agrees on the assumptions in the model (including upside and downside possibilities, rather than the automatic pilot)
  • approaches S&OP from a Supply Chain driven perspective rather than a market-driven one to protect our critical customers in supply disruption cases

Maintain S&OP during uncertainties and crises, even if the data is incorrect. There are plenty of examples from the conference that emphasize how a number of businesses would have failed without S&OP.

The Integrated Business Planning (IBP) process provides structure, format, and place for the discussion and consideration of ways forward. Without the rigor and design of IBP, plans remain reactive and based upon limited data sets whereas those businesses who maintain the process through the noise have arrived in a better place. They still have a process in place to discuss and manage risks.

Ensure Supply

In the discussions on maintaining reliable supply was a strong consensus on building long-term relationships with suppliers. Companies that have done so are more successful during disruptions. Maintaining longer-term relationships empowers and enables awareness and responsiveness to shorter-term change. The commitment to adapting and responding is embedded in the maturity of the relationship but also empowers and enables the utilization of short-term alternatives.

Enable appropriate responsiveness

Take care not to become too hyperreactive in the short term. Reacting too often to changes risks creating a nervous Supply Chain, so identifying points of flex, places for buffers to handle variability, and using tools to differentiate significant changes means many less significant changes are business as usual and are driven by the planned flex situations.

The need to consider alternatives and scenarios speedily during the process showed a continued focus on understanding pinch points and identifying bottlenecks.

There is still a need and a continued hunger to explore a financial view of these alternatives and the root plans, especially in this season of significant material price pressure.

Keep financial viability in mind

Financialize your Supply plans; a simple cash-up of volume times a value is no longer suitable for making accurate business decisions. Understanding the tradeoffs between availability and pricing and the cost of some alternatives is clearly a tension for many working with extended Supply Chain lines.

Visibility into critical locations, resources, and materials highlights an area for further development, allowing the strength of the extended Supply Chain to drive competitive advantage and leverage capability and capacity.

For those with more global Supply Chains, the exposure to increased risk both commercially and geopolitically highlighted a fresh focus on rightshoring with the need to consider the entire plan in terms of end-to-end inventory under risk and currency-driven vulnerabilities.

Final thoughts

For those still thinking of starting on an IBP journey, there is a clear call to get started as soon as possible. Don’t wait for the data to be correct or the people to be ready. Instead, lead from the top, drive cultural change, and build capacity for change.

You can further explore the topics touched on in this blog with some key Board documents focused on the supply chain and IBP:

All-in-all, a thoroughly insightful conference demonstrating how vital IBP is to the health and vitality of business today and for leveraging Intelligent Planning to enable enterprises to extend and expand in today’s volatile climate.

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