Integrated Business Planning Best Practices

Transcription

1 Integrated Business Planning Best Practices Presented by Catherine Schmitt-Weber & Les Brookes Oliver Wight EAME

2 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

3 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 Benefit driven: Time to results Experience transfer: Ownership and independence Oliver Wight International 2010

4 Key Components of Integration PEOPLE & BEHAVIOURS PROCESSES TECHNOLOGIES Oliver Wight International 4 OWI

5 The Evolution of S&OP driven by Oliver Wight Where are you now? 70s early 80s mid 80s late 80s late 90s 2000s 2010s Operations Planning Sales & Operations Planning Balancing Supply & Demand and Inventory Control Financial Integration for all financial projections Product and Portfolio Integration Scenario Planning and Strategic Deployment Collaborative Integrated Business Planning Oliver Wight International 5

6 The Oliver Wight Business Model Truth As We Know It MANAGEMENT BUSINESS REVIEW STRATEGY BUSINESSPLAN PERFORMANCE One Set of Numbers SUPPLY REVIEW PRODUCT MANAGEMENT REVIEW Supply Chain DEMAND REVIEW Portfolio Supply Point Supplier Market Demand Project Resource month Horizon Sales Procurement Common Set of Assumptions Oliver Wight International 6

7 Integrating Business Planning is: 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 Process Oliver Wight International

8 Integrated Business Planning Business Review Supply Review Product Review Demand Review Oliver Wight International 8 OWI a

9 The Review Cycle Performance?... Realistic Plan?...Enough?...Gaps & Actions? Chair: Supply Chain Director Facilitator: Supply Chain Planning Manager Chair: Product Director Facilitator: Product Planning Manager Chair: Sales & Marketing Director Facilitator: Demand Manager Attendees: Operations managers Distribution and logistics Procurement Facilities management Finance Attendees: Marketing by accountability Sales by accountability (e.g. Key Account Managers) Finance Attendees: Technical / Design / Development Marketing & Brand Procurement/Purchasing Supply Chain Planning Programme / Project Mgmt. Finance Oliver Wight International

10 Reconciliation Review to Business Review 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 Outputs Focus for MBR: Latest view Vulnerabilities & Opportunities Issues & resolution Proposed plan Gaps & gap closing Decisions required Business Review Chair: Business Leader (MD/CE) Facilitator: IBP Process Leader Attendees: Leadership / Team Agenda Performance review Business trends Major changes Key issues by Segment Latest view to Business Plan & Strategy Plans agreed Input to next cycle Oliver Wight International

11 Making the Gap Visible Top Down Bottom Up Top Down Process Strategy 5 Year Horizon Business Plan 3 Years Bottom Up Process 24 Month Horizon Oliver Wight International a

12 Matrix Adds Complexity GLOBAL CORPORATE BOSTON USA CANADA REGION LATIN AMERICA EUROPE AFRICA MIDDLE-EAST REGION ASIA-PACIFIC REGION CANADA MEXICO UK JAPAN USA GEORGIA BRAZIL GERMANY CHINA USA MINNEAPOLIS SOUTH AFRICA INDIA TURKEY AUSTRALIA Oliver Wight International

13 Integrated Business Planning Process Good vs. Poor Characteristics Characteristic Typical Good Typical Poor 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 Middle Outcome Gap Closing Plans Production output Decisions Tactical and strategic Tactical & short term Process Integrate the Business Plan and deploy Strategy Meeting to review numbers Optimization Scenario Modelling A plan Oliver Wight International

14 Integrated Business Planning Maturity 5 Step Maturity Map Introduced by Oliver Wight in 2000 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 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 Oliver Wight International

15 MATRIX CBR IBO MBR PMR DR SR IR The Oliver Wight Proven Path Integrated Business Planning Jorney Excite & Commit Readiness IBP Design & Detail Process Workshops Complete Design Implementation Diagnostic Feedback & business opportunity education Determine Value & Business Case Decision? Executive Education Determine Plan Appoint Teams Educate Teams CBR Corporate Business Review IBO Integrated Business Optimization MBR Business Review PMR Product Review DR Demand Review SR Supply Review IR Integrated Reconciliation Oliver Wight International Complete Design Design Review Install the Design & Procedures External & Internal Education Start IBP Monthly Cycle Coaching Learn by Doing

16 Top Business Benefits Attributed to Integrated Business Planning (% respondents) Increased Revenue 52% Improved Forecast Accuracy Improvements in the Perfect Order / Customer Service Better Supply Planning / Schedule Adherence 31% 31% 31% Improved New Product Inventory Reduction of Inventory 28% 27% Improved translation of Demand into Procurement requirements / buy-side Capital Planning and Asset Developing and Executing Demand Shaping Programs Improved Logistics Planning 21% 21% 20% 19% Improved Asset Utilization 17% Source: AMR Research 2010 Oliver Wight International 16 New IBP number

17 Oliver Wight s Class A Milestone to Drive Internal Assessment and drive people and process improvement Industry recognized best practice checklists for: Oliver Wight International