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

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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

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One Set

of NumbersTruth As

We Know It

Integrating Business Planning is:

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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

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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?

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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

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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

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Strategy 5 Year Horizon

Business Plan 3 Years

Top

Down Process

Matrix Adds Complexity

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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

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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

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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

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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%

Industry recognized best practice checklists for:

Oliver Wight’s Class A Milestone to Drive Internal

Assessment and drive people and process improvement

© Oliver Wight International

2013

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