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The road from S&OP to IBP Busting the myth November 6th, 2018 Geneva, Switzerland Ieke le Blanc
The road from S&OP to IBPBusting the myth
November 6th, 2018
Geneva, Switzerland
Ieke le Blanc
How would you describe IBP in three words?
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S&OP and IBP as decision making processes
Process designed around decisions
Demand/Supply balancing at the basis
Driven by business leaders
“IBP is a set of decision-making processes to balance demand and supply, to integrate financial planning and operational planning, and to link high level strategic plans with day-to-day operations.”
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Link financial planning to volume
planning
Realizing strategic
ambitions
The most well-known and wide spread maturity model is Gartner’s
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Fo
cus
Target
outside-in
inside-out
cost focus service focus
Stage 1React
Stage 2Anticipate
Stage 3Integrate
Stage 4Collaborate
Stage 5Orchestrate
no shared goals
Integrated Business Planning (IBP)
12 S&OP Building Blocks
TIMELY DECISIONS REGULAR PROCESS ONE NUMBER PLAN STATISTICS
EVENT PLANNING
FIT FOR USE TOOLS IMPROVEMENT
ROBUST SUPPLY OPTIMIZE INVENTORY
PLANNING SKILLS
FOCUS ENRICHMENT
COLLABORATIVE BEHAVIOR
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12 S&OP Building Blocks
Interested to know more on the 12 building blocks?
Check our whitepaper and the presentation later today!
More whitepapers our website:
www.eyeon.nl
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Traditional view
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Business leader driven change
House of IBP
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Process designed around decisions
Balance demand and supply
Basic S&OP
Hygiene factors
Link financial and volume planning
Link strategic plans with operations
Integrated Business Planning
Link financial & volume planning
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Drivers Operational plans Responsible
• Market growth/share• Price positioning• Order book, Installed Base,
Sales Volume un)constrained• Promotions and events
• Marketing (mix) plan• Demand plan• Supply plans
• Sales• Logistics• Marketing
• Factory cost price• Manufacturing efficiency• Freight and handling
• Factory plan• Logistic plan
• Factory• Physical Distribution
Calculated
• Promotions• MARCOM
• Marcom plans • Marketing• Sales
Calculated
• Sales force • Financial budget • Sales management
Calculated
• R&D projects• New product introductions
• R&D plan• PIP plan
• R&D function
• Overhead • Financial budget• Cost reduction program
• General management
Calculated
P&L item
Net Sales
Cost of Goods Sold
Integral Gross Margin
Variable SellEx
Integral Variable Margin
Fixed SellEx
Integral Sales Margin
R&D
SG&A
Integral EBIT
Link strategic plans with operations
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B
A
Optimalization Demand / Supply with the objective to have 1 aligned forecast in volume and value
Manage and close GAP between reality and strategy
B
A
Business leader driven change
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Culture eats strategy for breakfast
- Peter Drucker -
Future competition will be between cultures rather than supply (chain) networks>
Company Case – Major player in the biochemical industry
– Global market leader in lactic acid and lactic acid derivatives for wide array of applications
ranging from medical biomaterials, food preservation and plastics
– Global Manufacturing footprint, with cross company supplies.
– Existing S&OP process was supply chain driven (balancing demand – supply volumes).
– Strategic ambition for double digit growth ambition (year after year)
by new applications (existing products) and innovations (new products)
to drive the growth, while optimizing capacity.
The key question how?
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Business leader driven change
– Company wide visual
– Ownership• COO and CCO as owner (both project as well as process)• VP Marketing as the Global &OP Champion (leader)
– Empower the organization• Push the D-down• Closed-loop communication
– The required behavior is defined and linked to company values
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Link financial & volume planning
– Changing the cost price structure:sourcing is a supply decision
– Existing monthly business review (MBR) is integrated in the S&OP cycle
– Integral decision making
– September S&OP plans serves asstart pointing for next years budget
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Link strategic plans with operations
– Sales “decides” on operations capex budgetfor capacity extension (part of S&OP)
– New sales and innovations are pro-actively managed(Opportunity Business Forecast):
• Different roles for sales and product management
• Operations involved: avoid surprises
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Start tomorrow, if you aspire to reach IBP in your organization:
If you’re not a business leader
1. Do not pitch the story yourself to the board (backseat chess player?)
2. Convince your functional leader
3. Find a board member sponsor
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If you’re a business leader
1. Seek common ground but take into account functional differences- Create awareness
- Make info sharing easy
- Ask only what you need
- Ask only what they know
2. Turn your functional champions into entrepreneurs
3. Create the right culture
4. Pick your battles- Ignore the antagonists
- Provide the right training to the willing (behavior or concept)
- Help the S&OP leaders sustain the process and culture
Do you have questions?
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Or contact me later:
EyeOn bvCroylaan 145735 PC Aarle-RixtelThe NetherlandsTel.: +31 (0)[email protected]
EyeOn AmsterdamVijzelstraat 68-721017 HL AmsterdamThe NetherlandsTel.: +31 (0)[email protected]
EyeOn BelgiumDe Keyserlei 58-60 B19B-2018 AntwerpBelgiumTel.: +32 (0)3 304 95 [email protected]
EyeOn SwitzerlandQuai de l’Ile 13CH-1204 GenevaSwitzerlandTel.: +41 (0) 22 539 19 [email protected]
Forecast ServicesCroylaan 145735 PC Aarle-RixtelThe NetherlandsTel.: +31 (0)[email protected]
Ieke le Blanc
+31 6 2230 55 54
eyeon.nleyeon
