Business Benefits with Integrated Business Planning
What is Integrated Business Planning?
In organizations it is often seen that the actuals rarely match with the plan. The gap between future forecast and the plan also increases the further we are looking into the future. This can be a sign that business has a problem in executing their business strategy. Integrated Business Planning (IBP) is about closing this gap so that plans reflect what the business in encountering in few months. In its core IBP links the supply chain with the business strategy.
Integrated business planning can be defined as profit driven operations management and business planning. IBP includes technology, applications, processes which connect planning functions of the enterprise. IBP is a highly collaborative process, and it covers all from marketing to operations. For detailed information on Integrated Business Planning, watch our webinar Integrated Business Planning with DELMIA Quintiq or continue reading this article.
One of the most important aspects in IBP is linking the strategic targets into tactical and operational planning. Shop floor scheduling decisions cannot be made based on the strategic goals such as customer satisfaction target, but instead we need to map the strategic KPIs into relevant planning KPIs for each planning stage. In shop floor scheduling, the relevant planning KPI might be the number of planned late orders. This topic is discussed in more detail in Roima Webinar Detailed Production Scheduling – Complex Plans Aligned to Strategic Goals.
In IBP is also important to consider the bottom-up approach i.e., how the feedback from execution operations affects the planning. Eventually the actuals from the operations could even affect the strategic planning decisions. Thus, the IBP planning horizon will reach from the near future planning (minutes, hours) into multiple years ahead. Readers familiar with Sales & Operations Planning (S&OP) should notice that one of the main differences between IBP and S&OP planning is that IBP includes also the operational planning level.
Implementing IBP in all its glory most likely seems like a daunting task, but luckily improvements towards IBP will already lead into benefits. A good starting point, or even a necessity, for the IBP is to have functioning S&OP process in place. If you want to know more about this, watch Roima Webinar Mature S&OP as Base for Integrated Business Planning.
Integrated Business Planning System
This post is not going to focus on the IBP processes, but instead we discuss what a good IBP system is. Nowadays the system landscape for enterprises is complex like shown in the picture below and moving towards IBP most likely means reducing the number of systems. In ideal case the whole IBP process can be run on a single application platform to keep the complexity and costs down.
The key features for a good IBP system could be defined as follows:
- Business focus: all planning decisions should support the business goals. Having up to date KPIs visible across the enterprise is crucial. Financial implications of the planning are aggregated back to the corporate management.
- Integration: integration needs to happen on multiple dimension: functionally, horizontally (plans on different levels) and vertically (coordination of plans and schedules).
- Collaboration: this is in the core of IBP and there cannot be any unmapped parts of the business.
- Scenario modeling: creating and evaluating what-if scenarios for the important business decisions.
- Workflow management: in order to work towards the same goal, people need to do things at the right time, and they need inputs at the correct moment.
- Single solution at all levels: as discussed above, the key in executing the strategic targets is the ability to map the goals to each planning level. The system must support both top-down and bottom-up approaches.
Closing the Gap Between Plans and Actuals with Roima and DELMIA Quintiq
As discussed, IBP planning system needs to work on a very different levels of planning. DELMIA Quintiq’s revolutionary Supply Chain Planning and Optimization (SCP&O) platform can handle all from strategic level S&OP planning to the detailed scheduling on the shop floor. In these various levels of planning, companies have a wide range of specific rules for the planning that need to be reflected in the system. To make sure that we are solving the right puzzle, DELMIA Quintiq has been built to be highly configurable solution, making the implementation of the business logic easy.
DELMIA Quintiq platform is focused on KPI-based planning at every level. KPIs are the key to the good plans and having KPIs always visible and updating in real-time supports the planner in making the best possible decisions. DELMIA Quintiq has also record-breaking optimization engine that allows businesses to gain that last boost in profitability.
Roima has been building DELMIA Quintiq solutions for years and Roima consultants have a deep and extensive understanding of the platform and how it can help business to gain value in all levels of planning. For more information on Integrated Business Planning, watch our webinar Integrated Business Planning with DELMIA Quintiq.
The Best Planning Result also requires accurate timely feedback from the operations. The best feedback to planning can be provided by the dedicated execution systems for each domain. In Manufacturing environment, the feedback comes from Manufacturing Execution System (MES), Warehouse Management System (WMS) and in Logistics it is provided by Transportation Management System or Logistics Control Tower.