Integrated Business

Planning
Best Practices
Presented 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 2
International
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

© Oliver Wight International 2010
 Experience transfer: Ownership and independence
 Key Components of Integration

PEOPLE &
BEHAVIOURS

PROCESSES TECHNOLOGIES

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 The Evolution of S&OP driven by Oliver Wight
– Where are you now?

early mid late late

70s 80s 80s 80s 90s 2000s 2010s

Operations Balancing
Financial Scenario
Planning Supply & Product and Collaborative
Integration Planning
Demand Portfolio Integrated
for all and
Sales & and Management Business
financial Strategic
Operations Inventory Integration Planning
projections Deployment
Planning Control

© Oliver Wight 5
International
 The Oliver Wight Business Model

Truth As MANAGEMENT One Set

BUSINESS
We Know It REVIEW of Numbers
STRATEGY
BUSINESSPLAN
PERFORMANCE

SUPPLY PRODUCT
REVIEW MANAGEMENT
REVIEW

DEMAND
REVIEW
Supply Chain Portfolio
Management Management

Supply Point Market Project

Management Management Management

Supplier Demand Resource

Management Management Management

Sales
Management

24 - 36 Procurement Management Common Set of

month Horizon Assumptions

© Oliver Wight 6
International
 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 Management Process

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 Integrated Business Planning

Management
Business
Review

Product
Supply
Management
Review
Review

Demand
Review

© Oliver Wight International 8 OWI 0005 - 06a

 The Review Cycle
Performance?... Realistic Plan?...Enough?...Gaps & Actions?

Chair: Supply Chain Director Chair: Product Management Director

Facilitator: Supply Chain Planning Facilitator: Product Planning Manager
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 Management
 Procurement/Purchasing
 Supply Chain Planning
 Programme / Project Mgmt.
 Finance

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 Reconciliation Review to Management Business Review
Management
Business Review
Reconciliation Review Chair: Business Leader (MD/CE)
Facilitator: IBP Process Leader
Chair and Facilitator:
IBP Process Leader
Outputs
Focus for MBR:
Latest view

Attendees: Vulnerabilities & Attendees:

Reconciliation Team: Opportunities Leadership / Management Team
Key players from the Business
including Finance Issues & resolution Agenda
Agenda Performance review
Proposed plan
Business trends
Issues arising
Gaps & gap closing
Major changes
Major changes & impact
Decisions required Key issues by Segment
Latest financial view
Latestview to Business Plan &
Vulnerabilities & Opportunities
Strategy
Gap closing scenarios
Plans agreed
Recommendations & focus for MBR
Input to next cycle

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 Making the Gap Visible
Top Down ↔ Bottom Up

Strategy 5 Year Horizon

Top
Down
Process Business Plan 3 Years

Bottom
Up
Process
24 Month Horizon

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 Matrix Adds Complexity

GLOBAL
CORPORATE
BOSTON

EUROPE
USA CANADA LATIN AFRICA ASIA-PACIFIC
REGION AMERICA MIDDLE-EAST REGION
REGION

CANADA MEXICO UK JAPAN

USA
BRAZIL GERMANY CHINA
GEORGIA

USA SOUTH
INDIA
MINNEAPOLIS AFRICA

TURKEY AUSTRALIA

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 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 Management Middle Management

Outcome Gap Closing Plans Production output

Decisions Tactical and strategic Tactical & short term

Integrate the Business Plan and

Process deploy Strategy
Meeting to review numbers

Optimization Scenario Modelling A plan

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 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 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

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International
 The Oliver Wight Proven Path
Integrated Business Planning Jorney

IBP Design & Detail Complete

Excite & Commit Readiness Implementation
Process Workshops Design

 Diagnostic  Executive  Complete  External &

MATRIX

Education Design Internal

 Feedback &
MBR
PMR
CBR

 Determine Education
IBO

 Design
DR

business
SR
IR

opportunity Plan Review  Start IBP

 Appoint Monthly Cycle
education CBR – Corporate Business Review  Install the
IBO – Integrated Business
Teams Design &  Coaching
 Determine Value & Optimization
 Educate MBR – Management Business Procedures  Learn by Doing
Business Case Review
Teams PMR – Product Management Review
 Decision? DR – Demand Review
SR – Supply Review
IR – Integrated Reconciliation

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 Top Business Benefits Attributed to Integrated
Business Planning (% respondents)

Increased Revenue 52%

Improved Forecast Accuracy 31%

Improvements in the Perfect Order /

31%
Customer Service
Better Supply Planning / Schedule
31%
Adherence

Improved New Product Inventory 28%

Reduction of Inventory 27%

Improved translation of Demand into

21%
Procurement requirements / buy-side…
Capital Planning and Asset
21%
Management
Developing and Executing Demand
20%
Shaping Programs

Improved Logistics Planning 19%

Improved Asset Utilization 17%

Source: AMR Research 2010

© Oliver Wight International 16 New IBP number

 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 17

2013