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How integrated business planning improves supply chain effectiveness
▉ Insight 1
Capturing an accurate picture of demand presents a sizable challenge. One answer is integrated business planning.
For businesses that neglect to integrate their planning processes, the risk is considerable. Relative to supply chain, it includes a heightened chance of stockouts, which in turn can lead to lost sales and increased reputational risk, as well as higher costs stemming from overtime, payments for excess or premium capacity and expedited transportation.
Failure to implement a sound integrated business planning (IBP) process also escalates an organization’s risk of running afoul of its employees, as inefficient planning can burn out and demoralize a labor force and multiply turnover. It also leaves businesses saddled with rigid processes and poor visibility that impede leaders’ ability to make good trade-offs.
▉ Insight 2
A thoughtful Integrated Business Plan (IBP) implementation opens visibility across the supply chain and aligns processes to cut waste and curb the bullwhip effect.
The benefits of IBP are highlighted at a large consumer products company, where a career upskilling program has boosted quality of life for planners, who can focus on solving problems rather than dredging through data. They work on systems as “citizen developers,” and the organization has achieved impressive results by multiple metrics: saving $10 billion, 500 SKUs per planner (a 30% improvement) and 20 days of inventory on hand, and posting an on-time in-full mark of 98.5%.
