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The outcome of IBP is a true business plan, rather than a demand plan, supply plan, production plan, or a financial budget.Through IBP, enterprises gain a single holistic plan that unifies the business, seamlessly connecting corporate performance management, financial planning processes, and operational planning systems.It is equally critical, in the face of today’s highly outsourced and distributed supply chain, where businesses enable collaborative inputs from customers and suppliers in their planning process.
This holistic business plan increases business alignment through the sharing of performance strategies and helps quantify business risks, enabling enterprises to rapidly adapt to meet challenges.
From S&OP to IBP Every organization has a number of processes in place, but there is also likely to be a certain amount of inertia because people are used to doing things in certain ways.
S&OP has done much to enhance the efficiency and profitability of supply chains in virtually every industry, but this process needs to be not just a supply chain process, but rather and end-to-end business view.
IBP helps finance, R&D, merchandisers, planners, marketers, the supply chain, and strategic partners to take the next step forward.
These processes represent all the activities that organizations in all industries undertake.
Some processes are highly structured, such as high-volume manufacturing processes, while others, such as medical care that must be tailored to specific patients’ needs, are more unstructured.S&OP is designed to find and react to supply chain gaps and by its’ process is reactionary.IBP sits at the heart of many organizations as the management process that runs the entire business.This process aligns merchandising, sales, planning, Research & Development (R&D), operations, finance, and other functional areas of the organization, into a single line of sight, from plan to performance to profit.Internal alignment is just part of the Integrated Business Planning (IBP) process to create company agility that can recognize, recalibrate, and respond to changing conditions.It is this journey to true IBP, which allows strategic, bottom-line oriented “what if” scenario modeling, and must be managed by a strategic process which can move at the pace of today’s global business environment.These two processes are intricately connected and create the “company dialogue” that enables the business to understand and be lead by a common vision of the core values and objectives.The real power of IBP is in enabling effective decision making to control the future direction of the company.It makes the critical link between strategic plans and the current reality, acting as an early warning system for performance gaps.Sure, people may agree that some improvement may be possible, but without seeing the big picture they do not see the need for change.At its core, the IBP takes rigid, independent processes and transforms them into flexible, choreographed business services that work together to create substantial business value.