Over the past few years, market volatilities and uncertainties have deeply impacted all aspects of business, including supply chains across the APAC region. As supply chain disruptions become increasingly prevalent, building a robust IBP process is a key element in helping companies across APAC and beyond navigate volatility and move their businesses forward.
While many companies understand the benefits of implementing an effective IBP process, it has remained an Achilles’ heel for companies across industries and regions. Ineffective IBP processes can leave a lot of value on the table—especially for larger companies—due to functional silos.
IBP has been a sticking point for many companies but market uncertainties, fueled by the COVID pandemic, have shaken many supply chain leaders and made them realize that processes that incorporate connectivity and real-time data will help them build supply chains that are more resilient to volatility.
However, leaders’ IBP expectations vs. the realities of what can be accomplished need to be better aligned. “I think the expectations out there from an IBP perspective are quite high,” says Schalk de Klerk, Vice President, Industry Solutions at :o9 Solutions. “Executives would like to see all sorts of scenarios and potential impacts across various metrics analyzed in real-time with the needed capability and insight, but the reality is different. It’s difficult to get done. In essence, it’s running a complex integration project every month to get your IBP cycle completed.”
:o9’s Schalk de Klerk and Quirin Regensburger spoke with supply chain experts including Geoffrey Thomas former Chief Logistics Officer for Woolworths and founder of XAct Solutions, Manish Shakalya, Region Director of Integrated Business Planning, Asia Pacific at Zimmer Biomet, Daron Ong, Asia Integrated Business Planning (IBP) Leader at 3M, and Nick Smith, Regional Supply Chain Manager (Environmental Science) at Bayer, about the IBP challenges companies are facing as well as potential solutions that can be applied.
Connecting the dots across the wider value chain
One of the biggest challenges companies may experience when implementing an IBP process is being able to connect product, demand, and supply—as well as all relevant teams—across all elements of planning. In other words, connecting all the dots.
Different teams and departments often work in silos and may be focused on separate initiatives, each with its own set of key performance indicators. Another challenge is that not all teams may be on board with engaging in an IBP process, especially individuals who may be more set in their ways of working. “I think the incentives should be a collective outcome on service revenue, cost, and quality that span end-to-end in a much better way than we often see,” Schalk says. “There’s bias and it comes down to who is the team that’s producing information because it’s for their own needs. Without a digital representation, there’s no logical arbiter in terms of how you could make the right decision. I think there’s a combination of silo ownership, and then information flow and quality.”
To ensure all teams start to align and work more collaboratively, it’s key that leaders chose the right individuals who have influence as change agents to lead an IBP implementation or upgrade. This will help drive not only behavioral change and acceptance of new ways of working but also set the stage for which tools, processes, and parameters are needed so that the IBP implementation is sustainable and cost-effective in the long term.
Implementing IBP can also help dismantle silos across an organization because if teams are aligned on enterprise objectives—instead of working on KPIs that serve their own functional agenda—oftentimes a consensus view of decision-making develops because there is visibility into one version of truth and accountability for the end-to-end outcomes. However, organizations also must build trust among teams, in addition to transparency and accountability, because when out-of-stocks occur, sales goals are not met or a financial forecast has gaps, a culture of trust can help teams find solutions instead of focusing on who to blame. “This is where the leadership at the highest level comes to the fore and differentiates an organization doing good IBP from another organization just checking off the IBP box,” says Manish.
Aligning enterprise initiatives
IBP can also play a key role in aligning a company’s financial and strategic plans with profitable growth. Companies can build stronger forecasts through predictive analysis using leading demand indicators as well as internal and external data, that help identify potential gaps that need to be addressed and identify corrective actions across all plans. “It’s about having the capabilities of connecting those dots… absorbing all of those different plans, automatically reconciling them along different dimensions… and having one single integrated plan across the board are the most exciting factors in terms of what the technology can really do,” says Quirin.
Gaining support from top executives
While supply chain teams and leaders may see the many benefits of implementing IBP, at the end of the day for an IBP integration to be successful―at every maturity level―an organization needs to have support for change being driven from the top. “I think you make the change journey much easier if you have the right ownership or sponsorship within the organization,” says Geoffrey. “How often do you see the CEO putting his or her hand up and saying, ‘I’m the champion of this IBP process.’ I think you can make the journey a lot easier if you have the top of the organization committed to it, then the functional leaders within the organization will follow.”
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