Integrated Business Management
Integrated
Business
Management
Our clients often raise questions about how Sales and Operations Planning (S&OP) should be performed in their companies. Traditionally, this process has been very siloed. That means sales and operations activities are kept separate from each other. Quite often, senior management comes up with the strategy, which in turn gets fed to the commercial team in order to proceed with the sales forecasting. The production planning team, then takes this as input, to determine their production or sourcing plan. In many companies, this leads to multiple sets of numbers: Sales and Marketing has their set of plans, Operations has theirs, and Finance has a third set.
This is where we come in. After a very brief diagnostic, we start by connecting your marketing, sales and operations people.
We educate your people on the S&OP best practices and facilitate design of an Integrated Business Management Model tailor made to your Organization.
Together we design an aggregate planning process that covers a rolling period of 24-36 months offering Management full visibility of the medium term and provides a basis for strategic decisions on building capabilities, making required investments, etc
We help you design the information flow as it journeys from your customer-facing part of your organization down to the production and sourcing teams. We connect the sales and operational teams. We advise you on how to manage the supply side. The operational levers available are boiled down to two main categories:
You can change the capacity through modifying your workforce– adjusting labor, overtime or outsourcing. These actions add capacity. Alternatively, you can adjust inventory.
Do you proactively pre-build inventory? Do you make it more modular?
On the other side, you’ve got demand levers to influence sales side like pricing and promotional funds. How does price change influence buying behavior? Does it urge you to increase market share? Increase the entire market size? Or do marketing funds shift a buying pattern?
S&OP aims to create balance. If you use one of these sales levers, what is the impact? This is an S&OP planning process. A structured set of meetings. It requires top and lower level buying and support. It forces joint decision making. It provides visibility of both sides of the organization– the sales side and supply or operational side. Finally, it forces Management to make those decisions.
The main sub-processes of Integrated Business management include:
- Innovation & Product/Services Portfolio Management. Impact of new products innovation and product elimination decisions
- Demand Planning and Management including demand sensing and demand shaping activities
- Supply Planning. Sourcing, production planning and inventory Management
- Financial Integration. Financial performance and working capital requirements
- Future operational plans and impact of changing market dynamics.
What Integrated Business Management delivers?
- A visible increase in teamwork. This is because you get away from the confusion and sub-optimal performance that’s part of the silo mentality. You set in place a formal way of running, developing and growing your business
- A team-based management style providing leadership and driving behavior change. The Integrated Business Planning process is “communication rich” and “collaboration driven.” It requires open and complete communication on important issues and requires cross-functional collaboration for their resolution.
- Demand and Supply normally in balance. Crisis management – putting out fires – is no longer a way of life.
- One set of numbers. Integrated product, marketing/sales, supply, and financial plans going out 24-36 months.
- Fewer surprises, resolved quickly. Integrated Business Planning provides a “window into the future.” With S&OP working well, people can see into the future; it enables Management to see potential problems and to resolve them before they move into the near term and become real problems.
- Engaged Top Management. This means you’ll no longer have to worry about attendance at the monthly Executive Meeting; the execs will be there because they’re deeply involved in the Integrated Business Management process. They know it helps them to run the business better.
- Continuous management of change, issues, assumptions and scenarios for the business.
- Superior customer service reduced inventories and optimized costs.
- Optimized effectiveness of the business in pursuit of value proposition and competitive priorities.