S&OP and IBP: About resolutions and development plans

A new year is always an opportunity for a fresh start. When making my new year’s resolutions for 2018, I first took stock of what I am happy/unhappy with in my daily life, before deciding what I want to change and how to do so. In our assessments, we basically apply the same logic when supporting our customers in their journey from Sales & Operations Planning (S&OP) towards Integrated Business Planning (IBP). So let me continue in this analogy:

Where am I now?

In S&OP terms, that means ‘What is the current level of the process?’ and ‘What is the quality of the process?’ These are two different questions that need to be answered separately. In our line of work we often see companies that want to move to the next maturity level, only for an assessment to reveal that they need to fix the basics in their current S&OP process first.

What do I want to achieve? 

Many companies are keen to take the next step, from S&OP to Integrated Business Planning (IBP). Before doing so, however, it is important for the company to determine where it wants IBP to unlock business value. This depends on the characteristics of the company and the industry. In other words, what IBP is expected to achieve depends on which value drivers are important and how the company can control them better.

What are my next steps?

To ensure a more value-adding Integrated Business Planning (IBP) process, the required interventions must be clear. For example, what are the most important bottlenecks preventing this change? To identify these bottlenecks and determine the next steps in an S&OP assessment project, we use a 4-pronged change model:

  • Meaning: Are the benefits (and in particular the financial benefits) of an IBP process clear?
  • Willingness: What is the level of commitment among stakeholders, and which cultural aspects need attention? We will revisit this aspect in a future blog.
  • Logic: Are future processes clear and do the underlying systems provide the right information? See for example our previous blog, ‘S&OP software comes of age’.
  • Ability: Are the right competencies and skills in place? E.g. Which training or coaching is required to eliminate potential bottlenecks?

I’ve since decided on my new year’s resolutions (to exercise twice a week) and it’s still a case of ‘work in progress’ for my personal development plan. What’s the status of your company’s development plans for S&OP/IBP?

Any intelligent fool can make things bigger and more complex. It takes a touch of genius - and a lot of courage - to move in the opposite direction
Albert Einstein