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Integrated Business Planning — Fact Or Fiction?

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Presented by Bill Dubois, business consultant, Kinaxis

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Integrated Business Planning — Fact Or Fiction?

  1. 1. Copyright © 2011 Kinaxis Inc. All Rights Reserved. 1
  2. 2. Integrated Business Planning: Fact or Fiction? Bill DuBois business consulting bdubois@kinaxis.com Copyright © 2011 Kinaxis Inc. All Rights Reserved. 2Copyright © 2011 Kinaxis Inc. All Rights Reserved.
  3. 3. What’s wrong with this picture?Copyright © 2011 Kinaxis Inc. All Rights Reserved. 3
  4. 4. Agenda•  Market drivers•  IBP = Mature S&OP?•  People, Process, Technology•  Continuous and Collaborative S&OP Copyright © 2011 Kinaxis Inc. All Rights Reserved. 4
  5. 5. Market Drivers Copyright © 2011 Kinaxis Inc. All Rights Reserved. 5Copyright © 2011 Kinaxis Inc. All Rights Reserved.
  6. 6. Today’s multi-tier global supply chain Pervasive, global outsourcing Product portfolio proliferation Shrinking product lifecycles Increasing demand volatilityCopyright © 2011 Kinaxis Inc. All Rights Reserved. 6
  7. 7. A volatile economy makestraditional budgetsobsolete before they’re evencompleted.Source: McKinsey Quarterly, Just-in-time budgeting for a volatile economy, Spring 2009 Copyright © 2011 Kinaxis Inc. All Rights Reserved. 7
  8. 8. Using inventory to buffer volatility Demand forecast (units) •  These are primarily financial decisions Hi scenario400 •  They have impact on Uncommitted –  Investment300 –  Revenue Flexible quantity –  Margin200 Base scenario contract –  Market share –  …100 Fixed quantity •  Yet they are Lo Scenario contract expressed in Units 0 Time Venu Nagali , Procurement Risk Management (PRM) at Hewlett-Packard Company, Stanford Risk Management Roundtable, November 13, 2006 http://www.gsb.stanford.edu/scforum/login/pdfs/HP%20%20PRM%20Nov%2006%20Venu%20Nagali.ppt Copyright © 2011 Kinaxis Inc. All Rights Reserved. 8
  9. 9. How the CEO/CFO sees the business How to Master Analyzing the Income Statement, Old School Values blog, January 20th, 2009Copyright © 2011 Kinaxis Inc. All Rights Reserved. 9
  10. 10. How the CEO/CFO sees the business How to Master Analyzing the Income Statement, Old School Values blog, January 20th, 2009Copyright © 2011 Kinaxis Inc. All Rights Reserved. 10
  11. 11. S&OP – Bridging the gap between functions Goal: Make the financial budget. Top-down focus. Wants: Control and predictability of operations Forecast: The budget/annual operating plan FinanceGoal: Maximize Goal: Minimize supplyrevenue and market chain costs, often Demandshare Side inventory Sales and OperationsWants: Guaranteed Marketing Supply Wants: Minimumproduct availability Side demand uncertaintyForecast: Sales plan Forecast: Supply plan Supply Chain Goal: A feasible plan. Bottom-up focus Wants: Minimize risk and disruption Forecast: The demand plan Copyright © 2011 Kinaxis Inc. All Rights Reserved. 11 11
  12. 12. S&OP – Bridging the gap between functions Goal: Make the financial budget. Top-down focus. Wants: Control and predictability of operations Forecast: The budget/annual operating plan FinanceGoal: Maximize Goal: Minimize supplyrevenue and market chain costs, often Demandshare Side inventory Sales and OperationsWants: Guaranteed Marketing Supply Wants: Minimumproduct availability Side demand uncertaintyForecast: Sales plan Forecast: Supply plan Supply Chain Goal: A feasible plan. Bottom-up focus Wants: Minimize risk and disruption Forecast: The demand plan Copyright © 2011 Kinaxis Inc. All Rights Reserved. 12 12
  13. 13. IBP = Mature S&OP? Copyright © 2011 Kinaxis Inc. All Rights Reserved. 13Copyright © 2011 Kinaxis Inc. All Rights Reserved.
  14. 14. Gartner PerspectiveCopyright © 2011 Kinaxis Inc. All Rights Reserved. 14
  15. 15. Gartner PerspectiveCopyright © 2011 Kinaxis Inc. All Rights Reserved. 15
  16. 16. Traditional Planning Process SegmentationCopyright © 2011 Kinaxis Inc. All Rights Reserved. 16
  17. 17. Traditional Planning Process SegmentationCopyright © 2011 Kinaxis Inc. All Rights Reserved. 17
  18. 18. Continuous and Collaborative S&OPCopyright © 2011 Kinaxis Inc. All Rights Reserved. 18
  19. 19. Continuous and Collaborative S&OPCopyright © 2011 Kinaxis Inc. All Rights Reserved. 19
  20. 20. Process, People, Technology Copyright © 2011 Kinaxis Inc. All Rights Reserved. 20Copyright © 2011 Kinaxis Inc. All Rights Reserved.
  21. 21. Gartner: Most companies stuck at stage 1 or 2 Larry Lapide – Demand Management Solutions Group – 2008 Copyright © 2011 Kinaxis Inc. All Rights Reserved. 21
  22. 22. Gartner: Most companies stuck at stage 1 or 2 Larry Lapide – Demand Management Solutions Group – 2008Relative importance of technology Copyright © 2011 Kinaxis Inc. All Rights Reserved. 22
  23. 23. Continuous and Collaborative S&OP Copyright © 2011 Kinaxis Inc. All Rights Reserved. 23Copyright © 2011 Kinaxis Inc. All Rights Reserved.
  24. 24. “If I had asked people what they wanted, they would have said faster horses.” - Henry FordCopyright © 2011 Kinaxis Inc. All Rights Reserved. 24
  25. 25. Continuous and Collaborative SOP AND, not OR Collaborative, not linear Event-driven, not calendar-driven What If AnytimeCopyright © 2011 Kinaxis Inc. All Rights Reserved. 25
  26. 26. Thank you! Questions? Trevor Miles | e: tmiles@kinaxis.com | m: +1.647.248.6269 | t: @milesahead Copyright © 2011 Kinaxis Inc. All Rights Reserved. 26Copyright © 2011 Kinaxis Inc. All Rights Reserved.
  27. 27. TOP 5… Top 5 signs your SOP process is in trouble…1. You hold a “tribal council” to vote off the customerswho won’t be getting their orders. 2. You’ve just hired a new SOP consultant: Zelda theonline psychic. 3. Your CEO pronounces it “Sales and Oooops?!” 4. Your IT Director is extremely excited about the newSOP tool he just purchased. It’s called Excel. 5. Your VP of Manufacturing calls it “Sales OR OperationsPlanning.” Copyright © 2011 Kinaxis Inc. All Rights Reserved. 27
  28. 28. Copyright © 2011 Kinaxis Inc. All Rights Reserved. 28

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