The urgent need for supply chain resilience is becoming increasingly apparent in today’s volatile, uncertain, complex and ambiguous (VUCA) world, so it’s time to take action. In my view, IBP is a great place to start. But what should you bear in mind to ensure that the implementation is successful?
In my previous blogs, I’ve repeatedly talked about integrated business planning (IBP) as the ideal framework for improving your supply chain resilience. There are so many aspects to resilience – supply chain design, collaboration, behaviour and agility – that it’s impossible to tackle them all at once. But, as is increasingly becoming apparent in today’s VUCA world, there’s no time to waste. And in my view, IBP is a great place to start. Why? Because resilience is all about making fast and effective decisions based on trade-offs – and for that you need a solid decision-making process.
Especially in times of crisis, it can be easy to get swept up by operational aspects and switch to firefighting mode. Immediate threats and challenges need to be dealt with swiftly, of course, but don’t forget the tactical side. That’s why IBP is so valuable – it forces you to take a step back from the executional level and think about the tactical and strategic level too.
IBP creates a structured approach for gathering the necessary facts and intelligence. It facilitates collaboration between all the relevant disciplines: Production, Supply Chain, Sales & Marketing, Purchasing and, importantly, Finance. As a result, you can take quick and decisive action on key issues such as dual sourcing, building stock or product redesign. This will steer your company’s supply chain towards a healthier future by helping you to emerge from any crisis stronger than your competitors. In fact, you can achieve countless benefits by strengthening your supply chain resilience. But how should you go about implementing IBP, and how can you ensure that it is a success?
"That’s why IBP is so valuable – it forces you to take a step back from the executional level and think about the tactical and strategic level too"
When it comes to the success of IBP, the first make-or-break factor is a clear strategic vision as your guiding light. Supply chain resilience requires a lifestyle change [LINK naar BLOG 1], and this is only possible with support and guidance from the top down. I recently helped a client in the financial services sector to successfully implement IBP and I can safely say that much of that success was down to the full commitment of the senior leadership team in both words and deeds, including clear communication of the reason for change. This commitment ensures that IBP is taken seriously by all the relevant parties. As a result, they attend all the IBP meetings well-prepared and with a firm focus on making the decisions that matter.
Secondly, for IBP to be truly effective, you need to establish the necessary collaboration not only internally, but also with your suppliers and other external partners.
This is where advanced digital planning tools [LINK naar BLOG 5] can come in useful, providing you with a steady stream of hard data from throughout the value chain. These insights form the basis for your ‘early-warning systems’ [LINK naar BLOG 2]. These tools also make it easier to model scenarios, so that you can fully explore the assumptions, risks and opportunities before making each decision.
For all this data to be used optimally, however, it is essential to have planners with the right skills who can analyse and interpret the information effectively.
“IBP should be seen as a continuous learning process in which you regularly review and fine-tune your internal and external collaboration”
Last but not least, it’s important to remember that resilience is holistic; rather than being a static solution, it is evolving all the time. Therefore, even after you have implemented IBP, you should see it as a continuous learning process in which you regularly review and fine-tune your internal and external collaboration.
Bearing these success factors in mind will help to ensure that IBP becomes embedded as a decision-making framework within your organization. In my view, this is a great place to start your journey towards supply chain resilience because it creates a solid foundation on which to continue to build and refine your ability to not only survive the next disruption, but also to emerge stronger than before.