Integrated Business Planning (IBP) is the process that extends the principles of Sales and Operations Planning (S&OP) throughout the value chain, connecting the strategy and business plan with a focus on effective decision-making to drive growth.
The term IBP is getting a lot of attention these days, and for good reason. Today’s complex marketplace dynamics and volatile, uncertain supply chains mean traditional, often spreadsheet- or ERP-based monthly S&OP cycles are no longer up to the job.
Instead, organizations need a more comprehensive, collaborative, and data-driven process to coordinate and plan their businesses, one that exposes and reduces risks and maximizes business opportunities, while enabling them to set financial targets and support business strategy.
Some have dubbed this broader approach as IBP to set it apart from S&OP to help foster internal buy-in. It’s semantics. For organizations ready for an advanced level of S&OP maturity, a well-designed, modern, flexible S&OP solution that is part of a well-designed end-to-end supply chain planning platform enables them to achieve impactful outcomes, including:
- Run multiple scenarios to make informed trade-off decisions
- Improve alignment and collaboration across functions, and across enterprises
- Continuously orchestrate several concurrent business activities to make rapid adjustments and accommodate for unexpected disruptions
- Work at an accelerated cadence than before
The beauty of a solution like John Galt Solutions’ Atlas Planning Platform is that you can evolve from where you are today into an IBP approach without having to change your solution or upgrade your supply chain planning software. So, when you’re ready to move to an advanced level of S&OP maturity, you can avoid all that disruption and instead, focus on leveling up your abilities.
So, What Is Advanced S&OP?
Like IBP, advanced S&OP processes are all about increasing the scope, outlook, and planning term of traditional S&OP activities beyond their historic limitations. Advanced S&OP processes integrate tightly with strategy, so decisions are being made with a strong focus on business outcomes and end-to-end orchestration. This is essential for supporting growth plans, such as improved service levels, market opportunities, product commercialization, and achieving competitive advantage.
Advanced S&OP takes network-wide visibility into account and taps key resources, such as the digital supply chain twin (DSCT) underlying the broader planning end-to-end supply chain planning platform it’s a part of, to model the supply chain and demand within the constraints, uncertainties and interdependencies that make up the entire ecosystem. This enables more dynamic and data-driven decision-making.
A key outcome of advanced S&OP is profitable shared value creation across the entire supply chain network, translating innovation into execution, risk management, and leveraging business intelligence to measure end-to-end supply chain performance. Now, your team can be more innovative and experimental to create value.
It’s also about working in longer time horizons—two to five years out or even more—to support strategic CapEx decisions. This might include erecting a new plant or entering a new market, product category, and more.
Focus On Capabilities and Outcomes, Not Labels
What’s clear is that failing to push your S&OP toward advanced levels of maturity is not an option in today’s highly complex and uncertain environment. Without advanced capabilities, your organization can’t get visibility into the revenue or profit implications of decisions, or the information needed to balance the tradeoffs. It also limits your demand and supply balancing capabilities. Your operational plan remains disconnected from the financial plan because these functions are not sufficiently aligned across supply chain, commercial, product, and finance.
Addressing the need to evolve your S&OP to more advanced levels starts with identifying where the gaps lie between your current and required capabilities, and then seeking out the right partner to help you get there. Rather than getting caught up in labels, focus on solutions that deliver the visibility, control, coordination, and collaboration critical to aligning your business with your strategy.
If you’re already with John Galt Solutions, those capabilities are at the ready in Atlas. If you’re not, adopting John Galt Solutions’ Atlas Planning Platform enables you to elevate your supply chain management to meet today’s complex needs—including the integrated business planning activities critical to integrating your operational and financial goals to maximize business opportunities and minimize risk.