Organizational collaboration. It’s no cakewalk – at least, not in the context of integrated business planning (IBP). Indeed, perhaps the best way to understand the role of collaboration – literally, laboring together – in establishing a mature IBP discipline is to set aside modern, softer connotations of the word and recall that labor comes down to us through Middle English and Old French from the Latin for “toil and trouble.”
However, consistent organizational collaboration benefits companies in many ways. Among them, it offers better problem-solving capabilities. When we hit roadblocks in our individual efforts, we often convene a group of peers to offer perspective, brainstorm solutions, etc. And when a group of people pool their knowledge, skills, and experiences, then debate potential solutions, projects that were stalled will begin to move forward once again.
IBP makes organizational collaboration the norm, not a last resort or even a ‘plan B’. Here are three ways IBP fosters collaboration across the organization to increase supply chain reliability, improve customer satisfaction and support corporate financial goals.
1. Including Sales in the process creates a new appreciation for forecasting. Many companies struggle with IBP precisely because it isn’t integrated across multiple business functions. For example, IBP should include Sales. Using IBP, sales leaders can study traditional sales data, such as history and forecasts, juxtaposed with inventory projections and manufacturing capacity. The insights can be impactful, in a healthy way, for those who might otherwise downplay the importance of forecasting. IBP reveals that forecasts drive real commitments from the rest of the organization.
2. Collaboration outside the business walls – involving customers. Companies sometimes discover a hard reality when they take large orders from new customers. Celebration gives way to a fight for capacity. Using IBP’s “what-if” analysis capabilities, companies can assess whether they’re prepared to handle new business. Analysis might reveal capacity opportunities with other product families. Some companies have taken the next step by integrating their IBP processes with key customers to enhance service levels while driving down inventory stored at various points across the value chain.
3. Winners and losers. Whether launched internally or via Mergers and Acquisitions (M&A) activity, more companies are rushing new products and new extensions to market, hoping for a few wins. Without focused collaboration, this creates turmoil for production planning and decision-making in general. Some companies are using IBP to identify trends that provide early indications of product success or failure.
The complexity and volatility of today’s global supply chains have led more companies to emphasize IBP as a strategic operating discipline. And mature IBP requires collaboration to eliminate data silos and allow decision-makers to understand the internal and external impacts of their actions. According to industry experts, companies that manage IBP purely as a “closed” supply chain process are not seeing the bigger benefits available through purposeful and widespread collaboration.
Product Manager, Integrated Business Planning
David Pinsoneault brings more than 15 years of experience in supply chain planning and supply chain planning systems to Logility. He provides a unique combination of business and systems support knowledge to successfully capture and translate business requirements into technical and product solutions. His experience includes full cycle product development of new software solutions and functionality, as well as functional implementation consulting.