The past eighteen months have shone a massive spotlight on supply chains and their issues. We’re still seeing them now, with reported shortages in all sorts of areas from building supplies to garden furniture.
The huge disruptions brought about by COVID-19, together with other factors such as Brexit, geopolitical trade tensions and even Suez canal blockages, have made CEOs and business leaders painfully aware of the interdependencies that their supply chains and by extension their organisations have.
Previously, some leaders may almost have thought there was a ‘black box’ that joined everything up and delivered the products the business needed. Unfortunately, though, the magic in this is limited: it all comes down to collaboration across the business and alignment around a single version of the truth.
IBP – Supply Chain as enablers
All of this means that Integrated Business Planning (IBP) has become critical to organisations across sectors. IBP is the way to ensure that everyone in the organisation is working to a common agenda in which numbers are aligned. It also means that everyone is working towards the best outcome for the business as a whole, not just optimising their own variable in the equation.
Supply chain teams have a pivotal role to play. While the Finance function and the CFO individually often sponsor IBP, it is the supply chain function that acts as the administrators and enablers of the process. For a start, they are the ones who usually ‘hold the pen’ in that they will lead on the demand data entry into the central system based on input from other functions.
Getting ‘future fit’
With so much focus now on supply chain issues, this is a great time for supply chain teams to step up and grasp the opportunity. The ramifications of COVID-19 mean that almost every business is having to rethink and reshape its business model. This requires new and future fit supply chains, both to remediate the vulnerabilities that the last 18 months have exposed and to be resilient and ready for the new business reality.
That’s why IBP matters - strengthening IBP within your organisation will give you the needed clarity on your business and thus a robust platform to build your renewed supply chain on.
Commitment and collaboration
To be successful, it’s essential of course that all the key players around the business come together, physically or virtually, to discuss, align and commit. Commitment is the key point. There may be times when there are disagreements between, say, operations and sales, but in the end they need to come together as custodians of the overall business and commit to deliver the plan together.
There are lots of technology tools that can be used to help – the key thing is to find the right tools for each individual business. Today we can no longer say technology is a constraint to a great IBP process – you can easily obtain either the full or modular IBP technology platform that meets the need of your particular business and its current stage of evolution.
The technology solutions you implement will only have maximum impact if you also get that cultural shift right. The one team thinking and commitment to one number (or range of numbers) that IBP requires may not come easily. It sounds simple in theory but is hard to do.
'Building back better’
With so much to gain from robust and realistic IBP, supply chain leaders should really be pushing to embed an IBP approach in their organisations. As your business ‘builds back better’ post-COVID, it’s a golden time to get this key enabler in place.
My recommendations to Heads of Supply Chain are:
- Collaborate, collaborate, collaborate – IBP is really a people & change piece rather than just a technical exercise
- Act as the enablers – you own the ERP and the data entry, so leverage that to facilitate the process
- Think of the end goal – ultimately, IBP is about superior business performance, not just functional performance, so encourage everyone to take a big picture view