Achieve seamless supply chain integration with “One Plan”

In today’s fast-paced business environment, companies often struggle to make supply chain decisions that align with their strategic business goals, financial targets, and operational needs. A siloed approach to supply chain management leads to misalignment and inefficiencies that hinder performance and agility. Our expertise in implementing “One Plan” is rooted in a deep understanding of Integrated Business Planning (IBP). This allows us to transform fragmented approaches into a cohesive, integrated planning process. “One Plan” is essential because it leverages shared data and fosters interdepartmental collaboration, ensuring effective supply-demand balancing and the achievement of shared business goals.

Balancing supply capacity with demand is a complex and ongoing challenge for many organizations. As soon as strategic business goals and financial targets are taken into consideration, the complexity increases exponentially. Decision-makers find themselves navigating a labyrinth of conflicting priorities and fragmented information, often leading to suboptimal outcomes and inefficiencies. This misalignment results in increased costs, reduced service levels, and a lack of agility, ultimately affecting the company’s competitive edge.

The challenge arises from a gap between the strategic and operational planning levels. To bridge this gap, we focus on harmonizing the planning framework and introducing a tactical level. This approach enables high-level capacity planning, aligns resources with market demands, and translates strategic objectives into actionable operational goals. It also ensures effective monitoring and adherence to plans, creating a cohesive structure that supports overall long-term organizational success. This is what we call “One Plan”.

One Plan is a framework, where all planning processes in a company are harmonized and have clear interfaces. Tactical capacity planning is used to link strategy with operations. It aligns available resources with market requirements, helps to identify and eliminate big bottlenecks at an early stage. The tactical layer in such framework can be a rolling planning process such as S&OP (Sales & Operations Planning), SIOP (Sales, Inventory, and Operations Planning) or IBP.

Let’s dive deeper into IBP, as an example of an advanced tactical planning.

To capture the essence of IBP, we will start with a definition by the Association of Supply Chain Management (ASCM):

“IBP focuses on ensuring continuous alignment among demand, inventory, supply and manufacturing plans on the one hand, and between the tactical and strategic business plans on the other, in an effort to maximize operational performance and meet financial objectives.”[1]

IBP breaks organizational silos and integrates planning activities of stakeholders from sales, inventory, marketing, purchasing, production and finance functions into a monthly cycle. This framework leverages common data sources, promotes cross-functional collaboration and continuous process improvement to optimize performance, enhance decision-making, and ensure tactical alignment.

The IBP process involves four key steps that enable seamless collaboration and decision-making. Demand Planning forecasts customer needs, ensuring alignment with market trends. Supply Planning assesses the capacities of purchasing, production, logistics, and inventory to meet demand. In the Balancing & Decisions phase, insights from demand and supply help the optimization of resource allocation and bottlenecks resolution. Lastly, Commitment & Communication aligns and engages stakeholders, fostering accountability and transparency. Together, these steps create a cohesive planning process that drives operational efficiency and strategic alignment.

In our projects we help our clients to identify which tactical planning concept fits them best: S&OP, IBP or other. Together, we define the target level of planning maturity. Based on that we set the planning scope, select key stakeholders and derive required information. The planning concept, identified in the first step, is then adapted to meet specific business requirements, enabling organizations to tailor their planning efforts effectively.

“One Plan” is designed to enhance collaboration and streamline communication between key departments within an organization. All stakeholders work with the same set of numbers. By doing so, it addresses the core issues of misalignment and inefficiency in the supply chain. Here’s how “One Plan” enhances your supply chain management:

Enhanced collaboration
“One Plan” creates a collaborative environment where sales, operations, finance, procurement, and logistics align on common goals. Shared data sources enhance transparency and reduce risks of misunderstandings. Clear communication is essential for supply chain integration, and we emphasize the importance of the personalities driving “One Plan”. For example, good supply chain leaders should be effective storytellers, able to communicate complex SCM topics to executives. At the operational level the ability to understand the interests, pain points and goals of other functions’ is crucial.

Improved service levels
By having a clear understanding of customer needs and operational capabilities, businesses can deliver products and services more efficiently. With “One Plan”, companies achieve a better balance between supply and demand, leading to fewer stock-outs, more reliable delivery performance and reduced firefighting in customer service. This not only enhances customer satisfaction but also builds a stronger, more reliable brand.

Reduced costs
One of the significant benefits of “One Plan” is its ability to improve forecast accuracy which is a key success factor for costs optimization. By eliminating inefficiencies and optimizing redundancies, companies can streamline their operational activities and optimize resource utilization. This not only reduces supply chain costs by optimizing inventory levels. The resulting cost savings can be invested into other strategic areas of the business.

Increased agility
Agility is a critical competitive advantage today. “One Plan” injects agility into the supply chain by enabling quick decision-making in bottleneck situations. This agility allows companies to adapt to market changes and unforeseen disruptions more effectively, capitalising opportunities where competition fails to deliver.

Our approach at TenglerConsulting to implementing “One Plan” addresses the challenges of supply chain management by promoting integrated business planning and fostering collaboration across departments. Drawing on our expertise and experience, we assist organizations in utilizing shared data sources to synchronize sales, operations, finance, procurement, and logistics, facilitating effective supply-demand balancing and the realization of shared business goals. We achieve remarkable success in making industry-leading companies more efficient, agile, and sustainable through the implementation of “One Plan.” This makes TenglerConsulting a trusted partner in this field.

Source:
[1] ASCM, 2024: “Making the case for integrated business planning” [Accessed: 07 October 2024].