Integrated Business Planning (IBP) is a strategic planning methodology enabling end-to-end business planning through a cyclic process that includes a review of demand, new product development, supply and financial plans.
IBP enables business leaders to understand whether their plans will be able to fulfil the customer’s requirements or not; if not, then their options around fulfilment.
Efficient planning requires examination of various possibilities and scenarios to model different outcomes; for which, ‘what if’ analysis and scenario planning plays a significant role. Scenario planning refers to creating plans for the possible deviations from the main plan. The outcomes of scenario planning can be represented as models that visually explain the alternative solutions.
Scenario Planning and Modelling in IBP can be implemented through the following 5 steps.
- Objective: setting an objective is an important first step within the process, to identify demand in local and global markets by understanding how plant and supply chain partners will coordinate to meet the desired demand. This helps in decision making for the future forecast.
- Planning: it identifies gap and searches alternatives for the mismatch, before getting delivered to the customers. It is a process of designing a failproof method with an aggregated, optimised demand and supply plan.
- Collaborate: during collaboration, strong alignment between local and global markets including customers and suppliers is developed. Active collaboration with key stakeholders helps in both – the demand plan and supply forecast across the organisation and beyond.
- Integrate: this is the process which brings all the elements of an organisation into a single optimised plan. Process discipline is necessary for integration.
- Co-ordinate: this is the process of implementing an integrated plan and adopting the changes in the business that gives room for improvements. It is where we can see that plan which was made earlier was insufficient and there is a need for optimisation. By the end of this step, we can have a plan that can accommodate sudden and short-term fluctuations in demand.
IBP is not a short or one-time process; it takes time and should be simple. There is no hard and fast rule for doing it. You should just synchronise all the elements in a way that gives the best result.