IBP, Integrated Business Planning, the most wanted yet unwelcome process ever devised! In most circumstances, IBP enters the enterprise to resolve issues associated with supply and demand; demand plan bias, poor service levels, excessive inventory.
In reality, many issues of supply are the manifestation of decisions made elsewhere in the business well before manufacturing and distribution are called upon. Ironically, it’s arguable the challenges thrust upon manufacturing and distribution by the broader business consume every ounce of resource, in doing so prevent Supply identifying and addressing deficiencies in their own operational capabilities.
So here’s where the promises of IBP improving operational performance fall down; IBP, perceived as a supply chain process has little to no chance of improving operational performance because the same issues cause demand plan bias, poor service, and high inventory keep coming.
IBP is not the silver bullet that magically resolves deficient or missing foundational capabilities. The folly is while manufacturing and distribution are dealing with the daily uncertainty and volatility they have little or no time nor appetite for IBP.
To make an immediate impression IBP has to be owned and driven by the business with the overarching intent of reducing or eliminating the volatility reaching manufacturing and distribution. This is particularly relevant for enterprises utilizing a centralized shared service structure that owns both demand management (short term demand planning) and supply orchestration. Supply and demand play ping-pong with excuses justifying operational performance while IBP is left attempting to make sense of events.
