The IBP blog

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pexels-photo-704767.jpegBusiness

Aligning Business Chaos with Integrated Business Planning

I have a business with a great product and tremendous opportunity with a great team, however I am concerned with our ability to achieve our aggressive growth targets. It seems like we have so many issues with just getting through the month on plan that I am concerned our longer-term goals just won’t happen.  Our current sales plans continue to decrease each month and yet supply chain backorders continue to increase.  My sales team is suggesting that revenue growth will turn around next quarter, but our supply chain continues to struggle with the current demand claiming that the forecast is…
Debbie Evans
May 31, 2023
Business

Monte Carlo Simulation in Supply Chain Management

Monte Carlo simulation is a statistical technique that involves generating random samples from probability distributions and using these samples to simulate a wide range of possible outcomes. In supply chain management, Monte Carlo simulation can be used to model various aspects of the supply chain, such as demand variability, lead times, and inventory levels. The following steps describe the Monte Carlo math in detail for supply chain management: Define probability distributions: The first step in Monte Carlo simulation is to define the probability distributions for the variables that are uncertain or variable. In supply chain management, these variables can include…
Sriram Parameswaran
May 7, 2023
BusinessIntegrated Business PlanningManagment

Outliers in Demand

Identifying outliers: The first step is to identify the outliers. This can be done manually or by using statistical methods. Some common methods for identifying outliers include: The interquartile range (IQR): The IQR is a measure of the spread of data. To calculate the IQR, first find the first and third quartiles of the data. The IQR is the difference between the third and first quartiles. Data points that are more than 1.5 times the IQR away from the nearest quartile are considered outliers. The z-score: The z-score is a measure of how far a data point is from the…
Sriram Parameswaran
May 3, 2023
Business

Integrated Business Planning for New Start-up businesses

Integrated Business Planning (IBP) is a comprehensive planning process that aligns business strategy with operational plans and financial forecasts. It is an essential tool for any business looking to achieve its goals and objectives. While IBP is often associated with established businesses, it can also benefit new start-up businesses. In this article, we will explore the benefits of integrated business planning for a new start-up business. Provides a framework for growth: IBP provides a framework for growth by aligning business strategy with operational plans and financial forecasts. This helps start-ups to identify areas of growth and to create a plan…
Debbie Evans
May 1, 2023
BusinessPlanning

Multi Echelon Inventory Optimization Models

Safety stock is a level of inventory that is held to protect against unexpected demand or delays in supply. It is an important part of inventory management, and it can help to prevent stockouts and lost sales. Multi-echelon inventory optimization is the process of determining the optimal level of safety stock to hold at each level of a supply chain. This can be a complex task, as it involves balancing the costs of carrying inventory with the costs of stockouts. There are a number of factors to consider when optimizing multi-echelon safety stock, including: The demand for the product The…
Sriram Parameswaran
May 1, 2023
BusinessPlanning

Why do machine learning algorithms need training data set before predictions?

Training data is a crucial component in the development of machine learning and data science algorithms. It serves as the foundation upon which models are built, and allows the algorithms to learn patterns, relationships, and rules that they can then use to make predictions or classify new data. In more technical terms, training data is used to train a machine learning model, which is essentially a mathematical function that maps input data to output data. During training, the algorithm iteratively adjusts the parameters of the model based on the input data and the desired output, so that it can make…
Sriram Parameswaran
April 26, 2023
pexels-photo-704767.jpegIntegrated Business Planning

IBP Challenges, no one wants to talk about

Integrated Business Planning (IBP) is a management process that aims to bring together different business functions to plan and execute an organization's strategies. IBP goes beyond traditional Sales and Operations Planning (S&OP) by including functions such as finance, marketing, and human resources in the planning process. While IBP can provide many benefits, such as increased visibility, better decision-making, and improved alignment, it also comes with several lesser-known challenges or rather taboo sensitive challenges that can make implementation difficult. Basic supply chain capability is lacking in any ability to execute the plan. There is a misconception that if you build it,…
Debbie Evans
April 24, 2023
Managment

Leadership Accountability

Supply chain leader and a market leader are sitting at a bar, looking somber and frustrated. Supply Chain Leader: "We need to figure out how to explain our nonperformance to leadership. Any ideas?" Market Leader: "Yeah, we need to come up with something convincing." The supply chain leader starts brainstorming, looking stressed. Supply Chain Leader: "Maybe we can say there were delays in the supply chain due to unforeseen circumstances?" Market Leader: "No, that won't work. We've already used that one before." The market leader takes a sip of their drink, looking pensive. Market Leader: "What about blaming it on…
Debbie Evans
April 9, 2023