Actividad 13: Business Communication

 Business Communication 

IBP VS S&OP

Actividad 13

What is “Integrated Business Planning” (IBP)? I really like this topic because I already heard about it before in one of my classes, I can define it as software that incorporates financial and operational data from an organization; It helps to maximize processes linking strategic plans with sales, operational, and financial plans and it helps to effective decision making. 

 

What is “Sales and Operations Planning” (S&OP)? It is a part of supply chain planning, which is used in the creation of a unified, consensus-based business plan. It draws input from an organization’s key functional areas, including sales, marketing, manufacturing, distribution, and finance. 

 

What are the similarities between IBP and S&OP? Mention and describe them.

S&OP and IBP processes have many parallels. They both need supporting data, they help align forecasts with capability and they guide senior management in their planning decisions.

 

What are the differences between IBP and S&OP? Mention and describe them. 

	S&OP	IBP
Objective	Volume oriented; demand and supply balancing.	Value-based delivery of financial business objectives
Focus	Internally focused	Extended to collaborate beyond the “4 walls”
Owner	Driven by the supply chain.	Sponsored by Exec Management and driven by the commercial or finance organization.
Features	Supply chain modeling and scenario planning.	Financial Impact analysis and planning including Risks and Opportunities evaluation.
Connectivity	Derives decisions with no or little “disaggregation/connection”	Boundaryless and connected to operational planning.

How does the IBP process work? Describe in detail.

• Gives the balance of the Supply and the Demand
• Encourages Proactive Decision Making
• Formalizes the Business Communication Processes
• Provides a better integration between different functions
• Enables a well-informed and unified ecosystem (from the supplier’s supplier to the customer’s customer).
• Is a key factor in meeting demand and agile response.
• Is the main integration layer of Total Value Optimization.
• Delivers the right product, place, time, quantity, cost, and business performance.
• Offers stability, support, and motivation to realize real benefits.

 

What are the challenges of IBP? 

• Attract major customers and suppliers
• Model finances in an agreed-upon way of handling complexity: discounts, discounts, exchange rates, pricing, etc…
• Consider business goals: market share/growth, channels, impact
• Business language (EBIT, revenue, cost, margin) instead of supply chain KPI (OTIF, DOH, CTS)
• Change the focus from 1 number plan to managing risks and opportunities
• Include project management to maximize the business impact of new product introduction (NPI)
• From data to insights

 

Which are the most common difficulties/problems when implementing IBP? Mention them and provide examples.  

• Software Updates: You need to adapt to the software. 
• Loss of Control of Software and Services: Every movement realized in the software would not be erased. 
• Security: The movements are going to be registered, every movement so there is no time for mistakes. 
• Master Data Replication and the Batch Schedule
• Integration: Every part of the company is going to be integrated into the same software so you need to understand as much as you can how it works. 
• Lack of Customisation
• It is very expensive 

 

What are the advantages and disadvantages of IBP? 

Advantages: 

IBP provides the company with a reliable rolling forecast and strategy status.

Disadvantages: 

IBP/S&OP systems cross organizational boundaries – that is, their strength but also their vulnerability.

 

What is the importance of IBP nowadays?

A company needs to be interconnected nowadays because that is how it is easier to make decisions as soon as possible and the better ones for the company; It is technology implementation and that is one of the most important things because companies need to be modernized. So I found IBP necessary.