In an environment of financial pressures, political instability, increased competition, and changing customer needs, the requirement for Consumer Goods companies (CGs) to take control of and maximize the effectiveness of their resources has never been greater.
One of the most effective ways to do this is to implement an Integrated Business Planning (IBP) operating model. IBP is typically aimed to:
- Link all elements of the supply chain
- Increase the accuracy and horizon of the demand plan, including supply chain constraints and associated mitigations
- Apply financial inputs to an agreed volume plan to allow a full commercial outlook to be created and assessed
Benefits of implementing such a framework for Management and C-Suite are both tactical and strategic. The IBP business case is typically built around the following areas:
- Increased visibility and clarity around the direction of the business and the sufficiency of the customer demand
- More effective decisions around resource management, inventory, and cash flow
- Improved longer-term decisions influencing capital investments, strategic sourcing, and brand strategy
By providing a single collaborative plan that all areas of the business buy into, direction and deliverables become clearer to those tasked with achieving them.
Sales performance and supply chain complexities become contextualized and allow prioritization and resolutions to crystalize, and the effectiveness and implementation of the company goals and strategy can be measured and assessed in a clear and concise way against the long-term financial forecast.
So, it’s clear to see the competitive advantage that IBP can deliver for CG businesses but, how best can organizations implement and start to see some instant benefits?
Well, one of the key enablers is the use of technology.
Based on our experience there are two different models that are typically applicable to distinct size and growth stage of a CG organization: growing brands and established brands.
A simple IBP framework that facilitates collaboration across Sales, Finance, and Supply can be achieved by adopting the BluePlanner TPM
For more sophisticated organizations with an existing Demand Planning solution in place, a common scenario is the connection of the supply chain forecast with the BluePlanner IBP module which can provide Sales with a flexible platform (typically the same used to manage Trade Plans) to model their input into the IBP process. This can be translated into a number of positive or negative building blocks associated with several factors such as distribution, rate of sale, NPDs, and competitors’ activities. All of this information is also consolidated into powerful visual analytics that help increase adoption and support S&OP and IBP meetings through one single access point.
In conclusion, the implementation of an IBP operating model in today’s fast-moving and challenging business environment can help firms make the best use of the resources available to them to grow and remain successful in the short, medium, and long terms. With the help of effective technologies such as the Blueplanner system from UpClear, a sole source of truth can be created to align goals, organize resources and mitigate risks faster and more accurately than ever before.
UpClear makes software used by Consumer Goods brands to improve the management of sales & trade spending. Its BluePlanner platform is an integrated solution supporting Trade Promotion Management, Trade Promotion Optimization, Integrated Business Planning, and Revenue Growth Management.