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FC Company Integrated Business Planning (IBP) journey – Part 5
18 September 2019
By Liam Harrington and Anne Marie Kilkenny, Associates at Oliver Wight
We completed the design workshops in June – feels like a long time ago now! In the last blog we talked about the Management Business Review, the Product & Portfolio and the Demand design workshops. In this blog, to complete the picture, we’ll pick out some key points from the remaining design workshops.
The 4th design workshop was looking at the Supply Chain process and design within the context of Integrated Business Planning. Frank Wouters (EVP Supply Chain) is the owner of this workstream and – as with all of the others, the design team is cross-functional. We have been doing this for many years but are still surprised at how little is understood about the workings of the Supply Chain by the people who don’t work directly in it and in some cases even by people who do.
It has to be said the workshop got off to a bit of a bumpy start with quite pronounced finger-pointing between Sales, Manufacturing, and Logistics. It took a couple of interventions to agree that we were all on the same side and the whole point of the program was to address some of these issues. The next challenge was to move the team away from short term thinking and to reflect on the strategic considerations for the Supply Chain given the objectives laid out by Sara and the rest of the Exec team. It really helped that Frank was able to confirm that an additional workstream will be created to focus on addressing the short-term execution of the longer-term IBP plans. After a difficult first morning, it has to be said the team then really focussed on the design activities and produced some great quality output, including some excellent builds on the Portfolio planning process to de-risk some of the testing and launch activities. Several significant opportunities for lead time reduction/planned agility were identified through the end to end discussions in the group.
Then we got to the workshop for Integrated Reconciliation. This can be a challenge for participants as it is often the piece that is least familiar, plus they are trying to pull together the whole process – and sort out the calendar for the IBP process, which is never a straightforward task! We had a super experience in this workshop. Alexandra Meijer, the CFO, is the owner of the Integrated Reconciliation workstream and is working closely with Dirk Corbijn who has been appointed Global IBP Lead. Alex did an excellent job of setting out expectations – and the bar was high – but then allowing the team to develop their ideas. The challenges are clear – and have become more so with each workshop, but the energy, commitment, and focus was incredible.
One key challenge is to finalise the framework for FC’s IBP process. In a larger organisation with a Matrix structure, the temptation can be to overcomplicate the process and the structure. We have done work on this at each event. The IR team unpicked some of the additional meetings that had been added in in the Supply Design. FC has developed a habit over many years of adding in meetings in an attempt to address issues and behaviours, rather than fixing the root cause. An effective IBP process should reduce or remove the need for many of these meetings – especially those that people go to ‘find things out’. The logic for the simplified framework was sound, but Dirk is not looking forward to having the conversation with Frank about killing some of his meetings!
Another challenge in this workshop was to get everyone in the team comfortable with having integrated financials throughout IBP. Some were still stuck in the paradigm of the process being all about volume and then a final (and offline) ‘cash up’ at the end. This was one topic where Alex did intervene and she made it very clear that IBP would be the source of the Budget and any Rolling Forecasts (Latest Estimates) – there would not be additional stand-alone processes for these. By starting with that premise and worked back, they identified what would need to change in order to get there. The answer does involve significant change but, as the team agreed, mostly in the way people think and the level of detail they ask for.
All of the teams have lengthy action lists to work on. They have decided to set Tuesday as ‘Class A day’ when they will progress their activities. We will be checking back in with them in a couple of weeks. We are really excited because the level of engagement has been so high, but we also recognise that the task ahead is challenging in terms of both time and difficulty. We have counselled the teams to maintain a sense of urgency but balance that with realism when mapping out delivery dates for their activities. Looking forward to seeing their progress as our next visit!