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AllBusiness: How Integrated Business Planning Can Relieve Your Supply Chain Pains

By: Mark Levine, president of Epic Pivot and leader of the strategic analysis team.

Experts have spoken and their message is abundantly clear: if you’re a business that is looking for relief from supply chain pains, you have at least another year left of discomfort.

While researchers at J.P. Morgan recently observed that the COVID-19 pandemic provided the “perfect storm” of logistical problems for businesses, the pandemic isn’t entirely to blame for what the global economy is experiencing. Many companies, not necessarily through faults of their own, would have been caught off guard by any crisis that came their way due to long-standing structural and operational issues that the coronavirus crisis laid bare.

Accelerated consumer demand, combined with a more fluid post-COVID labor market, compounded many of these issues.

With integrated business planning (IBP), companies can perform a two-to-three year assessment of challenges on the horizon, develop and synthesize their strategic plans, and take a bird’s-eye view of inventory, resources, and the company’s financial condition. If the process is unfamiliar to you, there are a few ways to get started.

Understand your exact place in the supply chain

Asking business owners to reflect on the industries they’re in and their role in the local economy may feel a bit like someone asking to confirm what color their eyes are. But what the question really means is if certain dominoes in the supply chain fall, how will this impact your operations? What would need to change to allow your business to adapt? And what characteristics about your business are likely to be strengths during hard times?

As a leader, you will need to have a firm grasp of how your enterprise will overcome geographical challenges to selling products and services. If another COVID-scale crisis were to occur, and there really was no way to continue current sales activities, consider what alternatives you would need to build—and start doing so now, before things get to crisis level.

Lastly, what is your definition of success? Most people define this as meeting budgeted sales and profit goals. But success might also mean opening a new office or location, achieving sales targets in a specific market, or growing staff to make your business more responsive to demand.

Be prepared for the next “big one”

In California, Japan, and other earthquake-prone places, the process of seismic retrofitting braces structures for the impact of tremors, with some designs enabling a building to withstand even violent earthquakes. This is a good visual for preparing a business for shocks—sudden or otherwise.

Many companies are still reeling from the financial impact of the pandemic. Their capital reserves may be minimal and they also may be holding off making big investments.

Quantify what you need to accomplish and hold yourself and your team accountable. This means making goal-oriented statements, such as “We need to achieve X by Y, because Z,” with the word “need” being immovable and absolute. To make this work, keep the number of non-negotiable ambitions small, and once you pick them, don’t budge unless you have to.

Integrated business planning means setting time targets as well, particularly when key performance indicators conflict with each other. What is more of a priority—A or B? What are the consequences for not achieving B according to your schedule? Can these be managed or do they need to be mitigated ahead of time?

Examine the maturity level of your company

What are the processes for decision-making, particularly in a crisis? How long has it taken to reach a conclusion at the various stages or inflection points in the company’s history? During the integrated business planning process, consider how these can be shortened and made more efficient.

Additionally, think about how you handled the last crisis that came your way, what went wrong and which successes should be repeated. If you’re having difficulty brainstorming about lessons learned, this may be a sign to reach out to an unbiased set of eyes for an outside consultation on your business’s infrastructure, challenges, and growth potential.

And when it comes to essential long-term investments, like digitization, break up your goals into smaller, bite-sized pieces. If you cannot afford a big digital investment right now or an expensive infrastructure upgrade, pick the most important key performance indicator or set of indicators to optimize, and laser focus your investments on those. Turn to a provider or platform that integrates seamlessly with your existing systems, rather than layering on top of them, and with minimal training time required for your team members.

Integrated business planning allows your company to reset

A bleak slate of bad news on the surface provides plenty of opportunity for businesses to perform a strategic reset. Integrated business planning provides the most robust platform on which to do so, positioning you as the next resilient success story in spite of the shocks around you.

This article originally appeared in AllBusiness.


Posted on

November 10, 2022