By Rod Hozack, Partner at Oliver Wight Asia Pacific
There has been an enormous amount of literature published about Sales and Operations Planning (S&OP) and, more recently, Integrated Business Planning, espousing their benefits and the need for a formal monthly decision-making process in all businesses. However, very little has been published on “the engine room” that makes it possible for the executive to focus on the longer term. Unless plans are properly managed and coordinated, most S&OP and IBP processes end up stuck in the short term (one to three months), along with senior managers, who get dragged into firefighting. This is where Integrated Tactical Planning (ITP) can help.
What is Integrated Tactical Planning?
ITP is an essential “cog” in fully realizing the power of integration. It is a tightly orchestrated, weekly, and daily set of processes designed to manage, as efficiently as possible, the execution of the monthly Integrated Business Planning plans. The successful deployment of ITP will define and calm the process of management and communication in the execution window, bridging the divide between the various functions within the organization and, ultimately, leading to improvements in customer service, inventory levels, and other key metrics.
Businesses should consider Integrated Tactical Planning if:
- Their IBP process is stuck in the short term.
- Regular crisis and emergency meetings consume senior managers’ time.
- There is an intense focus on delivering this month’s numbers.
- There is a culture of not following the plan because customer requirements ‘keep changing.’
- Customer delivery performance is less than 90% on time.
- Inventory seems to have a life of its own.
- Everyone seems to have a view of the future, but there is no ‘single source of the truth.’
- Purchasing is making “best guesses” on long lead-time items – often with costly errors.
- Everyone is blaming inaccurate forecasting as ‘the problem.’
- There have been many initiatives to fix ‘the problem’, but results seem to slide back once the ‘project’ is completed.
One of the most common reasons these symptoms occur, even in companies who have deployed an IBP process, is that IBP is seen as the panacea for all planning and execution problems – but it is not. IBP cannot work in isolation; the process requires ITP to ensure business plans are executed which, in turn, will allow senior managers to spend their time on longer-term decision making.
Part 2 of our ITP blog series will look at the foundation of effective ITP and how to implement the process through time fences.