New Year, New Approach: Take Your Integrated...

New Year, New Approach:

Take Your Integrated Business Planning Processes to the Next LevelProcesses to the Next Level in 2014

January 28 2014 Steelwedge WebinarJanuary 28, 2014 Steelwedge Webinar

kpmg.com

KPMG Presenters: Frank Kang and Peter Yu

BackgroundFrank, a managing director in KPMG Advisory Services, has 21 years experience in supply chain transformation consulting experience in the Electronics, Consumer Packaged Goods, Retail Industrial Products and Telecommunications Industries He leads KPMG’s offering inRetail, Industrial Products, and Telecommunications Industries. He leads KPMG s offering in integrated business planning, inventory optimization and supply chain analytics.. Frank has extensive experience working with multinational firms attempting to achieve greater supply chain integration into emerging markets. He has been a speaker at numerous global conferences focusing on supply chain strategy, planning, visibility, analytics and sustainability. Prior to KPMG, Frank was with IBM GBS, PwC Consulting and Booz Allen &

Frank KangManaging Director, Supply Chain and O ti Ad i S i sustainability. Prior to KPMG, Frank was with IBM GBS, PwC Consulting and Booz Allen &

Hamilton.Frank holds graduate and undergraduate degrees in Operations Research from Cornell University.

Operations Advisory Services

KPMG LLP, Washington, DC area office

Tel [email protected]

BackgroundgPeter, a director in KPMG Advisory Services, has 15 years experience in supply chain transformation consulting experience in the Hi-Tech, Consumer Packaged Goods, Retail, Industrial Products, and Automotive Industries. He has expertise in Integrated Business Planning (IBP/S&OP) process improvements, and currently one of the leading members of IBP/S&OP offerings at KPMG.

Peter J. YuDirector, Supply Chain & Operations Advisory Services

Peter also has a strong background in global supply chain processes and systems management with a focus on advanced supply chain planning (Global Demand, Supply, Inventory, Capacity Planning) across number of industries improving their operations and business performance. Peter holds graduate and undergraduate degrees in Industrial & Operations Engineering and

© 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 161986

1

KPMG LLP, Chicago, Office

Tel [email protected]

Peter holds graduate and undergraduate degrees in Industrial & Operations Engineering and Computer Science from the University of Michigan, Ann Arbor.


KPMG Advisory Overview

U.S. Advisory Approximately 7,000

dedicated professionals

Asia Pacific

Over 5,000 dedicated professionals

Americas

Over 7,000 dedicated professionals

490 partners/MDs

10 service lines

35 service networks

EMEA

Over 20,000 dedicated professionals professionals

More than 30,000 talented professionals across a worldwide network – Wherever our clients need us

professionals professionals

100+ global methods and toolkits to bring knowledge of the firm to each client

Advisory areas:

Management Consulting

Risk & ComplianceAnd we offer clients the benefit of working with a professional services firm that draws upon the skills and experience of 140,000 audit, tax,


2

Transactions & Restructuring and business advisory colleagues across 146 countries.


Agenda

Questions to address when evaluating the effectiveness of your planning processes and deciding where and how to start on an effective IBP journey

Leading IBP Operating Model capabilities

The opportunities offered by the right technology to continuously improve your business planning processes

Q&A


3© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 161986

IBP questions we will address throughout this webinar

1) What is IBP and how is it different than S&OP?1) What is IBP and how is it different than S&OP?

2) How do you start an IBP transformation journey? What are some key considerations when embarking on an y gIBP initiative?

3) Who should own the IBP process?

4) What are the leading capabilities firms need to drive an effective IBP process?

5) How can you assess your current IBP maturity level?



IBP v. Traditional S&OP

Business Strategy Scenarios Finance

Executive IBP

Primary Focus of Traditional S&OP

Demand Supply

Development: Products/ Services

Customer Collaboration

Supplier Collaboration


5

Products/ ServicesCollaboration Collaboration


Challenges with business planning

The current globalization of the supply chain, heightened competition, and increased customer requirements have hindered business performance using traditional planning process:

Issues Characteristics Representative KPI ImpactsIssues Characteristics Representative KPI Impacts

Unreliable financial forecasts as they are often not based on accurate profitability analysis.

Misalignment/Disconnect between financial planand operational plan due to the lack of consistent

ll b ti ith l & k ti l h i d

■ Financial forecast and operations plan misalignment

■ Difficult to understand where the gap is

■ Financial forecast accuracy

■ Overall financial performance

collaboration with sales & marketing, supply chain, and finance

Delayed New Product Introduction (NPI) and End-of-Life (EOL) due to lack of integration into Demand & Supply Planning and Execution

■ Unable to meet market demands fast enough

■ Unable to plan and control EOL product

■ Customer Service

■ Inventory

■ Revenueinventory ■ Revenue

Poor sales & marketing promotion planning effectiveness due to lack of integration into demand planning, inventory execution, and budget allocation

■ Unclear benefit of promotions

■ Negative impact on materials planning

■ Promotion ROI

■ Revenue/Cost

Lack of visibility on critical and chronic supply issues ■ On-going critical shortages ■ Customer Servicey pp y(supplier’s repeated de-commits, no dual-sourcing strategy)

g g g

■ Unclear n-tier supplier issues ■ Revenue/Cost

Business units and functional areas with their own agendas therefore organization have difficulties aligning the operations

■ Unaligned business targets

■ Difficult to achieve strategic objectives

■ Revenue/Cost

■ Customer Service



IBP principle #1: An IBP strategy must harmonize financial andoperational processes to customer demand

Harmonize the Planning Process: Right product, right place, right time, right price at the right cost Maximize revenue while simultaneously minimizing operating expense and investment

Improve customer servicep

Capture market share

Collaborate with global and local operations to address market needs Demand shifts

– Supply changes

– Promotions– Promotions

– NPI

– EOL

“Hug the Demand Curve”

Illustrative

Demand

SupplyRecovery

Lost Opportunity & Shareholder

$

$

Hug the Demand Curve

2005 2007 2009 2011 2013Time

Recession

& ShareholderValue

$



IBP principle #2: An IBP strategy must enable an organization tooptimally collaborate and address critical, cross-functional business decisions across a product’s lifecycle

Supply Chain How can we source

Sales & Marketing What is the forecasted How can we source,

produce, and deliver products on-time?

How can operations achieve greater scalability and cost reduction?

What is the forecasted demand and can it be fulfilled?

What is the achievable customer service based on sales strategies andand cost reduction? sales strategies and fulfillment capabilities?

PLM

Product Development How is the product aligned

to customer need?

How can we consistently

Finance Is the product achieving

profitability targets?

How can we achieve

PLM

How can we consistently achieve on-time product launches?

How can we achieve greater financial forecast accuracy?



IBP principle #3: An IBP strategy must create cross-functional alignmentand integration of planning and execution processes to ensure optimal business performance

Align operational planning and execution to strategic corporate objectives

Integrate the executive team, finance, sales & marketing, supply chain, and product development to drive real cost reduction and customer service excellence

– Reduction of operating expenses & inventoryy

– Increased on-time delivery of products and services

– Improvement in budgeting and costing accuracy

Leverages greater utilization of information for scenario management, analytics, and


9

reporting


Agenda

Questions to address when evaluating the effectiveness of your planning processes and deciding where and how to start on an effective IBP journey

Leading IBP Operating Model capabilities

The opportunities offered by the right technology to continuously improve your business planning processes

Q&A



KPMG’s recommended Integrated Business Planning (IBP) operating model

KPMG’s IBP Operating Model balances demand and supply, integrating product lifecycle and financial goals, with key enabling processes and capabilities that support the operating model

Business Process

Finance

Business Integration and

Strategy

Process Integration & Collaboration

Finance

Financials

Governance and Compliance

Planning and Optimization

Operations Sales and MarketingSuppliers CustomersSupply Demand

Products

Balance

Change Analytics and

Product Lifecycle

Technology E bl t d

End-to-End Supply Chain

gManagement

yReporting


11

Enablement and Infrastructure

Supply Chain Visibility


IBP operating model establishes leading capabilities across the planning process to meet the needs of today’s corporations

IBP Capability Categories DescriptionLeading Capabilities

Improved ability to use business drivers in planning collaboration and execution is Business Integration &

Integrated Planning Activities

Improved ability to use business drivers in planning, collaboration, and execution is achieved

By integrating process across finance and operations, greater cross-functional collaboration and functional alignment can be achieved to drive improve business performance

Process Integration & Collaboration

Business Integration & Strategy

Manage and control the IBP operating model, coordinate and balance decision-making globally vs. regionally vs. locally

Continuous process improvement is essential to successful integrated business transformation with demand planning, supply, product management and finance

Governance & Compliance

Change Management

Process Governance and Continuous Improvement

Increased Planning Visibility

Robust technology that enables integrated business planning process with real-time information visibility regardless of IT platform configuration

End-to-End Supply chain Visibility

Technology Enablement & IntegrationIntegration

Optimized Business Decisions Through

IBP optimization across financial, operational, tactical, and strategic plans through advanced analytics for increased effectiveness, standardization and consistency Planning Optimization


12

Analytics Enables ‘single version of the truth’ of the extended supply chain by providing actionable real-time data across finance, transactional and planning platforms Analytics & Reporting


End-to-end, cross enterprise financial and operational visibility is an important enabler of IBP

IBP is capable of providing visibility across the entire supply chain network. A complete view of current activity and future plan from inbound supply and outbound fulfillment activity across supply chain network

Profits and margins

Pricing

Customers

Sales & Marketing

Demand VisibilitySupply & Inventory Visibility Financial Visibility

Real time inventory across the globe

Supply demand disconnects

Profits and margins

Pricing Working capital

Cash flow

Point of sales

Promotion plans

Product lifecycle: NPI and EOL

Supply-demand disconnects

Collaborative planning (multi-tiers)

Production / Capacity capability

Transportation and logistics

Working capital

Cash flow

Asset Management



IBP reference architecture is an integrated and agile process enabled through technology advances

Demand Supply

Consensus Constrained

IBP ProcessesExecutive

Consensus Demand

Constrained Supply Executive Review

IBP Technology Enablement

Integrated Business PlanningDemand, Supply & Financial IntegrationEnablement , pp y g

Demand, Supply &

Finance Data

Forecasting, Demand Plan,

ERP, CRM, ExcelSCM, ERP

Point Solution Technology

Business Intelligence, Data

Warehouse

Demand Products & Customers

Supply Products & Suppliers

Data Revenue, Units




The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

New Year, New Approach: Take Your Integrated...

Documents

Transcript of New Year, New Approach: Take Your Integrated...