Integrated Business Planning A 10% вЂ“ 20% improvement in IBP operational performance areas could result in a 2% вЂ“ 5%2 improvement in profitability, 1 вЂњTransforming planning into a decisive competitive advantageвЂќ TodayвЂ™s global business environment is made up of a constantly evolving customer base that is becoming more complex with globalization and the new economic order. Firms are seeking greater margins through sophisticated products and operational excellence that is well aligned with strategic goals. These challenges are straining already stretched operational environments, which need to transform to be able to support the rapidly changing market place. While tactics for meeting these challenging market conditions are often focused on cost reduction initiatives, these measures are short-term fixes for long-term issues. In order to be successful, companies must focus on the strategic steps that can deliver sustainableВ operational improvement. Propelling the traditional sales & operations planning process from short-term demand and supply balancing to planning that actively includes finance and product development that aligns with strategic goals. Integrated Business Planning An Integrated Business Planning (IBP) approach enables companies to align itsВ business with a holistic lens toward accurate and reliable long-term strategic planning. IBP provides a structure to integrate Finance, Operations Product Lifecycle Management (PLM), Sales and Process Marketing, and translate Integration & Collaboration business drivers into desiredВ outcomes End-to-End through a Plan вЂ“ Execute Governance Supply Chain вЂ“ Compare вЂ“ Visibility Adjust framework (PECA) that aligns IBP strategy, design, and execution. Further, IBP helps strengthen Reference Reporting and Architecture customer relationships Analytics by providing better visibility to customer Change needs and improving Management customer service with on-time delivery and lower cost of service. Key services KPMG offers a variety of services for IBP that help businesses establish leading capabilities in supply chain visibility, process integration, and collaboration to meet todayвЂ™s business planning needs. These include: вЂў Enabling Supply Chain Visibility вЂ“ providing real-time data availability across transactional and planning platforms for greater decision-making вЂў Enabling Process Integration & Collaboration вЂ“integrating multi-function planning processes and providing a collaboration platform for both internal teams and externalВ partners вЂў Reporting and Analytics вЂ“ optimizing the supply chain through advanced analytics and risk management вЂў Governance вЂ“ managing and controlling a wide range of operating models, coordinating and balancing decision-making globally vs. locally вЂў Reference Architecture вЂ“ shifting from a siloed function, data and systems to managing business with analytics вЂў Change Management вЂ“ enabling change management of people, process, and technology as you progress through the IBP maturity model 1, 2 Integrated Business Planning Figures are based on client experiences В© 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 (вЂњKPMGВ InternationalвЂќ), a Swiss entity. All rights reserved. The KPMG name, logo and вЂњcutting through complexityвЂќ are registered trademarks or trademarks of KPMGВ International. NDPPS 203548 End-to-End, Cross-Enterprise Supply Chain Visibility IBP is capable of providing visibility across the entire supply chain network. A complete view of current activity and future plans from inbound supply and outbound fulfillment activity across supply chain network. Supply & Inventory Visibility Financial Visibility Demand Visibility вЂў вЂў вЂў вЂў вЂў вЂў Profits and margins вЂўPricing вЂў Working capital вЂў Cash flow вЂў Asset management вЂўCustomers вЂў Sales & Marketing вЂў Point of sales, Promotion plans вЂў Product lifecycle; New Product Introduction (NPI): End of LifecycleВ (EOL) Real-time inventory across the globe Supply-demand disconnects Collaborative planning (multitiers) Production capability Transportation and logistics IBP Principles IBP principle #2: IBP principle #1: An IBP strategy must harmonize financial and operational processes to customer demand. вЂў Maximize revenue whileВ minimizing operatingВ expense. вЂў Improve customer service. Demand $ Recovery Supply Lost Opportunity & Shareholder $ Value An IBP strategy must enable an organizationВ to optimally collaborate and address critical,В cross-functional business decisions across a productвЂ™s lifecycle. вЂў Collaborate with global and local operation to address market needs demand shifts. PLM Recession 2007 2008 2009 Time 2010 2011 IBP principle #3: IBP principle #4: An IBP strategy must create cross-functional alignment and integration of planning and execution processes to ensure optimal business performance. Continuously strive for holistic performance improvement through effective change management strategies utilizing IBP processes, governance, and rolesВ & responsibilities. вЂў Align operational planning andВ execution to strategic corporateВ objectives. вЂў Use IBP model as a tool, process, and governance to move toward supply chain and operations excellence. вЂў Leverage greater utilization of information for scenario management analytics, and reporting. 5 Questions to ask Level4 Level3 Driving Accountability Decision Planning Level2 Organizational Planning Level1 Global Planning The KPMG difference How can I avoid being constantly surprised for not meeting 1 customer demand? How do I increase revenue of my business while cutting supply 2 chain costs? 3 How do I reduce my inventory cost while improving customer service? 4 How do I make my operations more transparent and efficient? How do I plan for risks in the face of opportunities while meeting 5 my organizationвЂ™s financial goals and increase shareholderвЂ™s value? Our competencies bridge the disciplines of finance, technology, and operations to offer broad business perspective with deep functional and process skills to understand and address your challenges. As a Big Four accounting and auditing firm, we have a century of experience in accounting, tax, regulatory issues, transaction services, forensics, compliance, and financial risk. With KPMG member firms in 144 countries, we have global breadth and local-market knowledge of business conditions, and legal and regulatory requirements to help you work toward your organizationвЂ™s long term goals. Contact Kevin OвЂ™Laughlin Principal Boston T: 617-988-1124 E: [email protected] kpmg.com Frank Kang Managing Director McLean, VA. T: 703-286-8668 E: [email protected] Peter Yu Director Chicago T: 312-665-1397 E: [email protected] В© 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 (вЂњKPMG InternationalвЂќ), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and вЂњcutting through complexityвЂќ are registered trademarks or trademarks of KPMGВ International. NDPPS 203548