Advanced Operating Models
Sep 18, 2015

Integrated planning in high tech: Some leading planning practices for high tech

September 18, 2015 -

Leading planning practices for high tech
This is the second in our three-part series about integrated planning in high tech. This part of the blog series, provides our point of view on some of the leading practices in Integrated Planning. In the first blog, we focused on integrated planning challenges in high tech industry.

Process:

  • A matured integrated planning process links the IBP/S&OP process of business partners (say, manufacturer and channel partners) with the CPFR process. While CPFR helps the manufacturer understand true customer demand, IBP/S&OP process ensures that supply is able to meet demand
  • Align S&OP planning to financial planning
  • Align top-down and bottom-up plans to arrive at consensus
  • Forecast at a higher level, with the ability to roll-up and roll-down forecasts across multiple dimensions (e.g., product, geography, time-period, value, volume) to facilitate consensus planning
  • While consensus plan should drive supply chain, it is recommended that a demand range is provided to supply planning and finance teams in order to evaluate possible opportunities to grow revenue and margins, while also keeping an eye on budgets
  • Maintain a log of all assumptions made in forecasting and compare forecasts against actuals. Analyze forecast error and relate this with the assumptions made and unexpected events. Document findings and observations for future reference
  • Proactively identify, assess, and mitigate supply side risks vis-à-vis manufacturing capacity and supplier risks to ensure that supply is available to meet demand

Data:

  • Ensure data structures and definitions are consistent and aligned across enterprise
  • Set up a robust master data governance process, consisting of cross-functional stakeholders, to maintain a unified product taxonomy

Organization/People:

  • Shared goals/metrics as opposed to individual functional goals/metrics can help drive collaboration and communication among cross functional teams.

Analytics and Technology:
A matured integrated planning process thrives on data driven decisions and extensive collaboration across enterprise functions and with supply chain partners. Manual communications, such as email and phone calls, don't scale. Analytics and Technology plays a key role in providing speed and scale to facilitate faster and effective decision making. It drives:

  • Real-time visibility into performance, armed with the latest POS data and supply information to proactively mitigate demand and supply side risks
  • Scenario planning ("what-if" analysis) to simulate and anticipate demand and supply side opportunities and risks
  • Collaboration between supply chain partners and internal functions by allowing manual overrides, exception management, alert management, notifications, and workflow management through user-level authorization

Author: Mani Iyer - Assistant Vice President, Supply Chain Planning Practice & Solutioning