new year, new approach: take your integrated...
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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 415-577-1804fkang@kpmg.com
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
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KPMG LLP, Chicago, Office
Tel 312-665-1397pjyu@kpmg.com
Peter holds graduate and undergraduate degrees in Industrial & Operations Engineering and Computer Science from the University of Michigan, Ann Arbor.
© 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
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,
© 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
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Transactions & Restructuring and business advisory colleagues across 146 countries.
© 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
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
© 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
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?
© 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
4© 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 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
© 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
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Products/ ServicesCollaboration Collaboration
© 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
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
© 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
6© 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 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
$
© 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
7© 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 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?
© 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
8© 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 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
© 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
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reporting
© 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
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
© 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
10© 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
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
© 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
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Enablement and Infrastructure
Supply Chain Visibility
© 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 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
© 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
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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
© 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
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
© 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
13© 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 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
© 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
14© 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
© 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
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
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