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Goal of Integrated business Planning (IBP)

Sabu Sheikh

Integrated Business Planning

+44 7818 250870

Nov 6th Geneva

2

Goal of Integrated Business Planning

Go to menti.com on your phones

Type code 80-86-38

2 Questions - 5 to 10min

Preliminary agenda 13.00-14.00 Welcome, walk-in and coffee

14.00-14.15 Introduction by EyeOn

14.15-15.00 The road from S&OP to IBP by Ieke le Blanc

15.00-15.15 Networking break

15.15-16.00 Blueprint for success at a Pharmaceutical and Medical device company by Sabu Sheikh

16.00-16.45 12 Building blocks by Marco van Alfen

16.45-17.00 Wrap-up and closure

17.00 Drinks

Integrated Business Planning – ‘Destination Blocks’

3

Volume & Value discussion

TIMELY DECISIONS

Delivering Business Plan

Balanced Supply & Demand

‘End to End’ Visibility

Cross Functional Alignment

‘What If’ Scenario Planning

‘Leadership’ Led

Supplier Integration

Aligned KPIs

Profitability Modelling

Strategy Execution

What is the GOAL

of your

Organisation?

NORTH STAR for

Hospira

Delivering Business Plans.

Delivering Business Plans

5

A view of Hospira's products

MMS PumpsConsumable & MMS sets1

SolutionsCore SIP; Generic & Proprietary Biosimilars

Injectables

Devices

2

A view of Hospira's products

MMS PumpsConsumable & MMS sets1

SolutionsCore SIP; Generic & Proprietary Biosimilars

Injectables

Dev ices

63

Hospira at a glance

17,000+

Worldwide employees

~$10.9B

Mkt cap(as of Feb. 1 2015)

Lake Forest, IL

Global HQ

4.44.04.14.13.9

0

2

4

6

2010

$M

2014201320122011

Net sales

Growth through Biosimilars products in Europe and US

Rocky Mount, NC

Largest plant

~25%

% Revenue driven by RM

~70%

% of Rev. in Americas ('13)

Injectables / Biosimilars

Key product

2004

Spun off from Abbott Labs

2007

Acquired MaynePharma

Acquired by Pfizer Sept 2015

74

One number planning…but which one?

The Target / Plan

The Forecast

The Gap

HISTORY FUTURE

YEAR 1 YEAR 3YEAR 2

TODAY

Demand Forecast – is used as ‘one number plan’ Budget – Gap between Demand is reviewed in S&OP meeting

85

‘One number Planning’ in the IBP – where we started…

Hospira Drivers to Change - 20121. ‘Budgets = Forecast’ mind set

2. Supply constraints not factored in

3. ‘Burning Platform’ – missed financials for several years

96

Integrated Business Planning consists of a series of Business Planning processes that develops the Latest Business Estimate (LBE)

1010

‘One Number Planning’ process – Bottom Up/Top Down

1110

‘One Number Planning’ process – Bottom Up/Top Down

– Change Management - Demand

– 1. Demand Process Core principles

– - Demand is both Volume and ASP

– - 24 months @ SKU level

– - Realistic Sales Forecast

– - All leaders and users trained in IBP process

– 2. Business Management

– - Business Units manage constraint allocations (Global & Regional)

Change Management - Supply

– 3. Supply responsible for identifying constraints

– - Constraints confirmed in Steelwedge

– 4. Finance

– - Unconstraint Vs Constraint => Latest estimate

– - Financial Gap Vs Budget

– - Gap closing actions in Regional IBP meetings

1214

What made it work…and challenges

What made it work…1. Business Led IBP Process (top down

inv olvement)2. Inv estment in S&OP Tool which allowed

both v olume and value to be managed 3. Tool showed v isibility of unconstraint and

constraint demand in a monthly cycle4. Global IBP process design and

implementation5. Tradeof fs undertaken by leadership team

6. Supply f ocus on execution of ‘constrained plan’

Some concerns1. Role of Finance in the IBP Process

2. Selling price v isibility to wider business -risk

1315

Summary

IBP Process ensured involvement of senior leadership team

All discussion revolved around Unit/$

Financial ‘Gaps’ visibility

Supply Constraints visibility

Tradeoffs managed by commercial team

IBP Process : ‘secret sauce’ for Hospira’s success and eventual acquisition

Time to JUMP START your S&OP/IBP Process

14

Do you have questions?

15

EyeOn bvCroylaan 145735 PC Aarle-RixtelThe NetherlandsTel.: +31 (0)88-8830000mail@eyeon.nleyeon.nl

EyeOn AmsterdamVijzelstraat 68-721017 HL AmsterdamThe NetherlandsTel.: +31 (0)88-8830000mail@eyeon.nleyeon.nl

EyeOn BelgiumDe Keyserlei 58-60 B19B-2018 AntwerpBelgiumTel.: +32 (0)3 304 95 13mail@eyeon.eueyeon.nl

EyeOn SwitzerlandAeschenvorstadt 71CH-4051 BaselSwitzerlandTel.: +41 61 225 4230mail@eyeon.eueyeon.nl

Forecast ServicesCroylaan 145735 PC Aarle-RixtelThe NetherlandsTel.: +31 (0)88-8830000forecastservices@eyeon.nlforecastservices.com

Sabu Sheikh

+44 7818 250870

Sabu.sheikh@eyeon.eu

eyeon.nleyeon

188

IBP Process Attributes Structured and Disciplined

1913

One Number Planning considerations

What does ‘One Number planning’ mean?1. One commercial forecast drives both financial forecast and supply plan.

No more ‘sandbagging’ 4. Change in f orecast has impact on both financials and supply

• High Forecast – higher Financial plan and higher supply• Low f orecast – low Financials and reduced supply

5. Rules dev eloped for ‘uncertain demand’ such as tenders based on probability of win.

6. Changes in selling price maintained in system monthly7. ‘Gap’ between Demand forecast and Budget reviewed monthly at Country,

Region and Executive levels