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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)[email protected]
EyeOn AmsterdamVijzelstraat 68-721017 HL AmsterdamThe NetherlandsTel.: +31 (0)[email protected]
EyeOn BelgiumDe Keyserlei 58-60 B19B-2018 AntwerpBelgiumTel.: +32 (0)3 304 95 [email protected]
EyeOn SwitzerlandAeschenvorstadt 71CH-4051 BaselSwitzerlandTel.: +41 61 225 [email protected]
Forecast ServicesCroylaan 145735 PC Aarle-RixtelThe NetherlandsTel.: +31 (0)[email protected]
Sabu Sheikh
+44 7818 250870
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