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Business and Technology Insights

Bridging the Demand and Supply Gap with Integrated Business Planning

 
March 29, 2017

Just over thirty years ago, a Hollywood movie prompted demand for sci-fi footwear but with no supply to back it up, a generation of teenage boys and girls were left disappointed. Blockbuster Back to the Future featured, among other futuristic products, a self-lacing sneaker. Three decades later theyve become a reality and the planning tools that forward looking companies use to understand and shape demand for such future-is-now products offer a beacon for others grappling with rapidly changing customer demand.

Supply and demand gaps have been around for even longer. But whereas in the past, longer seasons and shorter supply chains meant these gaps could in some ways be hidden, the brutal reality of our digital era is that theyre more visible than ever.

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While Sales and Operations Planning (S&OP) may have served you as a faithful planning tool for many years, youre probably finding its utility is spent. Businesses today are struggling to respond to the dynamics of technological advancements and digitization.

You and your fellow business leaders are making efforts to understand how to stay innovative and respond to disruptive business changes with agility and efficacy. You are laboring to keep the demand, supply, and financial planning objectives aligned with the business strategy.

The opportunity lies in the digitization of the planning process, which ensures real-time, secure access to insights anywhere and everywhere. Your business requires live information on the demand and supply networks and the ability to automatically link this information with product management and financial planning. The way you perceive products and customers, and engage with suppliers has to change. Operating in organizational silos impairs your ability to respond to market dynamics, understand consumer trends, and incorporate flexibility in the supply chain whether youre supplying sci-fi sneakers or auto parts. You should take an inclusive approach to your extended supply chain. Inventory management needs to be cost efficient. Companies using an S&OP model need a robust next-gen planning solution. A mere revision of the S&OP model will not suffice.

Integrated Business Planning (IBP) is the successor to S&OP. Smart businesses appreciate the need to keep pace with the changing demands and bridge the demand-supply gap through a contemporary planning model. Addressing the now of financial planning and supply chain management, taking a 360 view of the consumer, and using digital resources to your own advantage are determinants of success today.

Alongside investments in technology to bring the future to the present, companies are also gradually revamping their customer engagement to a distinctly immersive experience. Nike, the company that brought the world the self-lacing sneaker, for example places large emphasis on its direct-to-consumer division. Its New York store offers customers the opportunity to make one-on-one appointments with Nike staff for up to an hour. Such close consumer engagement allows Nikes staff to read the minds of their customers in depth, understand their requirements, and appreciate the changing tastes and choices. Armed with an informed perspective of the evolving consumer trends, Nike can strategize demand and supply needs and link it up with financial planning. Such real time information also enables Nike to predict demand for its shoes instead of merely responding to the demand when it arises.

The future is now and IBP that allows you to sense, shape, and then orchestrate demand makes you far better equipped to lead value driven growth strategies, link different silos, and efficiently manage supply chain. These will be the markers of success in a highly connected dynamic world where customers requirements change frequently and at speed. Even if youre not in the shoe business, youll find much to help you meet future demand.

Ankit Tiwari is a Senior Engagement Manager with TCS' Consulting & Enterprise Solutions Practice. Ankit helps organizations develop a transformation strategy and implementation roadmap the integrated business planning and execution space to climb up the maturity curve. Ankit has spent more than 11 years helping customers, across industries and geographies, realize tangible business benefits by integrating people, process, and technology.