Deutsch, E. (2012).

The role of the coordinators in integrated business planning (IBP) : opportu-

nity abounds (10 p.) [s. l.] : Oliver Wight International (Oliver Wight Paper). (043766)

The Role of the

Coordinators in Integrated
Business Planning (IBP)
Opportunity Abounds

By Eric Deutsch, Oliver Wight Americas

 want meThey

What?!
to do

How am I going to find the time to be an IBP Coordinator

and still manage to do my regular job?

It's the question often asked by the essential

(and sometimes weary) linchpins tapped by
senior management to be key players in
the IBP process. If you are one of them,
fear not! The additional responsibilities may
seem daunting, but the opportunities that lie
ahead are well worth the effort. You have
been asked to be a central player in
THE WAY the business will be managed.

The IBP process is a disciplined, regular,

and routine review of the product portfolio
in support of strategy, updated customer
demands, supply capabilities, and the
resulting financials. The process gives
management a full view of the business
and improves communication, cooperation,
and integrated management by ensuring
one integrated set of numbers and the
deployment of strategies. It is a monthly
cycle most often comprised of the following
steps: Product Management Review,

2 THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP)


S&OP
Is Evolving!
The focus of attention on S&OP has been shifting
toward a better understanding of the external
environment as well as ensuring alignment and
synchronization among the internal functions of the
company, which was originally S&OPs primary
objective. The shift toward strategic management is
a key driver in the transition to Integrated Business
Planning (IBP). For more information, see the
article "Transitioning from Sales and Operations
Planning to Integrated Business Planning" at www.
oliverwight-americas.com.
Demand Review, Supply Review, Financial Appraisal, Integrated
Reconciliation, and Management Business Review. Each step in the
process has an Owner (senior-most leader in the respective area of focus)
and a Coordinator.
Successful implementation of the IBP process requires effective convergence of
People, Processes, and Tools. Although all three elements are necessary
and important, people will ultimately mean the difference between success
and mediocrity. The engagement and active participation of senior
leadership is essential. Equally important is the selection of key players
in the process, particularly the IBP Coordinators.
The role of Coordinator is not an administrative role, but a key role in
orchestrating the IBP process. The coordinator should be the "right-hand
person" to the owner of the respective step in the process. The coordinator
meets with the owner well in advance of their respective reviews to give a
"straight shot" of the issues, risks, vulnerabilities, and opportunities that
have presented themselves through the process. This enables leadership to
come well prepared to the meeting and to provide direction based on
solid facts and assumptions. As a result of this up-close-and-personal
participation in the business management process, IBP Coordinators
realize many rewards. Among the top benefits is access to leadership
and key management, camaraderie within the network of coordinators,
and an increased potential for upward mobility.
There is a "fly-on-the-wall" feeling that is recognized by coordinators when
the process is first implemented, and they are increasingly involved in
higher-level leadership conversations. It can be exciting, intimidating, and
revealing...but also comes with great responsibility. The information
developed through the process is the "truth as we know it." Sometimes
the truth can be difficult to hear, but it is always beneficial to be part of
THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP) 3
 the conversation. Access to these discussions
is an education that cannot be bought or
acquired in school.
The IBP process is designed to have multiple
It can be exciting,
intimidating, and
coordinators orchestrating the individual
steps. A natural camaraderie develops
between the coordinators, especially during
revealing...but also the difficult early cycles as the process is
comes with great being rapidly improved. The community
shares discoveries, pains, and solutions to
responsibility. The
common problems. The coordinators also
information devel- attend the other reviews in the cycle,
oped through the resulting in valuable insight into areas of the
process is the 'truth business that are normally not as accessible
to them in their functional roles. Finally, the
as we know it.' IBP process is being increasingly adopted
4 THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP)
by many industries, and we are finding that
an informal external network of coordinators
has developed. Imagine plugging into a
network of industry linchpins!
It doesn't take much of a leap to understand
that regular and routine access to senior
management, increased understanding of
the entire business, and a strong network
will lead to future career opportunities.
Coordinators and IBP project leaders often
become the next generation of executive
managers, and for good reason. Why
would you not want to promote the people
that have been actively participating in the
integrated way of running the business?
What group of candidates has a better
understanding of the issues, risks, vulnerabilities, and opportunities that lay ahead? It's
a natural progression.

THE NUTS & BOLTS

The Product Management Review (PMR) is owned by the Person in Charge (PIC) of Product
Development and Portfolio Management. The PMR Coordinator is responsible for gathering
and collating information related to changes in the product portfolio. The questions to be
answered are: What will we be introducing into the portfolio over the planning horizon?
What are the time-phased volumes in units, revenue, and gross profit? What are we
phasing out of the portfolio and when? What has changed since the last review? The PMR
Coordinator is typically a manager or key person from the Product Management, R&D,
or Engineering department, with detailed knowledge of the New Product Introduction and
Product Life Cycle Management processes. The result of the PMR is a clear communication
of what and when the Sales & Marketing organization is authorized to sell and what
supply is expected to provide, constrained by strategy.

The owner of the Demand Review is the PIC for marketing and selling the companys
products and/or services. The focus of the Demand Review (DR) is what volumes and
at what price the business intends to sell, again in volume (units), revenue, and gross

THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP) 5

 The IBP process is being increasingly adopted by many industries, and
we are finding that an informal external network of coordinators has

developed. Imagine plugging into a network of industry linchpins!

profit, time-phased over the planning horizon. It is the DR Coordinator's task to pull
together information from the Sales and Marketing team, customers, and the market-
place and organize it into a clear representation of what the business intends to sell
and how the business plans to influence the marketplace. The DR Coordinator is
usually a senior Demand Manager or other key player with a good understanding of
the collaborative forecasting process. The DR Coordinator must have enough under-
standing of the business to challenge the proposed demand plans and properly vet the
information presented in the DR.

The owner of the Supply Review is the PIC for providing supply. The primary focus of
the Supply Review (SR) is on capabilities. The supply organization is predisposed to
say "Yes, we can meet demand plan," but often this is a "Yes, if..." or "Yes, but..." statement
based on constraints within the supply chain. It is the SR Coordinator's role to facilitate
the translation of these capabilities and constraints into a transparent view of supply, so
that choices can be made as a team. One key element is the Rough-Cut Capacity Plan
(RCCP) that translates demand and resulting supply activities into capacity requirements on
key resources. Also important are time-phased projections of inventory levels and operating
costs. Improvement projects conducted by the supply organization are also reviewed
and included in the forward-looking plans. The SR Coordinator is often a manager
from the Planning, Manufacturing or Supply Chain organization. This person must have a
deep understanding of the various choices and options in supply, how they impact the
customer experience, and the financials of the business. Remember, this person must
present a clear set of choices in a constraint situation so that decisions can be made
before there is a crisis.

6 THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP)

The owner of the Financial Review is the
Chief Financial Officer. The Financial
Appraisal (FA) Coordinator validates the
financial numbers coming out of the
preceding reviews and creates projected
Profit & Loss, Cash Flow, and other financial
statements used to run the business. A
hallmark of the IBP process is that the
business is run from "one set of numbers,"
meaning the financial projections and
annual plans are integrated and developed
from the plans coming from the PMR, DR,
and SR. The FA Coordinator is typically a
senior controller or finance manager for the
business. This person must have knowledge
of the business and must be able to assist
the other coordinators in ensuring their
numbers are correct and they make financial
sense so that a properly vetted financial
projection is developed. The FA Coordinator
plays an important role in scenario planning
and calculating the financial impact of
the choices presented to senior leadership.
Integrated Reconciliation (IR) is an ongoing
process during the month that culminates in
the Integrated Reconciliation Review. There
is a key principle that must be understood:
On its own, IBP does not solve problems...
PEOPLE solve problems. As the cycle
progresses throughout the month, issues, risks,
and opportunities will present themselves,
and they should be addressed at the lowest
practical level in the organization in a time
frame that makes sense for importance and
urgency of the issue. It is neither necessary
nor desirable to wait for the relevant review
to solve problems if they can be addressed
by the workforce within the authorized work-
time-resource balance previously set by
management. As issues are addressed,
decisions are made, and needs for leader-
ship guidance is recognized, items or issues
requiring leadership guidance are gathered
and brought to the Integrated Reconciliation
Review (IRR). The IRR is a meeting of the
coordinators and select key players. The
purpose of the IRR is to gain consensus on
the "story of the business" (the narrative) and
to set the agenda to be presented at the
MBR. Both the ongoing IR process and the
Integrated Reconciliation Review are
coordinated by the MBR Coordinator.
THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP) 7
 Oliver Wight is often asked whether the
MBR Coordinator role is a full-time position.
The answer is...it depends. In small to mid-
size organizations, the MBR Coordinator
role could possibly be fulfilled by one of
the other process-step coordinators.
We urge caution here in that, especially in
the beginning of an implementation, there is
a lot of work to be done, and coordinators
are typically overwhelmed. If a coordinator
is to wear two hats, be sure that they have
capacity to do so effectively, both short-term
and long-term. In large organizations, the
role of MBR Coordinator is increasingly
becoming a full-time position due to the
complexity of the organization and the level
of activity required during the IR process.
Finally, in very large organizations, we are
finding that a full-time MBR Coordinator
works in conjunction with a separate IRR
8 THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP)
Owner who is selected by the Executive
Team to chair the IRR. The IRR Owner is
generally a member of the Executive Team
or a senior-level direct report. The IRR Owner
ensures that the resulting MBR agenda has
the appropriate executive focus and flavor. It
is important to note that it is best if the IRR
Owner is selected through consensus by the
Executive Team and that the person is
someone they trust to ensure that the "truth as
we know it" is brought forward to the MBR.
In addition, the absolute critical criterion for
the MBR Coordinator is that the Managing
Director, President, or CEO respects, trusts,
and is willing to listen to him or her. In short,
the organizational structure around IR/MBR
coordination and IRR ownership is important
and should be given due
consideration in the
design process.

The owner of the Management Business
Review (MBR) is the Managing Director,
Coordinators and IBP project leaders often become
President, CEO or otherwise the Person In
the next generation of executive managers, and for
Charge of the business unit being managed
good reason. Why would you not want to promote
through the IBP cycle. The MBR is where the
the people that have been actively participating in

full picture of the business comes together.
the integrated way of running the business?
Time-phased projections of products,
demand, supply, and resulting financials are
clearly presented to the stakeholders of the
business. Also, choices and decisions made
during the cycle and decisions that need to
be made by senior leadership are
presented. The MBR Coordinator meets
in advance of the MBR to brief the MBR
Owner on "the story of the business,"
highlighting past performance, changes
since the last cycle, plans to close the gaps
between projected performance and
strategic goals, and decisions required
by senior leadership.

Finally, in an organization that has multiple

business units or entities each running an
IBP cycle, there is often an IBP Manager or
Central Coordinator for the entire organ-
ization. Typically, a summary of results from
each MBR are brought together for an
Executive Review, chaired by the
Managing Director, President, or CEO
of the organization.

THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP) 9

 The natural choice for the IBP Manager role is the project manager for
the IBP implementation, as this person will also be responsible for
ongoing improvement of the IBP process. This person should be a senior
manager in the organization, comfortable in an executive environment,
and possessing the ability to influence change and drive improvement.
SUMMARY
Being selected as an IBP coordinator is opportunity knocking. Embrace it.
Also recognize that it will be painful in the beginning, but as time progresses,
you will find that life becomes easier, not only in IBP but in your functional
role as well. Done well, IBP enables improvements in the work environment
as expediting and firefighting diminishes, natural conflicts are properly
managed, and clarity increases. Be a part of this transformation, and
take it with you as your career progresses. Opportunity abounds!
What's
In A Name?
The term "Coordinator" often has an
"administrative" connotation and could be seen
as a relatively simple function, especially in large
organizations. The IBP Coordinator roles are far
from simple! If the term "Coordinator" doesn't sit
well with you or is connected with lower/entry-level
positions in your company, consider "Facilitator"
or "Process Leader". In the end, the role must
be respected and should have a name that is
commensurate with the importance of the position.

To talk to an Oliver Wight S&OP/IBP expert on implementing or

improving S&OP/IBP, please contact www.oliverwight-americas.com or
call 800-258-3862.

10 THE ROLE OF COORDINATORS IN INTEGRATED BUSINESS PLANNING (IBP)

About the author

Eric Deutsch, is a coach and educator who partners with companies to improve their
integrated planning and management processes. Eric has 15 years of hands-on experience
in implementing Master Scheduling, Demand Management, and Sales and Operations
Planning /Integrated Business Planning processes in a multi-national, specialty chemical and
biotech company. Prior to joining Oliver Wight, Eric held several management positions
in manufacturing, logistics, and supply chain where he led teams through an Enterprise
Resource Planning (SAP) implementation, several mergers and acquisitions, and major corporate restructuring.
He was also instrumental in leading their effort to implement Sales and Operations Planning. As project manager,
Eric led the S&OP implementation across four diverse business units simultaneously. The divisions achieved
significant operational and financial performance results from Sales and Operations Planning and the business
received Class A certification.

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