Paper Technology International 2024 - Journal - Page 51
PAPERTECHNOLOGYINTERNATIONAL
Improved Lead Times: IBP enables companies to
optimize their production and distribution processes,
leading to signi昀椀cant improvements in lead times. This
optimization directly impacts customer satisfaction by
ensuring timely deliveries.
3. Inventory Reductions: By aligning production more
closely with demand, IBP helps companies reduce
excess inventory. This not only frees up capital but
also minimizes storage costs and risks associated with
overstocking.
4. Increased Service Levels: The improved forecasting
and planning capabilities of IBP result in higher service
levels. Companies can anticipate customer needs more
accurately, leading to better product availability and
customer satisfaction.
5. Financial Performance: Several experiences
highlights how IBP contributes to better 昀椀nancial
planning and performance. Integrating 昀椀nancial
aspects into operational planning helps in making more
informed and pro昀椀table decisions.
6. Scalability and Growth Management: IBP supports
businesses in scaling operations and managing growth
effectively. For example, it facilitates the smooth
integration of new acquisitions, ensuring the expansion
does not disrupt existing operations.
Speci昀椀c examples :
During the COVID-19 pandemic, IBP enabled paper
companies to swiftly adjust their operations in response to
昀氀uctuating market demands and supply chain disruptions.
IBP and Future Developments
As the paper and packaging industry evolves, IBP is poised
to advance, embracing new challenges and opportunities.
Emerging Trends and Developments:
1. Scenario Planning for Structural Changes:
Companies are increasingly using IBP’s scenario
planning capabilities for managing structural changes
such as acquisitions, introducing new product lines,
and justifying process improvements. This proactive
approach enables businesses to assess the potential
impacts and bene昀椀ts of such signi昀椀cant changes before
implementation.
2. Integration with Advanced Analytics and AI: The
future of IBP includes deeper integration with advanced
analytics and arti昀椀cial intelligence. This integration
will enhance forecasting accuracy, optimize resource
allocation, and automate decision-making processes,
leading to more ef昀椀cient and effective planning.
3. Sustainability and Environmental Considerations:
As environmental concerns become more prominent,
IBP will likely incorporate sustainability metrics. This
integration will help companies in making decisions that
are not only 昀椀nancially sound but also environmentally
responsible.
4. Customization and Flexibility: Future developments
in IBP will focus on offering more customized solutions
tailored to speci昀椀c industry needs, allowing for greater
昀氀exibility and adaptability to unique business challenges
and market dynamics.
2.
Figure 7: Stressed project manager.
Marco Pellegrini, IBP and Customer Service Director said,
“We considered from the beginning the involvement of the 昀椀nance
team as a must so as to achieve an integrated process and not
remain in silos.”
On the process front, establishing proper business
processes was crucial before fully implementing IBP. For instance,
a system to control order intake across the company was necessary
to execute the chosen demand-supply plan effectively. As Pellegrini
stressed, “Do not underestimate the execution part, align [to your
plan] and stay aligned, control order intake, and measure your
deviations” to preserve and increase control over your optimized
plans and, ultimately, your pro昀椀tability.
The role of executive champions in the IBP implementation
was vital in setting the stage for these changes. They also faced the
task of reconciling the centralized nature of the new IBP process
(“one number plan”) with the existing structure, where mills operated
as individual pro昀椀t centers. Moving forward, mills were directed to
focus on operational targets for the organization’s overall bene昀椀t.
Technological challenges were also signi昀椀cant. Firstly, the
number of ERPs and mill systems needed streamlining to reduce
interface complexity and harmonize master data. Secondly, during
the period when IBP processes were in place, but planners were
limited to using MS Excel, a more robust technological solution was
urgently required. Spreadsheets proved inadequate for handling
forecast creation, demand-supply balance, and the numerous
scenarios required by the S&OP team.
Data standardization and de昀椀nition also posed challenges.
It was necessary to standardize de昀椀nitions and cleanse data across
all sites, ensuring harmonized data for all IBP steps. This was critical
for ef昀椀cient system operation and, in turn, maximizing the ef昀椀ciency
of those managing the process.
IBP Bene昀椀ts
Integrated Business Planning (IBP) has proven to be a
game-changer for the paper and packaging industry, offering
numerous bene昀椀ts that enhance operational ef昀椀ciency, 昀椀nancial
performance, and strategic agility.
Key Bene昀椀ts:
1. Enhanced Demand-Supply Alignment: With IBP,
companies have successfully navigated through the
turbulent times of COVID-19. The ability to reallocate
demand and supply effectively, especially during
unforeseen events like mill 昀椀res, has been pivotal. This
strategic 昀氀exibility ensures continuity and ef昀椀ciency
even in challenging circumstances.
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