How to Manage Supply Chain Disruption with Integrated Business Planning

The Covid-19 pandemic affected all areas of life, business included. Supply chains saw the unleashing of unprecedented disruption touching on multi-national businesses. What worsened the situation is that the traditional means of managing disruptions such as surplus capacity or inventory are no longer applicable in supply chains. What’s the implication? Business heads have to ensure their business units are resilient by connectedly diversifying sourcing and distribution so that at the end of the day, all operations across the supply chain network are transparent. Such a means of ensuring transparency is the adoption of integrated business Planning (IBP). This article discusses how supply chain integration can be used to manage disruption in the chain.

 a. Use integrated Business Planning to ensure proper planning

One of the identifying marks of a proper IBP is thorough planning. Changes will unpredictably occur but with IBP, supply chain disruptions are better handled. IBP demands highly-focused coordination, and this may make planning challenging at the onset. This is because the initial steps of IBP setting include dismantling silos, demarcating communication lines, and setting reporting structures.  However, once the IBP is fully established and its framework laid down, things change, and handling supply chain disruptions is made simpler. After such an establishment of a flawless pattern, the heads and decision-makers meet once or twice a week to assess and discuss impending risks. The disruptions are reviewed and the system gets back on its feet.

 b. Holistically see the supply chain

Using the IBP lenses to have a holistic view of the supply chain prepares a system to manage disruptions that may occur. A rightly-done IBP magnifies the system gaps that are likely to cause disruptions, and bridges these gaps. The business is planned in a way that ensures the tactics in the system are related to the business strategy via a concise strategic plan. Additionally, use IBP to affirm that your sales are connected to expenses; and the products you offer are just what your clients require. This way, any disruptions that may occur due to dead stocks or backlogs are mitigated.

 c. Achieve a strategic focus using Integrated Business Planning

For your supply chain to at least survive and flourish, a strategic focus is essential of your integrated supply chain. Proper integrated business planning pays attention to the chain’s specific identities and how such relate to the target market and products and services offered by the supply chain. When the three tenets are clearly looked at from all perspectives, the IBP achieves a strategic focus of the chain and this secures the business. All the decision-makers must keep in mind that supply chains may relate but their special identities will vary, making each chain unique. Consequently then, each chain will apply unique means that are tailored to the chain’s identities to plan for the target market demands and the production of goods.

 d. Focus the right energy to the right place with IBP

When disruptions occur in a system, it poses such a huge challenge to the system. For instance, there occurs a level of ‘confusion’ in the supply chain. With this situation in place, it becomes a challenge for the system to focus its energy in the right direction. Resources and time are prone to wastage at this critical moment. To evade such a scenario, use IBP to set business priorities for the supply chain. The IBP clearly demarcates and directs you on the right and most important areas in the business to pay keen attention to.  In case a disruption occurs, the system is best placed to manage it since energy, time, efforts, and resources have always been prioritized.

 e. Predict and prepare for the disruptions

The future is unpredictable especially with the on-going pandemic which ‘hurts’ business. However, with IBP in place, some level of preparedness and prediction is achievable for the disruptions that may occur. Subject the chain’s past data to software and use algorithms to predict future disruptions. Some companies have found a continuity plan to be an effective part of the IBP that shields chains when disruptions occur. Connectedly simulate volatility in the system by ensuring demand, supply, and business goals impact each other.  This system volatility gives the chain a clear picture of how things will be should any disruption occur. Now that the team is informed, a weighted decision is made.

 f. Use Integrated Business Planning to make real-time a reality

Supply chains are among the industries that boast of and benefit from real-time operations which in turn help them manage system disruptions.  Supply chains differ in scope and size, financially and quantitatively, and even the horizons over which the chain is intended to go. Thus, only real-time operations will make a supply chain resilient to disruptions. Use an integrated supply chain to forecast future uncertainties and heighten your chain’s resilience.

 g. Take advantage of technology

IBP grants you the special opportunity to use technology as a way of improving visibility in a system. In the analogy of a star in the sky, IBP is the lens that that supply chain leads will use to magnify into the foreseeable future. I will stress again that the future is unpredictable, but then some level of visibility can be there through the technological application. Use the ‘what if’ factor and see what disruptions might occur to the chain should some variables change. For instance, SAP has a technology that embeds supply and demand and plays around with the figures to see how their system can respond to disruptions. Such distortions, although simulated, can be closely attributed to what a disruption subjects a system to. The financial impacts and network implications are envisioned. The company then uses the simulated result to prepare how to manage the disruptions should they occur in the future.

 

Conclusion

The pandemic has taught the supply chain a lesson, disruptions are prone to occur and resilience is critical if the system is to stand on its feet after such disruptions. Over the years, the supply chain industry has applied various means to manage disruptions but those means have become ‘outdated’ because of the dynamic nature of disruptions. That’s why a more succinct method such as integrated business planning is now being adopted to manage disruptions. This article has shown how you can use IBP to manage disruptions.