CHAPTER 4: Integrated Business Management (Sales & Operations Planning).

PURPOSE: To establish an integrated business management process that realigns company plans in response to change, including the integration of financial plans. It drives gap-closing actions to address competitive priorities, upper-quartile performance and to deliver management commitments. It deploys the business strategy.

Subject

Definitions 1. There is an integrated business management process that ensures the business is perpetually managed to meet strategies, goals, and commitments in response to changing condition.

Topics a. The Management Process b. Frequency and Horizon c. Business Agenda d. Policy

Integrated Business Management Structure

2. The process comprises a series of integrated and interdependent business reviews, which are structured and focused recognizing the nature of the business and its organizational accountabilities.

a. Process Definition b. Business Accountabilities c. Participants Clearly Identified d. Monthly Process with Predefined Activity Dates e. Global, Regional and Multientity Businesses f. Style and Media

3. Each business review encompasses an assessment of demonstrated performance, future plans with clearly defined supportive data, and issues or opportunities arising.

a. Data Requirements are Defined b. Families and Analysis c. Emphasis on Assumptions d. Focus on Change e. Management Information

Summary and Integration of the Business Reviews

4. The Product Management Review manages performance, progress, and change, and ensures ownership for product plans. Commitment is made to an updated plan with respect to deliverables, timing, and cost.

a. Definition of Scope b. Roles c. Preparation d. Performance

Chapter 4 Integrated Business Management (Sales & Operations Planning) - Checklist Overview

Subject

Definitions e. Review f. Communication 5. The Demand Review manages performance and ensures ownership for market and customer plans. Commitment is made to an updated demand plan in respect to volumes, revenue, and margins.

Topics

a. Definition of Scope b. Roles c. Preparation d. Performance e. Review f. Communication

6. The Supply Review manages performance, capability and flexibility, and alternative supply scenarios. Commitment is made to an achievable supply plan in response to demand and product management requirements while managing resources and costs.

a. Definition of Scope b. Roles c. Preparation d. Performance e. Review f. Communication

Integrated Reconciliation

7. Integrated Reconciliation takes place continuously to address business-wide issues requiring resolution. Integration issues are managed from a total business perspective to reoptimize the business in response to change.

a. Definition of Scope b. Roles c. Manage Trade-Offs d. Facilitates Resolution e. Drives Gap Closing

8. Approved company-wide projects are monitored and evaluated for their impact on the business.

a. Definition of Scope b. Roles c. Strategic and Integration Fit d. Visibility for Resource Management e. Assess Viability

Chapter 4 Integrated Business Management (Sales & Operations Planning) - Checklist Overview

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Definitions 9. Financial projections derived from all preceding plans are an integral element of the process. Stand-alone financial forecasting has been eliminated.

Topics a. Definition of Scope b. Roles c. One Set of Numbers d. Financial Build Up e. Financial Appraisal e. Financial Opportunity and Risk

10. A Reconciliation Review is conducted to assess the outcome of this process cycle, the status of reconciliation issues, and to identify the focus for the Management Business Review.

a. Definition of Scope b. Roles c. Understanding of Change d. Focus on Issues e. Preparation for the Management Business Review

Management Business Review

11. The Management Business Review is owned and chaired by the unit or business head and comprises the leadership team. The review assesses performance, trends, commitment gaps, and gap-closing proposals. Decisions are taken, and direction is provided and communicated for action. 12. Throughout the process, strategy deployment is monitored, and leadership for the strategy is demonstrated.

a. Definition of Scope b. Roles c. Address the Issues d. Long-Term Focus e. Communication a. Strategic Framework b. Visible Strategy c. Monitoring d. Focus by Exception

Strategy Alignment and Deployment 13. At each process review, plans are checked for congruence with strategy.

a. Strategy is Understood b. Strategy as the Driver c. Gap-Closing Activity

Chapter 4 Integrated Business Management (Sales & Operations Planning) - Checklist Overview

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Definitions

Topics d. Strategy Deviations

Management of Risk and Contingency Planning

14. Management of risk and contingency planning is evident throughout the process.

a. Facts and Assumptions b. Risks and Opportunities c. Alternative Solutions d. Managing the Risks e. Process Capability

15. The annual plan is derived directly from Integrated Business Management rolling plans and extracted close to the start of the financial year.

a. Source of Data b. Integrated Process c. Rolling Business Horizon d. Process Effectiveness e. Timing

Financial Integration 16. The business cost structures support effective business decision making through the process.

a. Product Costs b. Integrated Transactional Data c. Understanding of Cost Drivers d. Financial Analysis e. Timeliness of Financial Reporting

Performance Measurement

17. A balanced set of measures exists to manage and improve the Integrated Business Management process and performance of the business. All measures have ownership and accountability and are integrated as part of a company suite to drive business improvement

a. Scorecard Review b. Integrated Structure c. Ownership and Accountability d. Improvement Activities

Chapter 4 Integrated Business Management (Sales & Operations Planning) - Checklist Overview

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Definitions 18. Integrated Business Management is a team-based process demonstrating effective group dynamics, breadth of organizational involvement, preparation and participation, open sharing, commitment, and accountability. a. Leadership

Topics

b. Collective Behavioral Responsibility c. Accountability d. Empowerment e. Preparation

Behavioral Characteristics 19. The culture of Integrated Business Management is one of trust in the process, managing with an integrated set of numbers, and generation of management information to enable effective decision taking.

a. Integrated Set of Data b. Respect and Trust c. Top-Down Behaviour d. Supporting Processes e. Process Improvement

The expected suite of business performance measures will include the following core measures, supplemented by business specific measures dependent on strategy focus. Business Performance Measures The standard for each measure will be either upperquartile performance, a minimum standard of 99.5 percent, or attainment of business plan (as indicated). This measure demonstrates continuous performance improvement.

1. Sales Revenue 2. Operating Profit 3. Return on Net Assets 4. Cash 5. Customer OTIF to Request

Chapter 4 Integrated Business Management (Sales & Operations Planning) - Checklist Overview