Supply chain disruption is becoming the norm rather than the exception. Whether it is cracks in the Hernando do Soto bridge, ships getting stuck in the Suez Canal, or global pandemics, supply chains need to be more agile than ever.
To talk through some of the implications of this I invited Mike Snape of SAP partner company Oliver Wight to come on the podcast and chat about this with myself and Claus Jensen. Mike and Claus went deep into how Integrated Business Planning can help organisations.
We had an excellent conversation and, as is often the case, I learned loads, I hope you do too...
If you have any comments/suggestions or questions for the podcast - feel free to leave me a voice message over on my SpeakPipe page or just send it to me as a direct message on Twitter/LinkedIn. Audio messages will get played (unless you specifically ask me not to).
To learn more about how Industry 4.0 technologies can help your organisation read the 2020 global research study 'The Power of change from Industry 4.0 in manufacturing' (https://www.sap.com/cmp/dg/industry4-manufacturing/index.html)
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You know, I think it's in the name integrated business planning. Anybody who wants to be successful, you need to have a plan of where we're going, what is it we want to do with our business? How do we get there, as Mike outlined? Where are the gaps based so that we can start coming up with? How do we overcome those gaps?Tom Raftery:
Good morning, good afternoon, or good evening wherever you are in the world. This is the digital supply chain podcast, the number one podcast focusing on the digitization of supply chain. And I'm your host, global vice president of SAP. Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me, I have my two guests today, Mike and close. Mike in close. Would you like to introduce yourselves with Mike going first?Mike Snape:
Sure. Yes. Hi, Tom. I'm Mike. I'm from Oliver Wight. So we're a thought leader in integrated business planning, and our origins 50 years ago, when we first started were back in MRP, MRP. Two, involvement, sales and operations planning and they ended up today with integrated business planning. I've worked with Oliver Wight for 30 years as a client and then actually joined them probably five and a half years ago now.Tom Raftery:
Okay, so bourbon close.Claus Jensen:
Yeah. Thanks, Tom. I'm part of the northwestern European Center of Excellence for supply chain, where I focus on anything that has to do with business planning, really spending most of my days engaging with SAP customers, prospective SAP customers discussing how can technology help transform all the efforts around planning within the organization to make them focus on running the business rather than chasing the data and work closely with some partners, one of those being Oliver white, with whom we now had a very close working relationship for going on two years now. And very excited about how we complement each other in this space.Tom Raftery:
Nice, nice. Now, the podcast covers all aspects of supply chain everything from engineering to manufacturing, to logistics, delivery operations, the whole gamut. So there are likely people listening who may not be aware of what integrated business planning is. So could we start with a bit of a level set on what we mean when we say integrated business planning?Mike Snape:
Sure. So integrated business planning, stemmed from sales and operations planning. So back in the 1980s, many people will have heard of sales operations planning. And it was basically where we talked about demand plan, or the sales plan bounced against supply plan said well enough capacity and what the inventory, like, projected Oh, back then it was 12 months, we're seeing best practice. Right, rolling up to today, we've evolved that no software, all of the ways that we've reinvented it if you like, and made it much more integrated, hence an image method business planning. we've, we've used it because we recognize that actually, you know, you can look, look out over the medium term to see where you are from, from a planning point of view, what we actually realized is, you can actually know, the top down sort of strategy plans. Look at that. Look for the gaps from a bottom up perspective. So we're sales and operations plan or bottom up, what's the plans look like over the next year? integrated business planning processes top down and bottom up? So what's our business strategy? Then what does our plan from the bottom what what lighten up, we've got any gap. So what we're trying to do is not from a product planning perspective, or commercial planning perspective, and a supply planning perspective. And when we aggregate all that information from a financial point of view within then look at where we are as a business compared to where we want to be, with projecting that over 36 months to see where there are potential gaps that we can now start to integrate into breath away. That's a word I might have just made that one up, if we can integrate and pull all that together and actually look it over and close the gaps. Not just as a function, but as a business now, rather than rather than the old days, you know, supply guys will tackle that themselves and not talk to commercial other product people. Either product, people tackle it themselves and not talk to those we actually talk to each other. So the whole whole teams in the business, get together, figure out how they can lock or they can lever things around product demand and supply jointly. Applause a guy Up to bring things back strategy. So that medium term so ibp is more than just supply demand balancing is no strategic strategy deployment strategy is paramount to understand. I was trying to be I was, I was trying to keep not quite short, but I might have gone a little tooTom Raftery:
close. Why is it important?Claus Jensen:
You know, I think it's in the name integrated business planning. Anybody who wants to be successful, you need to have a plan of where we're going, what is it we want to do with our business? How do we get there as Mike outlines? Where are the gaps based on that we can start coming up with? How do we overcome those gaps to realize that strategy, that's where the whole basic alignment between my processes to behaviors and then technology to underpin the execution through these processes and driving behaviors enables companies to translate between the functions Mike spoke about? Because, yes, we might have a common language speed, English, German, French, Spanish, Chinese. But capacity means different things to different people. You mentioned capacity to demand people, there's plenty of capacity in the market to consume more. The supply chain guy might say, oh, we're low on capacity. And the finance view might save our working capital tied up in inventories, we have no capacity for investing, right. So So that's sort of multifaceted translation allows companies to quickly identify areas of risk areas of opportunity, and with the right information sets, to make that decision, how to get go get, how do we go ahead here in an integrated manner as one business to become the masters of own future?Tom Raftery:
Okay. And this is obviously something that is increasingly important in times of disruption, right?Claus Jensen:
I think so if we look at where we are right now, disruptions happen all the time. And we're getting really good at dealing with those sort of small day to day disruptions that supplier runs late or production line doesn't perform exactly as we expect it to a customer change order. We deal with that fairly well. We're getting very nimble and fairly resilient and dealing with that. Now, once in a while, these big disruptions come up, whether it's a pandemic, whether its geopolitical, fallouts nature. And that's where we go into panic mode. Oh, boy, what do we do now and people, many of us start running around. What we see from our side is many of us, as is now starting to say, what have we learned from this? And that's where it becomes super important integrated business planning, solution process? How do we embed those learnings in the organization so we can be better in the future, we start preparing for them in the future.Tom Raftery:
Okay, Mike, were you gonna say something?Mike Snape:
Yeah, I was just gonna, I was gonna build on what clothes to say in there. And it's funny, really, you know, a lot of the disruptions we're seeing there today, you know, self inflicted, in a lot of cases, actually. And what what we do is we're extremely God, I say, we, not me, personally, people we work with the people we work with. But we're extremely guarded, we think about actually putting in processes to manage these small disruptions. So we build these elaborate add on processes, to take care of variations that we accept, and supply and demand and you know, and all that sort and the plans, so actually put in place things to manage the variations rather than tackling point of them disruptions in the first place learners close to the load into though we've got the biggest stuff, then we've got the disruptions that could impact countries, industries, the world like with COVID, you know, it's how we, you know, so we manage them as well, because they're come more often than we think as well, you know, different shapes, sizes and forms. Or, you know, we do have these disruptions coming along and it's it's a companies that I've been that that have in place, the processes, that they're reliable enough to take the the consequences of those disruptions, run that through the planning process and come up with what they're thinking the most likely outcomes gonna be based on that disruption. As opposed to a disruption happens. We're going to planning more than we're starting from two miles a day to analyzing things to death. Missing Out probably a vital piece of information and making the wrong decision and doing it again the next day doing it again the next day. Setting up war rooms, you know, to deal with it, talking about the same thing every day. And you can tell the difference and close all the votes for this as well, you know, companies have got a good, mature, careful ibp process in place, don't get into that very calmly plan the way through it and understand what the impacts are the disruptions going to be, where the vulnerabilities and the opportunities that the plan, put in place, things that they can use to actually, in some cases, you know, take advantage of disruptions and actually make it into a positive outcome. Because a lot a lot of disruptions, although we all see them as negative, because that's a confirmation bias coming in is a disruption, it must be negative. So for all the negative things, but actually, there's a lot of positive stuff around it as well, you know, so even with COVID, you know, is there are positives or negatives change the way we work. Some people might think Lawson in a negative way, but actually, it's in a positive way, in that we do all this virtual stuff. Now, you know, with the work from home, we can sit in the house with our packs, you know, so positive stuff come from a lot of positive benefits for a lot of businesses that have gone through as well. But that's the other side there are there has been significant water negative impacts as well as disruption. In general, I think,Tom Raftery:
my my dogs are loving the fact that I'm not traveling at the moment. Is this just something for big companies, though, I mean, do small companies a do small companies need to worry about this and be I mean, a lot of the solutions that are out there are probably built for larger companies and priced accordingly. Right,Claus Jensen:
I would say that this is something for companies of all sizes. And it's one of the things I've seen or less careers, smaller companies that are not, or have not been around for too long. And typically more aware of this, because they know they're still building their brand, they're still building a market still finding that nice to call their own. So they are much more aware of at big companies have been around for a long time, will sometimes be more surprised by disruption. Because they're just so used to just how we run things. If new technology is all of a sudden ingested, and we can think of many companies will have been disrupted by new technology, and some little startup came up was fast spotting that and getting it out there. So it's definitely for companies of all sizes. Is it priced accordingly? Absolutely. Both. I'm gonna let Mike talk to that from the little white aspects or SAP side, many of our customers are small and midsize companies that are either eager to grow or are concerned about the longevity, their sustainability, or just companies that are, you know, thinking ahead, where where do we need to look out for? So absolutely, companies of all sizes? should be looking into this and are looking into this.Tom Raftery:
Okay, Claus, Mike?Mike Snape:
It's interesting, isn't it? I mean, I mean, it's absolutely what Claus says this for companies of any size. You wind the clock back, when I want to test me age and memory here 2 , 30 years, right? 20, 30 years one of the biggest compan es today is Apple, where did th y start two blokes in a garag , something like that? I do 't remember that. There wer small calm that'll get t em No, that disrupted the mar et players. And then eithe one of the biggest compa ies, Amazon started in his edroom, you could look it up, yo know, what they've turned int , you know, so it's for comp nies of any size. And I thin , you know, having the having t is process, I'm going to go proc ss in place to help you to iden ify in a in a regimented way nd a formal cadence managed way to help you to forecast because because you don't have to wor y about the process because it s reliable. And the same thing h ppens every month. You can you now, what's going to come out of it. You can actually focus on hat's going on, going on out here in the market l ok for them opportunities. or them, we wonder ability is ot for them potential. And more on the opportunity to say f r me is why well, what are the o portunities and how can we s art to be a disruptor especi lly for the smaller businesse , you know, because the smalle businesses crumble and muc , much more wanting to grow and get bigger, quicker and out the e and a lot of cases look into t e next. The next big disrupter. Having that process in place rea ly helps to focus the mind I thi k, identify where them opportun ties go and build them plans ar und getting them opportunities r alized. You know, will Well ta k the talk, you know, what i p really is about itself. An that's our walk in the walk as ell, is the way I see it, yo know, it's actually doing some hing rather than just sitting ar und talking about stuff. Yo know, it's about, about putting out putting plans into acti n. It's all action orientate . You know, we're not, we're n t trying to create a talking sh p of ideas, we want to see somet ing from it all and the naturalTom Raftery:
you mentioned earlier, Mike, you know, companies taking these kind of disruptions and using them to their advantage. Do you have any examples of that, that you could talk to?Mike Snape:
Right, okay, so let me think back. I guess when we were looking at some of the some of the things that are probably more relevant to most people, and what one close jumpin, but one of them I've seen is the virtual meetings, right? So zoom and teams are things we use know every day. But when I think back to what they were like, last year, there weren't there were there were best that you you've done that you've got your pictures, and that was it. And then few months later, they've done the release, and you've got the Star Trek backgrounds appear in and then the breakout rooms have appeared, you know, so they've quickly took advantage of that situation, and reworked their offer into something now that people want because they have gone on and on there's, there's a market, you know, people need to carry on work and, you know, let's adapt our product to actually appeal to more people and be more used to people. You know, I mean, if you go back to two years ago, you know, would you have really thought of having a breakout room in teams? Why would I need one at all? Yeah, no, it's like, I can't live without it. Yeah. And it's, it's really interesting. I mean, that's changed. And, and they've been, I think that that that particular to me have been quite, quite good at adapting, and picking up on that disruption turned into something positive. And I guess, again, some of that probably relates to more to more people, in general, you know, and well across personality. And that's where I met quickly adapted to doing things like meals and using delivery, and then technology platforms to actually keep the business work. And it's quite interesting, really, because I saw a wonder I mean, the business well, so I was actually down one of the one of the pubs collecting our Sunday lunch. Last week, I was talking to the guys though, and they're actually saying, No, we're busy doing these clicker collapses, there's a lot of ways slightly easier, because we have to clean the tables up and watch. What is food, we'll have to tidy up, you know, so, you know, they're realizing that, but then, you know, the two people want, you know, publicans want people and fantasies. But it was it was an interesting thing.Claus Jensen:
I think, you know, what endemic has done is definitely I live in southern part of Germany in a very rural area. And some of the niceties of living in bigger metropolitan areas have all of a sudden become accessible and available in the small areas as well, to Mike's point of a click and collecting away. All of a sudden, we actually have a whole selection of restaurants we can order from where in the past, we just didn't because there's not that need for your drives as restaurant of your choosing. Right. So there's a lot of companies were very quick in identifying that opportunity. I think that's driven by a need. Then I also see companies that are in good times seed opportunity, and I think of one company in Germany called my muesli, de Okay, that basically realized, hey, people want to have their own muesli mix with nuts, seeds, berries to want to have in their I don't just want to have regular off the shelf. Internet. Fantastic. We're going to buy bulk. You, Tom, you, Mike, you can log on, mix your own mostly will pack that up, ship it to you detail, you'll have it the following day two days later. That's somebody who seen there's a potential here, what do I need a supply chain? Where do I get my stuff, my supplies from? How do I set that up? And that's another example of having that identifying an opportunity of starting small, breaking into something, identify some of the trends of the times and converting that into a viable business model. And that's where Mike's point comes in the ibp process runs on a monthly basis. You have that continuous tracking of how are we meeting our goals? Do we need to steer one direction or another? What do we do to continue to grow and And that's really what it's all about. Okay.Mike Snape:
And I think on a, on a bigger scale, you know, for for the people in the UK, you know, when you look at what happened on retail recent recently, you know, and then like the COVID and the shops getting shut down that route retail was struggling anyhow, before all this, you know, saw the people that have set up the online brands to doing quite well COVID coms are doing even better. And the recent Tom shop clauses, you know, with the Arcadia group brands, all going on the boohoo and Alsace Come on, you know, buy the things up, switch into their online platform. So straightaway, they've cleaned up, picked up some high street brands, got them into the world of internet, you know, so people can carry on older that like, the catalog brand alive, or they've gotten rid of all the shops and the costs associated with themselves, you know, and they've been, they were very quick to do that. I thought, you know, so now they know what to do and and they took advantage that we're ready and it took advantage of the situation that to grow their business further by boom, get on some well known brands into my portfolio. Interesting. We actually asked, were you interested in it, when you sit back and think about it, you know, what's, what's going on? I genuinely these things, change the world as we know it, you know, and, and, and companies can grasp this and take advantage of it. In the ready to do.Tom Raftery:
Okay, cool. So, if companies do want to grasp that nettle, and and start on this journey into integrated business planning, what would be first steps?Mike Snape:
Well, so first step through, is, I think the first step is probably self recognition, you know, you've got to want to change. So you've got to want to make things better for yourself. If you are quite happy with your lot, then, you know, we come along and say you want to do integrated business planning. When you're quite happy doing whatever you're doing, you're never gonna change. So you've got to have that desire, and that drive to actually want to do things better, and continually improve, I think and get get into that position.Tom Raftery:
But I'm fine with my Excel spreadsheets. Mike.Mike Snape:
Yeah. And you know, what a lot of people are, a lot of people are, we wouldn't recommend trying to run a business from Excel spreadsheets. Just prone to data. And there's time consuming that. I mean, I mean, I'll tell you what scares me, is Izumo talk about business risk, right? How many companies are running critical business processes on an Excel spreadsheet? and full of formulas and things? You know, what happens when that breaks? Well, we want to be a problem. You know, so for me, Excel scares the life out of me, actually. So you're asking the wrong person to form a, they'll be an SFP? Obviously, you know, so yeah, excels just cumbersome. It's hard. Men are heavy. You know, if we want to, if we want to really crunch our numbers, doing it to excel, you know, if it's working right, and you don't have any macros running that go wrong, you can probably get somewhere but people spend too much time. I think, collecting data digging for data, generating data, what we need to be able to do is get that data habit to hand and spend the time analyzer understanding what our data's challenges in terms of where we're going and what our decisions should be.Claus Jensen:
So I fully fully agree with everything makes it based on Excel, or spreadsheets in general. Excellent. If I want to do a short, quick calculation or sum up some numbers, all the risk might point out real, this additional human factor there what happens if the person who knows all the macros the person who's built this up over the years, what happens when he retires? What happens if he's an accident? What happens if he goes on long term sick leave your editor? Absolutely. All of a sudden they have all insights. Right? So that's where where do you want to start out to Mike's point on understanding the potential i think is a very, very important part self recognition requires sometimes that what am I leaving on the table and both SAP and Oliver white we offer the potential we offer the services we can work with you and identified what is the potential and where do you start out? We do this in unison. Probably sit down with you as an organization and flesh that out what is the potential How do you get there and an important point regarding that self recognition as realization is also, this is something that requires some commitment from a management layer, it's not something that's going to happen because to say the operational layer feels, that'd be the right thing to do. I'm sick and tired of dealing with the same disruption. Day in and day out. I'm going to push for this, it needs to be driven from the top down to have the desired maximum impact, which does lead to a nimbler, more resilient, and future proof organization.Tom Raftery:
Okay, super, super. Gentlemen, we're coming towards the end of the podcast. Now, is there any question that I have not asked that you kind of wish I had, or any topic we've not raised or addressed, that you think it's important for people to be aware of?Claus Jensen:
I'm sure my I could talk about this. I'm sure Mike, and I could talk about this for hours still. We have done in the past, and I'm sure we will in the future.Mike Snape:
Last year, we did an inter web what they call it. And we just chatted, we were chatting away, we actually forgot who alive was talking about it.Claus Jensen:
So but what I would say is, keep your eyes open for this space, more information is coming. We'll be releasing a white paper on the topic soon. And we'll be sharing lots and lots of information webinars coming up about how do we get there? What's the benefits? Who has done it? And really, final point, engage with us, we have the experience, we're here to help you be successful.Mike Snape:
Yeah, so we we've we've lots of white papers over on our website that people are interested they can they can go and tell them that there's no charges, download them and read them and enjoy them. We we genuinely love this stuff. That's why we do it for our job.Tom Raftery:
Brilliant. Brilliant. Fantastic. Great, gentlemen, if people want to know more about clothes, or about my car, all of our white, our IVP, or any of the things we've discussed in the podcast today, where would you have me direct themClaus Jensen:
sap.com backslash ibp if I remember correctly, I'll definitely get link across to you. Rates out, reach out to your SAP representative who will get you in touch with either myself or my counterpart in your country. It's not a one man show. There are more than just clouds on SAP side in this in this boat. And we'll definitely involve our counterparts from from Oliver white as well. But I'm sure Mike, you have channels as well.Mike Snape:
Absolutely. So we we've got a website. So I'll have a white Google search on Hawaii. That'll get you to the website. We'll we'll send the link over to Tom. So you can put it on. On the podcast notes. call the office. There was a ring you know where we're still. We're still though we're still answer phones. We've not got gone fully digital yet. You know, we're still we're still contactable the normal way. And again, I'll I'll pass the number on to Tom to on the podcast. Terrific. Great.Tom Raftery:
Superb gentlemen. That's one fantastic. Thanks a million for coming on the show today. Thanks for having us. Thank you. Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, head on over to sa p.com slash digital supply chain or, or simply drop me an email to Tom firstname.lastname@example.org. If you'd like to show, please don't forget to subscribe to it and your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.