Supercharged Supply Chains

CHAPTER 8Integrated Business Planning: Leadership from the Top

As described in Chapter 2, MRP has multiple inputs. Chapter 7 described master scheduling and its direct and powerful impact on MRP. This chapter describes the impact of Integrated Business Planning (IBP) on the planning process. As shown in Figure 8.1, IBP links business strategy to execution and is the primary driver of the Master Schedule.

FIGURE 8.1 Business Excellence Planning

Integrated Business Planning had its earliest beginnings on the supply side of the business. Companies realized that with increasing market complexity and change, they needed to plan their resources more frequently than once a year. Several companies began to do Resource Requirements Planning (RRP) monthly using the fundamentals of Rough‐Cut Capacity Planning (RCCP) but carried out at the aggregate (category, family) planning level. The label for these monthly resource planning meetings became “Production Planning.” It became apparent that these monthly Production Planning meetings required a credible demand forecast to determine resource requirements. The need for improving forecasting was becoming increasingly apparent and led directly to the Oliver Wight Company's coaching a number of companies in this effort. A particularly important event occurred when an Oliver Wight Principal had what he thought was a Master Scheduling problem ...