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Managing Risk in Your S&OP/Integrated Business Planning Process

In this report, Aberdeen examines risk management from the demand side, the supply side, and the known areas of expected change resulting from the impact of Brexit and U.S. tax and trade policies. By Aberdeen Group

November 25, 2018

Supply Chain Risk

From a supply chain perspective, the risk is associated with managing all the variables to stay on track, with backup and contingency plans to deal with any eventuality that might occur.

Institutionalizing and formalizing the approach is where the value of the S&OP/IBP (Sales and Operations Planning/Integrated Business Planning) process makes the critical difference.

In this report, Aberdeen examines risk management from the demand side, the supply side, and the known areas of expected change resulting from the impact of Brexit and U.S. tax and trade policies.

The report identifies how the S&OP process can address issues within the existing process framework and how it can be leveraged to determine the financial impact of the potential risk scenarios.

Making the Case for Integrated Business Planning

The following step-by-step checklist comprises the main capabilities necessary to maximize IBP:

  1. Smoothly integrate S&OP and strategic planning under one comprehensive process.
  2. Perform fast simulations, comparisons and what-if scenarios.
  3. Compare actual performance to the plan.
  4. Develop plans that evaluate both financial and volumetric performance.
  5. Plan across global, regional and multidivisional organizations.
  6. Assess the timing, impact, and risk of new product introductions.
  7. Visualize operational risk and develop mitigation plans.
  8. Model your business over multiple time horizons.
  9. Evaluate alternate product aggregations.

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