Over the last year or so, in many Sales and Operations Planning (S&OP) expert blogs and interviews the question comes back. What is the difference between S&OP and Integrated Business Planning (IBP)? Seven differences between S&OP and IBP are given in one interview, ten differences in another. Some experts believe there is no difference at all as advanced S&OP equals IBP in their opinion.
The experts agree to disagree and take their time over and over again to explain. The S&OP practiser, who reads this, will shape their understanding on advanced S&OP, which is a great win for this vital business process. But while we’re discussing the features to close the gaps, we don’t spend time on how to do this or to think about what’s next? This S&OP-IBP vacuum, creates the illusion of S&OP progress, but is rather tiny knowledge creation.
Isn’t it time we leave this discussion on abbreviations behind us and start focusing on some value added discussions? Adding value is what S&OP/IBP was all about in the first place wasn’t it?
S&OP experts and thought leaders; stop the abbreviation game. It doesn’t have a right or wrong answer. It just discusses good, better and best S&OP. Please apply a basic S&OP principle and focus your limited brain resource and thinking where it has most added value. If we want to make progress in S&OP/IBP, please put your valuable brain time in thought leadership and start thinking about the next steps in advanced S&OP/IBP.
4 thoughts on “The S&OP-IBP illusion”
Its not just about the terminologies. IBP as the name indicates is to go beyond SCM and thats the clear trend. IBP is cross functional and encompasses entire organization to accurately forecast for future and execute on that.
IBP might not be an illusion, however it cannot be considered a recent trend. This debate has been going on for 27 years.
Advocates of IBP are rehashing the arguments brought about in Terry Schultz’s 1984 publication of “BRP The Journey To Excellence”!
The only difference is S&OP was around then and will continue after IBP advocates move on to the next fad!
Firstly IBP does *not* include the entire organization: for example, many functions such as R&D, Quality, HR, Facilities, Legal, etc are *not* invited to forecast the future.
Secondly, the functions which IBP does invite are Sales, Marketing, Supply Chain, Finance and Executive – which are the *exact* same functions S&OP invites to the forecast the future. Hence the author’s hypothesis stands.