This paper considers the role of the fourth step in the IBP process, the Integrated Reconciliation Review (IRR). In the IRR, the unresolved issues from the previous three steps are filtered and, where they cannot be addressed, prepared for escalation.
This series of white papers looks at how to integrate the business strategy with operations in an organisation through the Integrated Business Planning (IBP) process. A mature IBP process can operationalise and deliver individual business unit and functional strategies and plans in line with the overall corporate objective.
The first paper in this series, ”Connecting Strategy to Execution,” introduced this concept using an analogy of portfolio investment for retirement planning. The three subsequent papers focused on the responsibilities of the first three steps in the Integrated Business Planning process – The Portfolio Review, The Demand Review, and The Supply Review – in delivering a return on investment in line with business goals.
Through their respective IBP Reviews, the portfolio and demand teams are responsible for considering the market, which products should be introduced or retired, their impact on demand, and how to meet customer expectations and improve performance. The supply team, meanwhile, evaluates what it will take to meet the request for product from the portfolio and demand teams in terms of manufacturing, labor, distribution, and logistics, as well as the cost and service implications. They will decide if the supply plan can meet the demand plan within the confines of the supply chain strategy and available resources and provide alternatives if not. Across all these reviews, assumptions, risks, and opportunities (AROs) are documented and managed.
This paper considers the role of the fourth step in the IBP process, the Integrated Reconciliation Review (IRR). In the IRR, the unresolved issues from the previous three steps are filtered and, where they cannot be addressed, prepared for escalation to the MBR. The IRR is also where the comprehensive operational plan is financialised and compared to appropriate commitments, e.g., annual operating plans or strategic plans, to identify gaps. Identified gaps and recommended actions to close them are also escalated for decision by the executives in the MBR.
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