Six Sigma approach to Integrated Business Planning (IBP)
A structured methodology for implementing IBP post-merger or acquisition
Often, organisations fail to identify the key priorities in a post-M&A environment and spread their efforts too thin across a plethora of initiatives. As a first step toward effectively prioritising initiatives, companies should analyse the business impact of various supply chain improvement opportunities and assess their ease of implementation. A Deloitte study that characterises business benefits from opportunity areas relative to their ease of implementation indicated that Integrated Business Planning (IBP) has a potential for delivering significant benefits. However, these benefits can only be realised if IBP is well executed—meriting a structured and disciplined approach.
Globally, over the last few years there has been a steady increase in mergers and acquisition deals1. In 2012–13 more than 35,000 M&A deals worth $2.8 trillion2 were executed across various industry sectors.
Despite the significant growth in M&A transactions during this period, less than 50 percent have been successful. While conflict in the corporate culture and poor due diligence are some of the typical reasons for failures, inability to realise potential supply chain synergies between the two merging companies has also been a key reason for M&A failures.
Studies suggest that up to 50–60 percent of M&A synergy is linked to the supply chain performance3.
A structured approach for effectively implementing an IBP process in a post-merger environment first requires characterizing the key elements of IBP (green arrows) and then defining the dimensions through which they need to be analyzed (blue circle).
Download the PDF to learn more about the Six Sigma approach that can help supply chain leaders develop a structured mechanism that can be applied to prepare to execute an effective IBP process post-merger or acquisition.
1Understanding Supply Chain Operational Drivers in Mergers and Acquisitons, John Saraan and Jagjit Singh Srai—Institute of Manufacturing, University of Cambridge
2Deloitte Monthly M&A Update Report March 2013
3Deloitte POV: How companies can improve value through M&A 2013