Integrated Business Planning (IBP)

The cycle adds two steps to the S&OP sequence. A product and portfolio review opens it with launches, delistings and range changes, so the demand review works with the products that will actually exist. Integrated reconciliation then prices the volume plan, compares it with the budget and the latest financial forecast, and quantifies each gap in revenue, margin and working capital in inventory. The management business review closes the cycle with decisions and an updated rolling forecast that finance uses instead of preparing a separate one.

• Product and portfolio review – launches, delistings, range and pack changes.
• Demand review – statistical baseline, promotions, customer and market input.
• Supply review – capacity, materials, lead times and inventory targets.
• Integrated reconciliation – the plan in money against budget and forecast, gaps with options.
• Management business review – decisions, assumptions logged, one plan for the company.

IBP in practice

The difference from S&OP shows when volumes hold and the money does not. Suppose the unit plan for a quarter matches the budget, but the share of volume sold on promotion rises from the budgeted 20% to 30% at an average discount of 25%. Revenue then sits 7.5% below list‑price value instead of 5%, so the same units deliver about 2.6% less revenue than budgeted, and promotional margin falls further. A cycle that reconciles in units signs this plan off; IBP shows the gap at the reconciliation step, while it can still be closed through the promotional calendar, the price or the budget itself.

The process needs one product and customer hierarchy shared by the financial and the operational plan. Where finance budgets by brand and cost center while sales plans by customer and item, mapping the two is the first piece of work; without it, reconciliation turns into a debate about whose numbers are right. Renaming the S&OP meeting to IBP without giving finance ownership of the gap does not change the decisions it makes.

Logio designs the cycle – steps, owners, decision rights, the hierarchy that links volume and financial plans, and KPI – as part of a supply chain management engagement. The statistical baseline for the demand review comes from demand forecasting in Veritico STOCK per item, store or warehouse and day; for production constraints in the supply review see capacity planning.

Related terms

• Sales and Operations Planning (S&OP)
• Demand Planning
• Product Portfolio Optimization
• Promotion Effectiveness
• Master Production Schedule (MPS)