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There’s quite a buzz around Integrated Business Planning (IBP) today. If you’re wondering why, just think back 20 years.

In the 1990s, if you wanted to create an operations plan, you had to start by generating a forecast based on customer needs. This enabled you to build the right quantity of products and manage your inventory appropriately. Your company’s forecast probably allowed you to develop a rough-cut capacity plan that looked out three to five years in the future. And you most likely conducted all your planning at the product family level.

These forecasts were a definite step forward from what had come before. But since the rough-cut plan was so high-level—and thus, so vulnerable to fluctuations—companies like yours were left with two challenges:

  1. Higher-than-expected demand left you scrambling to ramp up production.
  2. Lower-than-expected demand left you holding excess parts and finished goods.

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