IBP and Mining
Some common ways Integrated Business Planning (IBP) is or could be used by the North American mining industry to increase operational efficiency include conducting extensive what-if analysis, maximizing performance and minimizing cost through process integration, and process optimization.
How IBP Increases Operational Efficiency
- Integrated Business Planning (IBP) requires extensive what-if scenario planning across various planning horizons and across the entire organization.
- This extensive what-if scenario analysis and planning helps improve operational efficiency as new questions lead to new answers, leading to unmatched value in every aspect of the value chain.
- A mining company that applied IBP in its operation was able to identify and answer several what-if questions such as: "What if we need to move from one raw material to another, over the next several years? What if we want to expand into new opportunities. Where should we be investing? What if we make changes in design, materials, and production. How will it affect short- and long-term planning? What if new capital expenditures are required today and in the future? What if we made acquisitions instead of more capital expenditure projects?"
- These what-if scenarios enable mining companies to find optimal solutions as well as to optimize existing business processes.
- In many cases, "what-if scenario analysis is what allows companies to integrate their supply chain plans with finance, manufacturing, procurement, sales, marketing, etc."
- This, in turn, helps maximize operational efficiency in many ways such as reduction of working capital; optimization of logistics, procurement, and capacity; improved collaboration, risk mitigation, forecast accuracy, and planning agility; and reduced planning time frame.
Minimizing Cost and Maximizing Performance
- Another way IBP could help the North America mining industry to increase operational efficiency is by simplifying "the costing of each production line by pulling together data from multiple sources automatically without the need to rely on spreadsheets from each department."
- Also, IBP makes budget standardization across various departments easy and seamless through improved workflow processes and organization, creating transparency and control.
- IBP also provides "clear visibility into variables such as labor and machinery in order to accurately match capacity with resources required for production."
- IBP also provides visibility into the supply chain process, making it easier to understand decisions that negatively impact KPI adherence.
- Mining operations are generally complex. IBP creates a single planning and optimization solution that "helps to increase the ability to understand decisions, and how they lead to KPI overall adherence."
- Integrated Business Planning can enable coal producers in North America to optimize the entire operation, starting from mine production through optimizing demand, supply, and financial planning.
- IBP takes into consideration every customer nuances such as considering each customer's preferred product mix as well as which customer(s) to supply at any given time to maximize operational efficiency.
- A mining company that changed from normal S&OP approach to IBP noted that it started incorporating specific steps into its decision-making process and "no decision is taken until all participants have agreed — this includes sales, marketing, production, logistics and finance." This led to about 80% decrease in planning effort compared to previously.
- IBP helps decreases the chances of duplicate processes that sometimes arise from siloed operations, minimizing costly inefficiencies and keeping projects on budget.