Integrated Business Planning - Continuous Improvement


Published by Jan Veerman, last updated on

This is blog 5 in a series of 9 on the topic Integrated Business Planning (IBP). In these blogs we will detail our IBP Framework, the importance of a proper IBP implementation and the benefits it can bring organisations. Topic of this blog: Continuous Improvement.


Continuous Improvement

So we set the company goals for the next years (Strategy), we have created financial plans in more detail for the next one to two years (Finance) and we connected the departmental processes like HR, Sales and Supply Chain via financial planning to the strategic goals. But how do we make sure we build in a feedback loop to test the outcomes of the operational process, the outcomes of the actions taken and the work performed are in line with the strategic intention? And that the outcomes are qualitative in line with the expectations? We need to have a feedback loop that continuous checks the outcomes with the set goals and create the ability to adjust where needed. The Deming cycle!


Deming Cycle

The Deming cycle is called after mister W. Edwards Deming who applied this process to management practices in Japan in the 1950’s. The Deming cycle consist of four steps:
  • Plan
  • Do
  • Check
  • Act
It is also called the PDCA-cycle after the first letters of the four steps. Each step will be explained in more detail below
Planadigm - IBP - Continuous Improvement


What needs to be performed, by who and by when to achieve the strategic goals. What should be the quality level of the outcome of the process? The questions need to be answered in the Plan-phase. This requires forward looking abilities and translate the strategic goals into tactical and operational plans. In previous blogs, the process to detail high level plans (strategic) into operational plans is explained. Most companies have this process in place where the yearly plans are broken down in departmental plans.



Once the plans are in place, action needs to be performed! In this Do-phase, the plans come to life by performing the required actions. Supply chains actions could be very operation (demand – supply balancing), but also a more tactical to strategic approach, like the improvement of the quality of the output (less scrap, less faults, a higher yield). All actions should be aligned with the strategic intent to reach the set goals.



Once actions are put in place, outcomes are generated. In this Check-phase, the outcomes are checked with the set levels of quality, of performance according plan. Here the continuous improvement kick ins. Did the actions delivered at minimum the quality we set as an organisation. If not, why not. What can be improved. Any actions part of the process in the D-phase can be analysed and should questioned as follows:
  • What went well? Continue or improve.
  • What went wrong? Improve or stop.
  • What do we need to start? To improve the quality even further.
This Check-phase needs to be performed on a regular base. At operational level, a monthly feedback loop is recommended, to keep a close watch on the process and the deliverables of these processes. Documentation of the expected versus the actual outcomes should take place as well as the decision made to improve.



In the last step the actions are set in motion to implement the changes needed from the previous phase, Check. What actions do we need to take to get back on track with the strategic intent? What improvements need to be made to stay on course? This last step links back to the strategy and closes the PDCA-cycle.


An organisation is like a plane taking off to it set destination. During the flight, the plane is constantly of track, but the (auto) pilot makes small corrections during the flight to stay on track. To make sure the city of destination is reached instead of a complete different destination.


The same goes for Integrated Business Planning (IBP). The PDCA-cycle makes sure constant checkpoints are build into the process to check if the company is on track. If not, adjustments are made. And the sooner these adjustments are made, the better. So a periodic and frequent PDCA-cycle is a must to keep the organisation on track and to make sure the organisation learns and grows.


In our next IBP blog, we will discuss the internal resources People – Process – Tools – Analytics that support the IBP process.
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