joint business planning - ifmaworld.com jbp industry report.pdf · joint business planning process...

JOINT BUSINESS PLANNING A Best Practices Approach for Operators and ManufacturersIn 2015, the International Foodservice Manufacturers Association (IFMA) and The Partnering Group (TPG) led the foodservice industry including manufacturers, operators and agencies in the collaborative development of a new industry best practices process for Joint Business Planning (JBP) to benefit the consumer’s choices in the marketplace. This group of practitioners assembled as a ‘Board’ — with the primary purpose to create a new, more effective way of collaborative planning between chain operators and manufacturers. The purpose of this report is to share an overview of the new best practices process created by the Board.

n IFMA’s vision is to win

the consumer’s choice

for foodservice. Joint

Business Planning gives

us a platform for

winning together!

The Partnering Group

© 2015 The Partnering Group, Inc.

October 2015

thepartneringgroup.com • ifmaworld.com

To develop this new best practice process, the Board assembled three times over the course of five months for full-day sessions. The process development meetings were led by TPG and the content was documented by TPG and IFMA. In a ‘diverge-converge’ methodology, the Board gave input – TPG and IFMA documented that input and created strawman content – and the Board then refined and finalized the content. This methodology was used for each step of the work.

Board and Methodology:

2 © 2015 The Partnering Group, Inc.

JBP - Why is foodservice different?

The consumer relationship is mostly owned by the foodservice operator in this business. This is very different from the grocery area. Manufacturers and operators must work together to co-create value to win the consumer’s choice. For years the industry did not consider the importance of collaboration to be a high priority. However, since 2007 we have all learned the importance of leveraging each other’s strengths.

IFMA’s Vision is to win the consumer’s choice for foodservice. Joint Business Planning gives us a platform for winning, together!

Larry OberkfellPresident & CEOInternational Foodservice Manufacturers Association (IFMA)

JBP -‐ Why is foodservice different?

The consumer relationship is mostly owned by the foodservice operator in this business. This is very different from the grocery area. Manufacturers and operators must work together to co-‐create value to win the consumer’s choice. For years the industry did not consider the importance of collaboration to be a high priority. However, since 2007 we have all learned the importance of leveraging each other’s strengths.

IFMA’s Vision is to win the consumer’s choice for foodservice. Joint Business Planning gives us a platform for winning, together!

Larry Oberkfell President & CEO International Foodservice Manufacturers Association (IFMA)

Operator-Manufacturer JBP Best Practices Board

Historically, the relationship between operators and manufacturers has been defined as ‘buyer-seller’. The industry is at a key tipping point where many practitioners are recognizing the value of improved collaboration. Due to that fact, IFMA and TPG saw the need for a new model – and the Operator/Manufacturer Collaboration Model (OCM) was created.

This model, created by a committee of operators and manufacturers – resulted in a new approach to segmenting operators and manufacturers within the foodservice space. Once a segmentation model is populated and an organization has made choices on levels of collaboration, the next logical step is joint business planning. The understanding of that fact by the OCM committee was the impetus for the Joint Business Planning Best Practices Initiative.

At its core, OCM is about creating better alignment between operators and manufacturers by establishing clarity between the current state of the relationship and defining the desired future state for both parties.

To enable this, the OCM Pyramid was developed, which segments operator-manufacturer relationships into four types (Strategic, Collaborative, Preferred, Transactional). As users move up the pyramid, from Transactional to Strategic, the relationships become more involved; more collaborative; and more strategic in nature.


OCM Provides Best Practice

n Common Language

n Frameworks

n Process

n Metrics

To:

n Assess value provided and support available, in order to

n Segment Suppliers and Accounts, to enable

n Joint Business Planning and Relationship management

n and the Allocation of resources against the right opportunities

OCM Relationship Pyramid

Background: OCM (Operator/Manufacturer Collaboration Model) as a Pre-Cursor to JBP:

The JBP Board identified five objectives for this industry initiative:

1. Create the definition of Operator-Manufacturer Joint Business Planning (JBP)

2. Build a Best Practices JBP Process that the industry can use in building better corporate-to-corporate business plans

3. Develop a common set of JBP worksheets to guide future practitioners

4. Author a best practices report that documents the work of this Board

5. Engage the industry through a collaborative approach to securing content input and sharing learnings

JBP Industry Initiative Objectives:

Deliverables and Approach:

This breakthrough work took place over a 5 month time period and included ‘heavy lifting’ around process development and worksheet creation. The deliverables and approach are detailed in the image below:


“Foodservice Joint Business Planning is an ongoing collaborative process for partners to identify, prioritize and execute mutually advantageous initiatives intended to improve patron’s experience and drive financial results.”

JBP Best Practices Initiative - Deliverables & Approach

JBP – An Operator’s Perspective

As an operator, we have supplier relationships ranging across the four levels of the Operator/Manufacturer Collaboration Model Relationship Pyramid. We understand the importance of corporate-to-corporate planning with the suppliers at the higher levels of the pyramid. It’s because of this that we decided to sit on the Joint Business Planning Best Practices Development Board.

The opportunity to formalize the Joint Business Planning process is going to be extremely helpful moving forward. In the past we did business reviews which are look backs rather than planning for the future. As a chain that is growing 20% + per year it is critical that we embrace looking forward together for us all to be successful.

Matthew RiddlebergerVP of Supply Chain ServicesFirehouse Subs

JBP Definition:

The Board was unanimous that the definition for foodservice Joint Business Planning needed to specifically call out the idea of collaboration as a key driver for successful corporate-to-corporate planning. Additionally, it was deemed essential to focus on benefiting the needs of patrons in addition to the desired financial benefits expected from the outcome of a JBP plan.

Following several revisions by the Board, below is the final definition adopted for the industry:


The JBP Best Practice Process

Every business planning process requires clearly defined steps to which all stakeholders are aligned. Prior to developing a best practice process for foodservice JBP, the Board set guardrails to help focus the development. These included the following:

1. There would be only one process. In early discussions, it was suggested that the team build a second “JBP-Light” process for smaller projects or for use in Transactional or Preferred relationships. The Board decided this added un-needed complexity and that one master process was sufficient, and that it could then be applied as desired by the users.

2. There should be an “Approvals Gate” between each step to ensure all parties are aligned to the outputs and decisions before proceeding to the next stage.

3. The process is ongoing with the learning from any one initiative’s execution potentially impacting the overall relationship.

4. The JBP process, by definition, is designed for the top three levels of the OCM Relationship Pyramid: Strategic, Collaborative and Preferred, and not designed for Transactional relationships. If trading partners in a Transactional relationship decide to undertake joint business planning, that relationship should then be viewed as one step higher – Preferred.

5. A supplier of a given category could have a Transactional relationship with one chain account and a Strategic relationship with another. The pyramid level is determined by the relationship, not by the category.

Foodservice JBP Best Practice Process

n The foodservice JBP best practice process has five steps, beginning with Discovery & Alignment and ending with an assessment called Review & Refine. See the accompanying diagram: “Foodservice JBP Best Practice Process” for details on the full process.

Step 1: Discovery & Strategic Alignment - Step 1 in the JBP process involves the operator and supplier sharing corporate strategies, capabilities, insights and available resources. Collaboration, trust and a higher level of information sharing are crucial to the success of JBP. This first phase is about sharing and discussing information that may not have been provided before. The Board was passionate about the process promoting a greater level of transparency and information sharing and felt that was the key to uncovering and aligning on richer opportunities and initiatives*.

Also in this first step, participants are asked to gain alignment on the OCM Pyramid position (Strategic vs Collaborative, etc.) and use the OCM Support Matrix, and its 11 areas of support, as a document for discussion. Agreement between trading partners on the status of the relationship is important to understanding the areas of value and opportunity and to building a productive working relationship.

The final component of step 1 is to identify and prioritize a list of common opportunities. Opportunities can be framed in many different ways. For example, they could be based on a desire to build a risk management and procurement strategy for a commodity category. They could come from an operator’s strategic plan to revamp a portion of their menu. They could also come from an idea a supplier has for the introduction of a new piece of equipment to streamline the kitchen operation or improve product consistency.

Step 2: Goal Setting & Initiative Design - In this second step the parties review the list of prioritized opportunities and decide which initiatives to work on first. Initiatives, as defined by the Board, are a more specific articulation of an opportunity. For example, if the operator is looking to revamp their breakfast menu, the resulting initiative could be launching a line of on-the-go high-energy breakfast wraps.

Once the priority initiative(s) are determined, a scorecard is built that includes specific goals and due dates. These high-level scorecard elements will be used to guide the development of the tactical plan and timeline in step 3.

The final component of step 2 is to build a joint team.

Step 3: Tactical Development & Testing - Step 3 is a critical phase that involves two components: Building the tactical roadmap and then executing against it. This can be a lengthy step since the duration is determined by the complexity of the tactical development required.

The timing of step 3 could be short, perhaps a few weeks, if the initiative is more immediate in nature (e.g. to build a new process for commodity purchasing and pricing). Conversely, this step could be lengthy if the initiative involves R&D time to develop and test a new product.

Step 4: Launch - Once the tactical development and testing is complete, operator-supplier teams are ready for step 4, the launch. Launch of the initiative could take several forms. Again, level of involvement is dependent on the spirit of the initiative. Launch could be driving a new product forward or a promotional execution into the restaurants. Launch may also involve the rollout of a new kitchen process or the introduction of a new piece of equipment or a new training process for staff.

Step 4 involves two distinct components. The first is the development of the launch plan, which includes a simple action plan of timing, resources and people responsibilities. The second component is the actual execution, rollout or implementation of the initiative.

Step 5: Review & Refine - The final step in the foodservice JBP process involves collecting and analyzing both quantitative data (units, sales) and qualitative data (staff and customer feedback) and then populating the scorecard. This data is then used to discuss and assess the successes and opportunities for improvement, both in terms of the initiative itself and in terms of the overall relationship.


The Process Steps

* Shared information would not include confidential or proprietary information of other third parties. Any shared information may need to be subject to appropriate confidentiality agreements.

Throughout the development of the JBP best practice process, the Board discussed the idea of building the operator-supplier relationship versus the development of specific initiatives. It was agreed that the JBP process is actually about doing both: Building and evolving the relationship and executing initiatives, to the benefit of consumers.

The “Flow of Ongoing Work of a JBP Relationship” diagram, below, portrays how steps 1 and 2 are about building the relationship and deciding upon joint initiatives, and that steps 3, 4 and 5 are about executing those initiatives. It also highlights how feedback gathered in step 5 can impact all other steps, both related to the initiative itself and to the overall evolution of the operator-supplier relationship.


The Ongoing Work of a JBP Relationship vs. Specific Initiative Execution:

Flow of the Ongoing Work of a JBP Relationship

The JBP Process and its Fit with the OCM Pyramid

n The JBP process is about

building and evolving

operator-manufacturer

relationships - and about

executing initiatives.

How the JBP Process Fits with the OCM Pyramid:

As to what levels in the OCM Relationship Pyramid should JBP be used? This was a question that received considerable debate among the Board members. In the end, it was agreed that this JBP process was designed primarily for the top two levels of the pyramid – Strategic and Collaborative – but that specific initiatives could involve the third level: Preferred, as shown in the diagram “JBP process and its Fit with the OCM Pyramid” (left).


As part of the JBP best practice process, the Board developed a list of inputs and outputs for each step, which are outlined below, in the diagram “JBP Process Inputs and Outputs”. A commitment by practitioners to providing these inputs is critical to the success of the process.

The inputs involve various types of data, including resource assessments, research and insights, testing protocols and feedback required to feed each step in the process. The desired outputs drove the creation of the JBP Worksheets that are described later in this report.

Inputs and Outputs:

JBP Process Inputs and Outputs


Areas of Organization Expertise Required:

It’s important to note that the specific roles and functional areas that each trading partner would engage as part of the JBP team will vary depending on the company and their JBP objectives. Unique structures on both sides of the relationship require individualized participant functions based upon their specific roles and capabilities, as well as the desired outcomes of the JBP.

For the process to be successful, it is recommended that each company first identify a JBP Leader, Steering Committee, Action Team and likely Ad Hoc Participants.

To the right is a summary of expectations of those roles and who would likely contribute during the JBP project.

JBP Leader – The JBP leader is the primary point of contact for each organization and is responsible to deliver the JBP requirements. The JBP leader is responsible for facilitating internal and joint meetings, driving off-line actions and follow up where needed. They will assure all internal teams are fully prepared in advance of the scheduled collaborative sessions and will be responsible for the creation and communication of the project plan as well as periodically updating the teams on progress, roadblocks and revisions to the plan.

The JBP Leader role is typically served by a Senior Account Manager on the supplier side and a high level leader in the category management/supplier management area within the operator’s company.

The JBP leaders will work across all 5 phases of the process and will have a deep understanding of the goals, initiatives, tactics and other key plan objectives.

Steering Committee – The steering committee should be comprised of senior leadership of both organizations, so that when resources are required, or decisions need to be made, the JBP team will have the key stakeholders and decision makers involved to assure continued progress. The steering committee will meet throughout the project as needed, to assure what is expected is what will ultimately be delivered.

The typical roles that would likely serve on the steering committee on the supplier side would be the Division President, Head of Sales, Head of Marketing or Head of Finance. On the operator side, the steering committee participants would likely include the Head of Supplier Management, Head of Marketing, Head of Finance or Head of Operations. Action Team – This team of participants is responsible for the ‘in-the-trenches’ work during the life of the JBP project. They are the primary content contributors for the project and will be responsible to make the near-in decisions on a regular basis to assure the JBP stays on track.

The Action Team will contribute to 80% of the process steps and will have an important role in bringing the JBP objectives to life during the duration of the project.

Ad Hoc Participants – These members will be engaged on an ‘as needed’ basis and will most likely contribute to the JBP when their specific area of expertise is required (SMEs – Subject Matter Experts). There may be instances when initiatives having specific tactical requirements would dictate contribution from an Ad Hoc participant. Given that each JBP relationship and objectives will be unique, this team will be fluid in their participation but extremely valuable to the overall success of the JBP.

JBP Worksheets:


After creating the JBP best practice process, the Board felt it was critical to provide practitioners with a clear, specific roadmap to follow. To that end, the Board built worksheets to guide teams at each step of the process.

At the beginning of a JBP process, the JBP team should review the worksheets and determine owners. They should also determine if there are comparable tools already in place that could replace a specific worksheet. For example, some organizations have already developed project-planning tools or have a formal Project Management Office (PMO). Also, any customization needed to the worksheets should be discussed and agreed upon. As the JBP process progresses, owners will be responsible for completing each worksheet and making them available to the entire team.

Examples of two worksheets are provided below.

n The JBP toolkit contains

15 worksheets to help guide

practitioners in building plans

and executing initiatives.


Organization Productivity Model (OPM):

In developing and executing any new process, there will be organizational implications for companies that desire to embrace it. To ensure a high level of productivity and have the most efficient organization possible, one must look at six key areas and assess the need for changes or modifications. These areas within the OPM are Work, Insights & Systems, Talent Development, Performance Management, Roles & Structure, and Decision Making. Within each area below, you will find the implications of fully launching the JBP process into an organization.

Organizational Implications:

Doing the Work: Implementing a new or enhanced Joint Business Planning process requires an understanding of the associated changes in ‘work’. All work should take into account an internal and external lens on the situation and provide a solution to improve business results for both business partners. The Board determined that while a ‘SWAT team’ could be assembled to do this work on an immediate basis, much of this work is ‘new’ and would have organization design implications to do the work on an ongoing/frequent basis.

Insights & Systems: The activity of identifying insights to support JBP is a great step in the right direction based on Board dialogue. The insights required to support JBP on an ongoing basis may be in many different domain areas, including macro trends, consumer, marketplace, supply-chain, category and foodservice segments.

Some of these insights are readily available while some require future investment and capability. Additionally, while ad hoc teams can certainly assemble insights to identify opportunities or drive certain initiatives, today’s tools may need an ‘upgrade’ to do this work efficiently and on an ongoing basis. Net-net, any step toward insights to fuel corporate-to-corporate planning is a good step.

Talent Development: All team members will need to understand basic knowledge around OCM & JBP. Sales will need a higher level of strategic capabilities to start the discussion with their partners. Project Management Owners will need to be in place or have someone trained in Project Management to ensure the process runs smoothly. It will be important to get the right blend of culture and process to create a sustainable long-term process. Monitoring the implementation of the process by measuring results will be critical to making enhancements on the journey to implementing a successful Joint Business Planning process. Additionally, training and capability building programs are critical to ensuring JBP gets fully integrated into organizations.

Performance Management: Practitioners must identify key performance measures and align with their partner on targets, the timing of reviews and some form of ‘start-stop-continue’ decision process relative to execution. Having a collaborative scorecard in place is a key ingredient to JBP that all Board members felt was important for adoption of the process.

Roles & Structure: Doing JBP work on an ongoing basis certainly has implications on the roles and structure of an organization. To do work around insight identification, strategy creation and initiative development, the Board felt that it takes people with deep expertise in those areas. Roles need to be adjusted or created so that people ‘own’ that work on an ongoing basis. Additionally, the Board felt that based on the complexity of this issue, it “could be a project in itself”.

Below are a several must-haves related to JBP roles and structure.

• A JBP Champion should be in place to help drive cross-functional alignment.

• A Project Management Owner will need to be created and/or trained to keep all parties on time with their tasks.

• A senior level strategist needs to be in place to drive the strategies and initiatives within a JBP.

• An insights expert needs to be in place to fuel the opportunities and initiatives.

Decision Making: There should be clear identification of decision-making rights throughout each step of the process. This should be aligned to, as part of the JBP start up.

Collaboration and leveraging each other’s strengths is crucial to success. The time is now to drive Joint Business Planning within the foodservice industry.

Our Industry now has:

• A collaborative spirit that didn’t exist before

• A foundation for segmentation and allocation of resources

• Many sources of data that are available now to drive smart decision-making

• A Best Practices Process developed by top industry practitioners that clearly defines the work of JBP

• A set of Joint Business Planning Templates to guide teams in building their Joint Business Plans

The time is now.

JBP Call to Action:

TPG Contacts:

Doug Morrison [email protected]

Tim Hand [email protected]

Art [email protected]

Bob Baxley [email protected]

Brett Lopp [email protected]

IFMA Contacts:

Mike Schwartz [email protected]

Julie Heseman [email protected]


TPG and IFMA:

TPG and IFMA are committed to driving the utilization of this JBP best practice throughout the foodservice industry. TPG and IFMA are developing a comprehensive JBP Training course in order for foodservice practitioners to receive training on the most up to date platform, process and tools for joint business planning between chain operators and suppliers. More information on training can be found at ifmaworld.com.

The Partnering Group:

TPG is a practitioner-based, management-consulting firm with a focus on developing and popularizing Best Practices within industries. TPG’s work has revolutionized go-to-market strategies and planning processes within the Foodservice space.

JBP Industry Initiative Facilitators and Report Authors are: Art Bell, Bob Baxley, Tim Hand, Brett Lopp and Doug Morrison

TPG and IFMA Contacts:

For more information on JBP Best Practices or to obtain consulting support, tools, templates or training from TPG, contact:

thepartneringgroup.com

ifmaworld.com

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