07 Nov 2022
When Laminex Australia embarked on a journey to improve its business planning and execution process in late 2019, it was clear from the onset that its numbers were far from perfect. In fact, the organization had three or four sets of numbers, that nobody believed in. This ultimately affected its financial forecast accuracy. Fortunately for Laminex, a supplier of premium laminates and surface materials, things were about to change for the better. The organization partnered with Oliver Wight to implement an Integrated Business Planning (IBP) programme, which helped address a number of problems and resulted in multiple benefits, including improved forecasting capability. The Laminex executive team gives us its insights into the turnaround.
A diagnostic assessment conducted by Oliver Wight, revealed that the accuracy of forecasting at Laminex was being compromised by the use of multiple sets of data. Laminex CFO, Joe Nicolazzo, confirms, “We had all sorts of numbers in the business, which made trying to get an accurate financial forecast difficult. Everyone had their own view.” Unsurprisingly, this resulted in a lack of trust across the organisation.
Over two years the benefits of IBP became apparent. GM Supply Chain, Gerard Crosswell explains, “there were some issues in the first three-to-six months gaining trust in the data, but that started to go away. Our CFO drove that discipline in the finance team, which was key.” With Laminex running a single set of numbers there was an uplift in the company’s forward planning.
Graham Andrew, GM of Operations, reflects on how this benefited the demand side of the business in particular. “We are receiving much better data, which is helping us plan more effectively. In the past we would only have four months of information, now we are seeing out three years. We are not just seeing numbers, but also the assumptions behind the numbers, which is enabling us to understand what has changed and, more importantly, why there has been a change.”
The importance of assumptions is a view shared by Crosswell, “people understand that you don’t challenge the numbers, you challenge the assumptions, which drives confidence.” This is a great comfort to the CFO, “our forecast accuracy has grown to a strong level and our ‘one source of truth’ has undoubtedly helped that.”
IBP – the key to ‘one source of truth’
One role of IBP is to integrate people across the company, with finance in particular playing a pivotal part in a successful implementation. This integration provides finance with a more active role in the process and in review meetings. Finance should insist on one set of data to run the business and drive the integrity of the financial projections. Questions and assumptions behind the numbers can then be managed through the monthly IBP cycle, rather than offline or in separate forums. By properly using ‘one source of the truth’, this will drive ownership of the numbers, which enables the organization to consistently deliver to forecast, month-in, month-out. These are the benefits which are now being experienced by Laminex.
To find out more about the benefits of IBP read the Laminex story here.