During the pandemic, ZAGG worked with Oliver Wight to implement integrated business planning. Having weathered the storm, the deployment has since been launched and has enabled ZAGG to improve its strategic planning and ensure the sustainability of its results.
Founded in 2004, ZAGG had become a global name in mobile device accessories and technology. The company provides products like InvisibleShield, Mophie and ZAGG for smartphones and tablets. In recent years, the US-headquartered company had become a victim of its own success. As sales rapidly increased to more than $500 million, it became more difficult to fill orders efficiently without shrinking profit margins.
At the same time, the communications to be coordinated between business functions have become increasingly complex. The company’s top executives, Chris Ahern and Jim Kearns, quickly realized that this way of working would prove unsustainable – each function feeling like it was “running on its own treadmill set to the fastest speed possible.” high”.
“In my experience, when you see such energy, the company needs to plan better,” Kearns explained.
As the company sought to better integrate the plans of each business function and expand its view of the business to plan over a much longer horizon than just the orders that would be received and shipped for the current quarter, integrated planning activities (IBP) has become obvious. Solution. This approach aligns strategy, portfolio, demand, supply and the resulting financial data over a potential planning horizon of more than two years.
However, the IBP deployment proved easier said than done, not least because it coincided with the early stages of the global pandemic. In response to the emergence of the Covid-19 virus, China extended its New Year holidays, which meant that expected shipments from Chinese suppliers to ZAGG were delayed. Over the next three months, as the virus spread further, retailers – major sellers of ZAGG products – closed stores or drastically reduced customer traffic in markets across North America, Europe and America. Asia.
While this may have deterred some business leaders from moving forward with an implementation like IBP, ZAGG was encouraged to move forward by consulting partner Oliver Wight. ZAGG executives were told that many of IBP’s best practices can also be deployed for near-term planning, improving agility and responsiveness to disruptions. Shortly thereafter, ZAGG decided to move forward with the implementation of IBP.
The advantages of IBP
Like the majority of business methodologies, IBP is deployed with the ultimate goal of maximizing a company’s profit and/or cash flow, while minimizing risk. It seeks to translate desired business outcomes into financial and operational resource requirements, bringing together different planning elements into a single process.
This approach can help businesses gain the agility needed to quickly process data and make smart, informed decisions. As such, they can react quickly to changing markets: essential for many companies looking to adapt to disruptions such as climate change, pandemics and global financial crises – and come out on top. as the economy recovers.
According to Mike Snape, Partner at Oliver Wight, a successful IBP requires three key elements.
- A company should seek to centralize, standardize and integrate processes across all business units and functions to enable streamlined workflows and help employees work more efficiently and collaboratively.
- A business should ensure that it has the right technology infrastructure to facilitate this way of working: advanced business software, such as the SAP Integrated Business Planning for Supply Chain solution, enables employees to efficiently perform day-to-day tasks, while establishing a “single source of truth across the organization”, further contributing to standardization.
- But, as with any business transformation, the installation of an IBP methodology in a company relies on one last crucial element. Despite all the well-meaning planning or sourcing the best technology a company engages in, all can be wasted without supporting cultural change in an organization.
Snape explained, “Comprehensive, integrated processes guide employee behavior so that they work as efficiently as possible – in accordance with the key requirements of each task – while enabling tracking, monitoring and reporting on key KPIs. . However, if processes are disjointed and unreliable, people invent their own ways of working with silo-centric KPIs and definitions of success. »
“This behavior leads to a proliferation of spreadsheet-based management systems, creating silos of data that can complicate reporting.”
With over 20 years of manufacturing experience, Snape helps Oliver Wight customers increase business productivity while reducing overall costs. The IBP has become an important facet of this – and so knows full well that focusing on education and detail, as well as building engagement with people, is key to ensuring that any improvement in methodology is maintained over the long term.
This type of knowledge transfer was critical to the success of ZAGG’s IBP deployment. In a typical engagement, the client company does the design and implementation work, meaning dependency is not created on the consultancy – while Oliver Wight helps assess the weaknesses and put in place training mechanisms to support the deployment and future operation of the new model. This approach also helps the client to better develop sustainable processes independently.
With ZAGG, Oliver Wight conducted a readiness assessment, followed by leadership and management team training. Once it was understood what IBP is and isn’t, Oliver Wight held design workshops where the ZAGG project team defined how the IBP would work in the environment. by ZAGG.
ZAGG quickly felt the benefits of this approach – and the support it received for deploying the IBP amid the pandemic. It provided a framework for survival in unprecedented times. ZAGG business leaders and managers also now have the experience with IBP to confidently respond to the anticipated resumption of business – without compromising customer loyalty and margins.
Meanwhile, with a stronger second half of 2020 following the initial Covid-19 shock, ZAGG executives were able to plan reductions in discount activity and returns in 2021 and beyond.
This respite allowed ZAGG executives to assess the effectiveness of their corporate strategy. Realizing that his strategies needed to be refined to help the company achieve its full potential, especially in the longer term.
Fast forward to today, and the ZAGG organization as a whole is more aware and more responsive to margin improvement activities. The firm’s strengthened position has also attracted investment. ZAGG was acquired by a group of buyers led by Evercel in 2021, allowing it to dream even bigger for the period ahead.
Jonathan Downer, senior vice president of global sales, said: “I feel better about our plans for 2021 and 2022. We are already making assumptions about 2022. We have expended much less energy than ever before and have a degree much higher confidence. in these regimes. We feel so much better prepared than in the past.
Throughout the launch of the IBP, Oliver Wight provided coaching, feedback, problem solving and mentoring to ZAGG. Consultation and follow-up advice have continued as needed, but the consultancy has already made a good impression on its client.
“Right from the start, Oliver Wight was honest in telling us that they’re not doing the job that the ZAGG organization is supposed to have. They coach while the client does the work. If Oliver Wight had implemented IBP Cycles 0 and 1 without our participation, we would not have been able to make the second quarter business decisions that saved ZAGG,” concluded Erin Wilson, ZAGG IBP Manager. .