Use SAP’s Integrated Business Planning Tool To Simplify Supply Chain Planning

A key requirement in supply chain planning is viewing and assessing demand and supply volatility created by internal and external factors. Viewing inventory across the network is also vital to a lean and tight supply chain.

Multi-brand Ownership Issues

Organizations that own multiple brands have several challenges to address:

• Aggregating product or merchandise demand across all brands especially when they share raw materials, and balancing against the supply base to determine bottlenecks in its extended supply chain
• Enabling retail brands to collaborate with contract manufacturers and raw materials suppliers across the globe
• Obtaining end-to-end visibility of supply and inventory across all the supply chain nodes globally
• Avoiding double buffering of inventory in the supply chain nodes while accounting for safety stocks
• Developing a process to unify demand, supply, financial and marketing plans into one set of integrated plans to drive maximum business value
• Balancing demand and supply
• Integrating financial planning and operational planning
• Linking high-level strategic plans with day-to-day operations

Non-Negotiables

We’ve also noted common “non-negotiable” themes from working with clients from different industries:

• Managing complex business models
• Managing demand and supply volatility
• Inventory ownership and optimization
• Collaborated planning and manufacturing
• Real or near-real time end-to-end visibility

Business Challenges

Organizations need synchronized processes running on a common platform that will provide one version of the truth. This paves the way for concurrent supply chain planning. Here are some challenges we’ve seen when that isn’t in place:

• Siloed planning with functional goals
• Lack of simulation capability to understand impact of business decisions
• Demanding customers and lack of lean supply chain
• Isolated planning resulting in over-buffering of inventory
• Long lead times in globally distributed supply networks
• Limited visibility over supply chain performance and the drivers

SAP Integrated Business Planning

A solution to these challenges is the Integrated Business Planning (IBP) module from SAP. This next-generation S/4HANA^® powered planning application helps companies engage stakeholders across the organization in a truly integrated planning process.

IBP is a cloud solution that enables connected and concurrent supply chain planning between finance, sales, marketing, planning & execution functions interweaving operational, tactical, and strategic plans. The connectedness also enables real-time visibility throughout the supply chain. Other benefits include:

• One business plan
• Increased efficiency
• Enhanced user experience
• Single source of truth
• Real-time simulation
• E2E visibility
• Advanced planning algorithms
• Faster planning cycles
• Analytics
• Collaboration

Synchronized Plans

The Integrated Business Planning module enables synchronized plans across time horizons, business processes, and organizational boundaries. The orchestration between demand, sales, finance, and marketing functions to generate consensus demand plans can happen in hours instead of days or weeks.

IBP lets you create new demand or supply plans every day. You can complete demand/supply planning for fast moving products multiple times a day.

Real-Time Integration

Real-time integration enables faster planning cycles with up-to-date planning data, and it’s available in SAP ECC or SAP S/4HANA’s order-based planning. Planners can transfer master data and transactional data to SAP IBP.

The feature captures planning-relevant data changes in the source systems and sends them immediately to SAP IBP. The results can be transferred back to the source systems using application jobs.

Increased Efficiencies

Time
Reduction in integration touchpoints between multiple planning groups.

Scenario Planning
Quickly run ‘what if’ scenarios across demand and supply processes defined for upside and downside scenarios.

Inventory
Eliminate double buffering of inventory with rightsized inventories and freed working capital. Reduce inventory obsolescence and spoilage through improved forecast accuracy and shelf-life planning capabilities.

Planning
Eliminate time spent on mining data from multiple systems. All the necessary data to analyze and make trade-off decisions is available in IBP unified data model. Leverage the data elements in demand and supply review meetings to support global sales and operations planning (S&OP) processes. IBP essentially enables one global supply chain planning, collaboration, and analytics platform.

INTEGRATED BUSINESS PLANNING Capabilities

Demand
Develop consensus demand plan by integrating volume and value forecast with insights from sales and marketing on new products, promotion, and sales plans.

Inventory
Develop multi-stage inventory optimization to coordinate inventories across all stages of supply chain to eliminate double buffering.

Sales & Operations Planning (S&OP)
Deliver a cross-functional sales and operations plan balancing the impact on inventory, service levels, and profitability.

Response & Supply
Respond to unexpected demand and/or supply disruptions with minimum latency by adjusting supply plans and fulfillment decisions.

Control Tower
Deliver supply chain performance by monitoring, measuring, and responding to supply chain alerts and metrics in real-time.

The New Normal

Since the 2020 pandemic, organizations across the globe are looking to address disruptions with demand and supply changes. They want to strengthen their operations in preparation for future value chain issues.

SAP IBP is a top shelf solution that enables companies to embrace the “new normal” in the complicated supply chain planning world.