End-to-End Supply Chain

Transforming Supply Chain Planning with CloudPaths

Reading time: 4 mins

Meet the Authors

Key Takeaways

⇨ SAP's digital planning tools are notably effective, especially with SAP Integrated Business Planning (SAP IBP) and functionalities such as Order Based Planning (OBP) and SAP Real-Time Integration (RTI) as they enhance and simplify both operational and tactical planning stages.

⇨ In SAP environments, operational systems like ECC and S/4HANA ERP play a crucial role as they handle transactional processes such as purchase and plan orders, feeding vital data to planning tools like SAP Integrated Business Planning (IBP).

⇨ CloudPaths advises clients on selecting the optimal supply planning algorithms, processes and methodologies based on their specific scenarios.

In the complex sphere of supply chain management, SAP’s digital planning capabilities stand out, particularly through SAP Integrated Business Planning (SAP IBP) and features like SAP Order Based Planning (OBP) and SAP Real-Time Integration (RTI), which optimize and streamline operational and tactical planning phases. These components are part of SAP’s broader suite, which encompasses modules for inventory, sales, operation planning, and supply-demand matching.

SAP’s planning framework offers two strategic approaches: operational and tactical planning. Operational planning focuses on a shorter timeframe, ranging from one week to four months, and involves detailed, order-level planning. In contrast, tactical planning spans two to three years, emphasizing broader, less granular planning cycles. In SAP environments, operational systems like ECC and S/4HANA ERP play a crucial role. They handle transactional processes such as purchase and plan orders, feeding vital data to planning tools like SAP Integrated Business Planning (IBP). IBP relies on this data to generate plans, which are then executed back in the operational systems.

Data synchronization between these systems can be file-based or periodic. However, Real-Time Integration (RTI), where systems are interconnected directly, allows immediate data updates triggered by changes in either system. This capability, initially one-way, has evolved into a robust two-way real-time data flow. The importance of real-time integration becomes particularly evident in operational planning phases. Here, OBP is critical not only for creating daily deployable supply plans but also for adjusting these plans based on real-time inventory and production data. This approach ensures that each element of stock is appropriately allocated against orders.

CloudPaths advises clients to define their strategy from the beginning, helping them to do an assessment of what is the best solution for them to solve different sets of problems. SAP has a plethora of different solutions that organizations can use, but it is important to know which solutions cater to which business problems. CloudPaths defines that with them and works with customers in assessing supply chain software as well, beyond the purview of SAP software to give them guidance in terms of whether SAP is the right fit or if they need to look for some other add on solutions to help with the specific use case. Once the assessment is completed and the strategy is defined, CloudPaths also offers end-to-end implementations and integrations within SAP and non-SAP platforms and helps clients leverage SAP IBP for various Planning needs.

With reference to IBP Response & Supply, CloudPaths advises clients on selecting the optimal supply planning algorithms, processes and methodologies based on their specific scenarios and key Supply planning pain. For clients who are already on SAP IBP Platform uncertain about choosing between various planning choices like Time Series Supply Planning or Order Based Planning, CloudPaths provides initial guidance on the functionalities of each option tailored to their use cases. Same approach is followed in defining Integration Strategies.

As Pratap Shinde, Director, Digital Supply Chain Management at CloudPaths emphasizes, “The first phase involves educating the client about the available functionalities and assisting them in making informed decisions about the planning tools and features that best suit their operational and business process needs. Once the client understands the options, we delve into a deeper analysis of their current systems and configurations to design a tailored solution to suffice current and future planning needs. This solution design encompasses selecting functionalities, outlining the process flow for planning activities, and determining how to effectively use their existing data, possibly requiring refinement of master data to enhance planning robustness. For example, recommending structuring product hierarchies to clarify product differentiation and streamlining supply chain processes. In scenarios requiring customization not available in standard solutions, SAP offers support through enhancements or custom development.”

Additionally based on the requirement and existing technical architecture, integration strategies are defined and technologies are selected. RTI is the approach that is recommended for organizations in the case of Order based Planning. While Real-Time Integration (RTI) capabilities are currently limited to SAP systems, efforts are underway to extend these capabilities to other ERP systems (Non-SAP Backends), enhancing the flexibility and reach of SAP’s planning solutions. This current and forthcoming functionality will enable broader system integration, making SAP a more versatile hub for integrating various executional systems with SAP IBP. It is crucial for companies considering these solutions to select the right partner carefully. A successful implementation depends significantly on partnering with a vendor who has robust experience in these areas.

Looking ahead, SAP is expanding RTI capabilities to integrate with non-SAP systems, which will broaden the applicability of SAP tools in diverse technological environments. This evolution is expected to foster more seamless integration across different executional systems, further enhancing the robustness and adaptability of supply chain planning. SAP’s OBP and RTI are pivotal in refining the precision and efficiency of supply chain operations. These tools not only facilitate detailed operational planning but also ensure that strategic planning aligns with real-time data and industry needs, thereby supporting businesses in achieving higher operational excellence and customer satisfaction

What does this mean for SAPinsiders

Here are some key pieces of advice for implementing Order-Based planning and RTI:

Selecting the Right Partner: Ensure your chosen vendor or SAP partner has a proven track record in Order-Based planning and RTI. The quality of execution is as crucial as the technology itself.

Patience and Planning: Be prepared for a gradual process. The design and initial implementation phase are critical. Start by clearly defining your goals and metrics. Throughout the project, keep these objectives in focus to guide the design and address potential execution challenges.

Data Management: Often, there is a disparity between the perceived quality of existing data and its actual utility in new systems. It is important to allocate time and resources to ensure that your data is accurately transferred and adapted for the new system. Involving your data management and procurement teams early on is essential for a smooth transition.

More Resources

See All Related Content