The Synchronization Imperative for Vertically Integrated Titans with SAP IBP: Part 2

In Part 1 of our interview with Cameron Schwartz, Director of Digital Supply Chain in the SupplyChainPaths practice at CloudPaths, we explored the inherent planning complexities within vertically integrated giants and SAP Integrated Business Planning’s (IBP) robust synchronization. However, achieving this level of multi-level, synchronized harmony with SAP IBP isn’t without its challenges.

Stumbling Blocks to Sidestep

Schwartz pointed to two major areas where companies can face barriers. First is the sheer scale of information involved. “Typically, the large data volume can be one of the biggest stumbling blocks,” he cautions. “Vertically integrated companies are data factories, generating mountains of data for everything from large, finished goods to tiny components.”

Without impeccable controls and data governance, the dream of a clean, reliable dataset for synchronized planning can quickly become a nightmare. Schwartz stressed the importance of a consistent set of master data and controlled processes for new product introductions, noting that if everyone could load new products or add new data, “then you can have mistakes in your dataset.”

The second stumbling block is the human element. According to Schwartz, trying to catch stakeholders up just before going live is a recipe for frustration and a system that may not fully meet diverse business needs. In sprawling global organizations, with planning teams potentially scattered across continents, ensuring everyone is on board and trained and understanding of their requirements from the outset is crucial. “Having that shifted earlier into the process of the project, before it becomes critical will result in success at the end,” he advised.

The Modern Imperative

The turbulent global economic environment today – characterized by shifting geopolitical landscapes, fluctuating tariffs, intricate logistics networks, and increasingly price-sensitive consumers – makes synchronized planning a necessity rather than a luxury.

Consider the impact of a sudden tariff change on a specific imported component. Understanding the full financial and operational impact can be a slow, manual, and error-prone scramble in a non-synchronized environment. With SAP IBP, however, Schwartz noted, “You can effectively make a what-if proposal like ‘What would be the difference if I have a 20% tariff on a particular item versus a 10% tariff?’ and make parallel plans for the entire supply chain.” This allows businesses to see how such a change would affect budget allocations, product sourcing, and product allocation.

The Secret Sauce to SAP IBP Success

CloudPaths, operating deep in the trenches of these complex implementations, has developed what Schwartz called their “secret sauce” of the SupplyChainPaths practice. A key ingredient is cross-functional design thinking. This means getting stakeholders from different areas in a room at the beginning of the SAP IBP implementation project.

Schwartz observed, “You’d be surprised at how little different departments talk to each other.” Facilitating these conversations can uncover hidden synergies and ensure the IBP solution is holistically designed.

Another vital component is making SAP IBP accessible for users early. “We implement our CloudPaths Accelerators to make SAP IBP viewable and usable as quickly as possible,” Schwartz explained. “This ensures that when stakeholders are involved in requirements gathering, everyone has the end picture of what it would look like in their minds.”

Kennametal’s Breakthrough with SAP IBP

At the recently concluded SAP Sapphire event in Orlando, Kennametal shared the story of how it is successfully implementing SAP IBP with the guidance of CloudPaths. The large, vertically integrated metals company faced the challenge of having sellable products at each level of its supply chain. “Synchronized planning with SAP IBP enabled them to balance competing requirements into one plan,” Schwartz said.

The results? “Their inventory plans will deliver big savings on overall inventory volumes,” Schwartz reported. He added that this in conjunction with expecting to maintain an impressive 95% on-time performance.

What This Means for SAPinsiders

Embed data governance and stakeholder engagement from Day Zero. SAP professionals should institutionalize the principle that proactive data governance and early stakeholder involvement are foundational. This mirrors CloudPaths’ successful methodology, which emphasizes focusing on data governance early and initiating cross-functional design thinking with all relevant stakeholders at the very outset. This approach mitigates risks and builds a comprehensive solution.

Showcase SAP IBP’s adaptive planning capabilities. Move the conversation beyond SAP IBP as a planning tool to SAP IBP as a strategic imperative. CloudPaths enables clients to build adaptive plans by leveraging SAP IBP’s scenario modeling for real-world volatilities like tariff changes. Professionals can demonstrate this value by guiding clients to configure SAP IBP, using techniques like early system exposure via accelerators to make these adaptive strategies tangible.

Accelerate SAP IBP adoption and alignment. To ensure SAP IBP projects deliver their full potential, SAPinsiders should adopt and champion methodologies that speed up understanding and foster unity. This means actively using solutions like CloudPaths’ Accelerators. These tools make SAP IBP viewable and usable swiftly, ensuring that all departments share a clear end picture for aligned and effective SAP IBP implementations when coupled with cross-functional design thinking workshops.