ifm Supply Chain for Planning and Execution Transformation

Reading time: 6 mins

Meet the Authors

Key Takeaways

⇨ Enhancing the primary ERP capabilities with "add-on" and "add-in" solutions functionality can help organizations improve their business processes and achieve strategic objectives.

⇨ ifm Supply Chain, an SAP partner for 25 years, natively integrates and deploys its supply chain solutions portfolio into the SAP ecosystem and offers an integrated approach to streamlining demand planning, production scheduling, procurement processes, and inventory control for superior efficiency through its GIB software.

⇨ The solution platform by ifm operates as an extension of SAP, offering sophisticated features for handling intricate business procedures, all while presenting a user interface that closely resembles SAP® S/4HANA, SAP® Cloud, or SAP® ECC system.

There is a big difference between an “add-on” and an “add-in” solution when extending core ERP capabilities with added solution functionality. Add-on solutions require data, people, and process integration, while add-in solutions are natively embedded in ERP and do not require costly and time-consuming integrations.

ifm Supply Chain, an SAP partner for 25 years, natively integrates and deploys its supply chain solutions portfolio into the SAP ecosystem. Founded in Germany in 1992 under the name GIB, the company offers an integrated approach to streamlining demand planning, production scheduling, procurement processes, and inventory control for superior efficiency through its GIB software. As stated by Eric Jones, Managing Director at ifm Supply Chain, “Our model is to keep the data in SAP, where it currently resides, keep the people inside of SAP and instead embed better tools inside of that system.”

In 2017, privately-owned German company ifm acquired GIB. The parent company ifm manufactures the physical hardware and components that enable factory automation. This includes sensors, edge computing components, and connectivity on the factory floor to gather and understand information from machine operations. So ifm acquired GIB to extend from the physical world into the ERP world and to create an end-to-end IoT solution.

Today, the following six products make up ifm Supply Chain’s portfolio:

GIB Forecasting: Accurately predicts demand and identifies forecast discrepancies by comparing past performance with future estimates and customer projections.

GIB Inventory: Uses customer data to create a systematic approach for optimizing inventory levels and reducing stock without compromising purchasing decisions or delaying order fulfillment.

GIB Operations: Streamlines MRP processes, proactively monitors supply and demand issues, view bills of materials, and easily transform planned orders and purchase requisitions.

GIB Buying: Targets improvements in buying efficiency, lowered costs, and optimized PO and STO creation.

GIB Production: Ensures precise plans based on true capacities that caters to any specific requirements with flexibility and transparency without compromising production.

GIB Vendor Managed Inventory: Allows for the sharing critical information across the supply chain through secure, web-based tools.


Solution priorities

ifm Supply Chain’s primary focus is on SAP ECC and S/4HANA customers. As SAP is actively transitioning its client base to the cloud and S/4HANA, ifm Supply Chain’s foremost development priority is to align with SAP’s roadmap. While most customers are expected to opt for private cloud, some may choose public cloud, but irrespective of the choice customers make, ifm Supply Chain is committed to staying up-to-date with the latest technology advancements from SAP.

Another area of development focus is strategic procurement, leveraging the solid foundation of the MRP Operations Cockpit. This is a highly utilized capability of ifm Supply Chain’s that brings together the 20 to 25 different transactions that contain all the data in a typical end-to-end supply chain. The cockpit provides a centralized view of all this data and enables timely and accurate decisions to be made. It plays a central role in the day-to-day execution of the supply chain plan.

ifm Supply Chain is making significant investments in the production planning and manufacturing domain and aims to integrate manufacturing and machine-level data into the SAP ERP layer. This integration will enable the proactive identification of potential machine failures and pinpoint specific parts that may be out of tolerance. Once identified, the manufacturer can quickly shut down the affected machine, move the production schedule to an alternate machine, and initiate the necessary maintenance procedures proactively. As Jones states, “Our vision is to move from scheduled, or reactive maintenance to predictive maintenance.  This transformation will reduce machine downtime and improve throughput. We have also added a heuristic planning engine to get an optimized production schedule across multiple production resources and facilities.”

Last year, ifm Supply Chain received a request from SAP’s wholesale distribution industry unit to undertake an innovative development effort in SAP procurement to address the direct materials buying process, complementing Ariba’s focus on indirect materials procurement. ifm Supply Chain embraced the challenge and started the development of a strategic buyer’s cockpit, which incorporates multiple variables and dimensions in the buying decision process. The new solution will be called Supply Chain eXcellence (SCX) for Procurement.

The MRP engine in SAP is a one dimensional calculation that informs the buyer about what is operationally required to meet the inventory or production plan. However, this is insular as there are multiple other considerations in the purchase decision, such as vendor restrictions, minimums and maximums on the purchase order, quantity-driven pricing, calendar-based incentives and rebates, supply network rebalancing, forward buying to avoid future price increases, and more. ifm Supply Chain is building a multi-variable buying engine that incorporates all such factors into the buying process for a low total cost and optimal supply chain performance. The first edition of SCX for Procurement will be released  in June 2023.

Case study example     

Ifm Supply Chain boasts over 800 customers across industries such as Automotive Suppliers; Metal, Wood, and Paper; Chemicals; and Consumer Goods.

One of these customers is Ram Tool Construction Supply Company, a distributor of construction supply tools and products with 39 locations and +94,000 SKUs. The company faced many challenges related to these business attributes:

  • Volume: 37 stocking locations, 72,535 inventoried materials by location – 2,756,330 total materials by location
  • Complexity: Ram Tool supplies 92% of orders to the job site within 10 hours
  • Variability: Project-specific consumption is difficult to predict and plan; all material is specific to construction job site phases.
  • Manual processes: Ram Tool buyers using offline spreadsheets and custom SAP reporting to forecast demand and plan inventory levels.

With ifm Supply Chain, Ram Tool reduced its stockout rate from 8% to 2% and achieved a 98% service level with a 60% decrease in buyer adjustments. “Before implementing the GIB Supply Chain Solution suite, our buyers were changing 80% of the purchase requisitions generated by SAP MRP. With GIB embedded in SAP, our buyers now accept over 80% of the recommended purchase requisitions,” said Kyle Loafman, Director of Purchasing at Ram Tool Construction Supply Company. “The intelligence GIB brought to our business improved buyer productivity four-fold.”

Other metrics impacted by ifm Supply Chain solutions include:

  • Improved fill rate
  • Increased forecast accuracy
  • Improved service levels
  • Lowered inventory investment
  • Reduced amount of time and effort to drive those results

What this means for SAPinsiders?

No need to wait for S/4HANA. Ifm works with both ECC and S/4HANA.

Understand the hand-offs in your supply chain. Ifm Supply Chain’s six modules mirror the interconnected components of the supply chain. The first two modules generate plans for demand and inventory. Modules three, four, and five relate to executing the plan by answering questions like the required purchase amount to meet the demand or inventory plan and the production output to achieve it. Module three deals with a comprehensive picture of supply and demand and making informed decisions. Module four is about generating an optimized purchase order factoring in all pertinent variables. Module five is production planning and scheduling, understanding capacity, then generating an optimized schedule for proper production sequencing flows that minimize downtime and maximize runtime. Module six relates to the vendor collaboration portal that allows the suppliers and customers to share critical supply chain data on a secure web platform. Therefore, ifm Supply Chain’s six modules function together by design which makes it essential for SAPinsiders to understand how these solutions might improve the interconnectedness of their planning and execution functions.

Mostly private cloud or on-premise. Most of ifm Supply Chain’s suite is used within a private cloud or on-premise environment. However, the company has a public cloud certification and some initial architecture inside SAP’s business technology platform (BTP) to enable public cloud. BTP is still relatively new and not fully equipped to manage the substantial computing and data transfer requirements necessary for the efficient functioning of ifm Supply Chain’s solutions. However, as Jones states, “We will continue to have our own space inside of the SAP core and continue to deliver our solutions inside that core. Even in the public cloud, there’s a way to create extensions inside the digital core and keep it clean as SAP likes to say.”

Whatever you plan must be executed. Many supply chain transformation initiatives triggered by the C-suite focus on planning specifically about demand, inventory, or production plans, with some visibility into specific planning metrics that reflect improvement. But these initiatives do not factor the real challenges of execution. The plans must be downloaded into SAP, and if companies employ the same ineffective tools to implement them, it can result in bottlenecks and other issues that hinder the realization of the full potential value of the enhanced plans. This is where ifm Supply Chain asserts its marked differentiation by enhancing the planning functions and outcomes and concluding the cycle by facilitating plan execution.

Sponsored by:


More Resources

See All Related Content