IBP400 : SAP Integrated Business Planning - Configuration for Inventory - IBP 4

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IBP400 Unit OverviewSAP Integrated Business Planning for Inventory

t ------------------------------------------------------ \Unit 1:IBP for Inventory Introduction

v______________ I_________________ /

Unit 2:--------- \

Single Stage InventoryOptimization _____ >

Unit 3:Multi Stage Inventory Optimization

( ----------------------------------------------------- \Unit 4:Planning Area Configuration

v,________________________________/

( ----------------------------------------- ---------- 'Unit 5:Network Visualization

v_______________________ ______-

Unit 6:A closer look at selected key figures

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IBP for Inventory Introduction

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Agenda

Business Planning

• Current situation, complicating factors

• Integrated Business Planning - the process, using SAP

Integrated Business Planning for inventory

• Drive S&OP decisions to inventory targets for the Planners

• Visibility to check master data, determine root causes of inventory

• Efficiently position inventory to best absorb variability in complexnetworks

Inventory model of the Demand Driven Supply Chain

• Determine value of other improvements in forecast, supply, lead-time

• “Base Case" economics for other Supply Chain projects

• Important variability analytics for root cause analysis, reporting, andimprovement

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SAP Integrated Business Planning solution strategy

MissionCreate new integrated business planning solution that enables supply chain leaders to balance demand plans with network constraints and attain profitability goals

VisionWorld class solution for supply chain monitoring, sales and operations planning, demand management, inventory planning, supply planning, and response management

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Options for Handling Uncertainty

Inventory

Flexibility Service

Options for Handling Uncertainty

Inventory

entory ..aiting for

orders

Flexibility Service

Financial Impacts for Handling Uncertainty

Flexibility Service

IBP for Inventory Model for Uncertainty

Flexibility Service

Why a new solution for supply chain planning is needed?

Complex and granular data models encumbers ‘what if’ analyses

Disconnect between planning and execution

Customer centricity and the need for speed

Supply chain planning systems in the market tend to be fragmented requiring many interfaces

Duplicate data transfers between planning and analytics systems encumbers performance

Integrated Business Planning, powered by HANAA single data model to swiftly drive collaboration and action in your business

S a le s a n d O p e ra tio n s : M o n th ly a n d W e e k ly P la n n in g

B alance d em and and supply w hile providing organ izational

visibility and a lignm ent

W h a t-if scenarios, using “real tim e” inform ation

JA M e m b e d d e d com m unication , and analytics

S u p p ly C h a in C o n tro l T o w e r: V is ib ili ty

A ch ieve end -to -en d visibility in the e x ten d ed supply chain

In tegra te D a ta from various S ystem s

D rive visibility and action with con figurab le Analytics & A lerts

and C a s e M a n a g e m e n t

In v e n to ry : M a s te r U n c e r ta in ty , d riv e S & O P d e c is io n s to th e P la n n e rs

Efficiently position inventory to best respond to fo recas t error, d em and

variability and supply uncertainty

M ulti-echelon (m u lti-s tag e) inventory optim ization to so lve the sc ien ce of

p ostponem ent

D rive S & O P decis ions to inventory ta rg e t recom m endations for P lanners

( item -lo cation -tim efram e specific)

D e m a n d : D e m a n d a n a ly t ic s , d e m a n d s e n s in g . F o re c a s t B e t te r

D em an d S ensing (pred ic t and reforecast, pattern recognition)

Forecasting statistical techn iques

C o llab orative D em an d Planning

S u p p ly a n d R e s p o n s e : M a s te r s u p p ly p la n n in g a n d re s p o n s e in te llig e n c e

P lan production, p rocurem ent, and distribution

R espond to daily disruptions through w h a t-if analysis to ch an g e supply p lans and

resch ed u le dem and

M a n a g e a llocations w h e re supply is scarce

S u p p ly C h a in M o n ito r in g a n d

In te g ra te d B u s in e s s P la n n in g

Enhanced User Experience

Supply Chain Control Tower

IBP for sales and operations

IBP for inventory

IBP for demandIBP for supply &

response

SAP HANA Platform

Agenda

Business Planning

• Efficiently position inventory to best absorb variability in complexnetworks

Inventory model of the Demand Driven Supply Chain

• Determine value of other improvements in forecast, supply, lead-time

• Important variability analytics for root cause analysis, reporting, andimprovement

What’s the problem we’re solving?

Inventory Target Setting is Difficult

Things do not always go quite as planned!

Instead of this...

C om puterChip

MobilePhone

You have this...

Supply chain complexity has exploded and is now the price of admission intoday’s global market

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The demand side is not completely predictable...

Demand Factors

• Simultaneous internal andexternal demand

• Forecast error

• Seasonal, time-varying demand

• Multiple service levels andinventory thresholds

• Over- and under- forecasting

• Outliers

Customers

(Internal)

Inventory targets must consider variability and uncertainties in Demand

... and suppliers are rarely perfect

SuppliersSupply Factors

• Batch size requirements

• Late shipments

• Short-shipped supplies

• Frozen forecast windows

• Time-varying Bills of Material

• Multiple supply sources

• Seasonal supply sources

Inventory targets must also consider variability and uncertainties in Supply

Now take all those uncertainties...

All of this variability and uncertainty occurs at each individual location

...and multiply!

Inventory decisions at every point in the enterprise-wide supply chain are linked.

Traditional systems ignore this complexity.

Variability and uncertainty has inter-dependency within the Network

What is Required for Inventory Planning?

The real world is... It is not...

Stochastic (variable, unpredictable)

Deterministic ( if then)

Multistage Isolated Single Stage

Time Varying Stationary

Comprehensive Data Model Multiple, Limited Data Models

Enterprise Scale Desktop Scale

Dynamic & Integrated (Online) Static & Offline Analysis

Agenda

Business Planning

• Efficiently position inventory to best absorb variability in complex networks

Inventory model of the Demand Driven Supply ChainDetermine value of other improvements in forecast, supply, lead-time

• Important variability analytics for root cause analysis, reporting, and improvement

Inventory Planning & Optimization: What Decision Are We Making?

Inventory Optimization is the science of calculating inventory targets to

meet desired service goals

• at lowest inventory cost possible

• across the entire supply chain

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SAP Integrated Business Planning for Inventory

IBP-I turns S&OP decisions into reality by calculating inventory targets for planners

IBP integrated data model, using “realtime” ERP data

Familiar Excel-based Ul for consistency

Inputs for forecast accuracy, lead time variability, and supply uncertainty

Fully consistent with other IBP applications, processes, and information

IBP400 : SAP Integrated Business Planning - Configuration for Inventory - IBP 4

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