Material Number: 50130233 Collection: 02
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Participant Handbook
E
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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
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Options for Handling Uncertainty
Inventory
entory ..aiting for
orders
Flexibility Service
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Financial Impacts for Handling Uncertainty
Flexibility Service
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IBP for Inventory Model for Uncertainty
Flexibility Service
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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
SPEED
SPEED
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Supply chain planning systems in the market tend to be fragmented requiring many interfaces
Duplicate data transfers between planning and analytics systems encumbers performance
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Integrated Business Planning, powered by HANAA single data model to swiftly drive collaboration and action in your business
M
a
□
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
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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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What’s the problem we’re solving?
Inventory Target Setting is Difficult
Things do not always go quite as planned!
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Instead of this...
C om puterChip
MobilePhone
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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
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... 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
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Now take all those uncertainties...
All of this variability and uncertainty occurs at each individual location
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...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
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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
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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 complex networks
Inventory model of the Demand Driven Supply ChainDetermine 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, and improvement
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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
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