- SAP Integrated Business Planning
- SAP Integrated Business Planning Explained
- The Perfect Planning Guard
SAP Integrated Business Planning Explained (SAP IBP)
SAP Integrated Business Planning (IBP) is a Cloud Based solution for supply chain planning designed to help companies streamline and enhance their planning processes. IBP provides a single platform for collaboration and data-driven decision-making, enabling companies to better respond to market changes and achieve their business objectives.
The IBP solution consists of six components that cover all processes within the supply chain.
Supply Chain Control Tower
IBP for Sales & Operations Planning
IBP for Demand
IBP for Response & Supply
IBP for Inventory
Demand-Driven Replenishment
SAP Integrated Business Planning is the successor to SAP APO (Advanced Planning and Optimization) . Where SAP APO primarily focused on optimizing supply chain planning, SAP IBP goes further, providing a more comprehensive and advanced solution for planning and managing the supply chain in one solution.
Supply Chain Challenges
In your company, there are many departments involved in making the planning successful: demand, supply, marketing, finance, management... and they all need to be aligned. However, this is very difficult if you do not have a system that can give everyone a voice.
In addition, you also need to take into account different perspectives: strategic, tactical and operational. The strategic level sets directions and goals for the long term, the tactical level creates aggregated plans to meet the strategic objectives, balances demand and supply, optimizes inventory and creates allocations. And finally, the operational level translates the aggregated plans into detailed plans for the short term (such as priorities for deliveries or confirmations).
SAP IBP for Sales and Operations Planning (S&OP)
In today's rapidly changing world, it is more important than ever for companies to have a clear understanding of demand and supply. With the right planning tools, companies can ensure that they have the right products in the right place at the right time to meet customer demand.
The main component, S&OP (Sales and Operations Planning), helps companies optimize their demand and supply planning processes. The solution provides a single, integrated view of demand and supply data, enabling companies to make better decisions.
As companies can see all relevant data in one place, it becomes easier to see the bigger picture and identify potential problems or opportunities. S&OP is built up of four phases:
Demand review
Supply review
Reconciliation review
Management Review
This way, the solution helps companies make accurate demand forecasts. S&OP uses six different forecasting techniques to make accurate demand forecasts, even in dynamic markets. It also helps companies determine how much they can produce, which raw materials they need, and when they need to purchase them. IBP optimizes supply-side planning to meet demand, taking into account factors such as lead times, costs, and risks. S&OP also offers scenario planning capabilities, meaning companies can create and test different scenarios to see how these would affect demand and supply.
This allows for responding to unexpected events or changes in the market. In the fourth phase of S&OP, it can be determined whether the submitted proposal is in line with the financial objectives and key performance indicators of the company.
Curious about more information on the S&OP module, check out the McCoy TV below.
SAP IBP for Demand Planning
It is crucial for many companies to understand the demand for their products and services. When a company can understand its demand patterns well, it can ensure that it has exactly the right amount of products and services to meet customer demand.
The SAP IBP for Demand module can play a key role in this by supporting companies in optimizing their Demand planning processes. With a range of features and benefits, this solution enables companies to make better-informed decisions about their operations. The SAP IBP for Demand module goes beyond S&OP in demand forecasting and uses advanced algorithms to generate even more accurate demand forecasts. By leveraging these powerful algorithms, companies can benefit from improved accuracy and reliability in anticipating demand patterns. SAP even allows the user to apply external algorithms (from, for example, Python) , which further expands possibilities.
The ability to improve forecasts together is a central benefit of SAP IBP for Demand. Different teams can work together to refine forecasts, allowing input from different departments to be integrated.
These collaboration capabilities lead to more accurate and realistic forecasts, enabling companies to respond more flexibly to changing market conditions.
Also, demand planning with SAP IBP makes 'demand sensing' possible. This provides deep insight into order patterns, allowing companies to refine their forecasts based on historical and current order data. By understanding these patterns, organizations can better respond to specific customer requirements, adapt to changing trends, and above all, optimize their demand forecasts.
SAP IBP for Response & Supply Planning
The term "Dynamic market" is one that has been mentioned more and more often in the last 20 years. Demand fluctuations, supply chain disruptions, and unforeseen events require flexible and proactive planning.
The Response & Supply (R&S) module of SAP IBP offers the possibility to deal with these in the supply chain, to optimize it, and to anticipate changing market conditions in this way.
In this way, demand and supply can be synchronized. With the help of advanced algorithms and real-time data insights, the module enables the user to optimize their supply chain. It enables planners to apply Multi level supply planning. In this way, an effective supply plan for the entire network can be created by modeling across locations and multilevel bill of materials. This enables the planner to decide what should be included in the model and where the supply plan should be limited. Within R&S, three algorithms are available including the unlimited heuristic, prioritization, and optimization. The prioritization and optimization algorithms ensure that the system delivers a feasible and constrained supply plan that takes into account the modeled constraints.
Another strong part of Response & Supply is that it can reduce supply chain risks through tactical rough cut planning. R&S makes it possible to balance demand and supply while taking material constraints into account. Planners can impose constraints on essential resources such as production, transport, and storage, preventing potential bottlenecks.
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It also enables the user to act flexibly through operational response management. For example, it becomes possible to tackle challenges related to material scarcity by using an operational supply plan. This allows supply allocations to be made when material is scarce and sales orders to be reconfirmed to determine realistic availability dates with the delivery run.
The user also gets the opportunity to set up an internal deployment plan based on controlled quantities available for deployment, allowing for prioritization and optimization. With operational response management, 'gating factors' can be investigated, providing insight into the main causes of delays and shortages. The user can then use the web-based interactive planning to adjust the plan and work in a targeted manner. This approach promotes the company's agility and prepares it for success in a dynamic environment.
SAP IBP for Inventory Optimization (IO)
Efficient inventory management is no longer a strange wish in a world where markets are constantly changing, competition is increasing, and costs are rising. For this, companies strive for enough inventory (of the right materials) to guarantee service levels and at the same time not too much inventory to minimize inventory costs.
IBP for Inventory optimization (IO) provides a solution for optimizing inventory levels and achieving high service levels at the lowest possible costs. With the help of advanced algorithms, IBP IO calculates the optimal inventory levels based on various parameters, such as demand variability, service levels, and costs.
Companies are thus enabled to improve their inventories by looking at the whole supply chain, different situations, and types of customers. This allows them to find the right balance between inventory investments and service levels.
SAP IO has a Multi-stage inventory optimization that effectively deals with these problems by buffering errors in the forecast, demand risks, and efficiently managing the uncertainty in the supply chain. This way, the right quantities of inventory can be calculated for different products from finished product to raw material and it can be analyzed how these influence each other.
Because IBP is one integrated solution, it enables companies to collaborate with all departments and suppliers to avoid too much inventory, guarantee service levels, and optimize inventory costs. IO component enables planners to tackle complexity and various constraints, such as service level objectives, batch sizes, and lead times. By using simulations and scenarios, planners can assess the impact of different decisions and constraints.
IO also makes it possible for companies to gain insight into the product network and the geographical distribution of the inventory through built-in analyses. This insight allows IO to enable the user to evaluate causes of inventory levels and take targeted measures to minimize inventory costs and guarantee service levels.
SAP IBP - Supply Chain Control Tower
The supply chain control tower can be a great addition to all the components discussed above. The name Control Tower somewhat implies the function of this IBP component. It gives you a complete picture of your digital supply chain, shows how different domains are connected, and allows you to easily navigate to other parts of SAP such as SAP S/4HANA and SAP Digital Manufacturing Cloud. The Control tower also addresses the lack of visibility in your entire network. It provides end-to-end monitoring of the supply chain by analyzing current and historical performance, it creates alerts to quickly identify potential problems, it enables you to set up procedure playbooks to follow procedures, view supply network lanes, it offers dashboards with KPIs and intelligent tools for managing custom alerts and issues within the supply chain, and offers the ability to use analyses to address problems in your supply chain.
Another major benefit of the Control tower is that it connects you to your external supply chain partners via the SAP Business Network. This allows you to plan better by taking into account the constraints of your suppliers and quickly respond to alerts. This results in cost savings and improved service levels within your entire supply chain thanks to a responsive planning approach made possible by the Control tower.
SAP IBP - Demand-Driven Replenishment
Finally, the IBP for Demand-Driven Replenishment calculates decoupling points, average daily usage, and buffers for the positioning and sizing of materials to enable the material flow through your supply chain.
DDMRP (Demand Driven Material Requirements Planning) is an advanced planning technique that helps companies effectively manage their inventory levels. Unlike traditional planning systems, DDMRP uses actual demand data instead of forecasts to drive demand-driven replenishment. This ensures better planning accuracy and prevents over or under stocking. DDMRP uses five core components:
Strategic inventory positioning: determines where decoupling points are placed to position inventory at strategic points in the supply chain.
Buffer profiles: defines the required protection at decoupling points to absorb fluctuations in demand and supply. It uses a color-coded buffer model with different zones.
Dynamic adjustments: ensures that buffers can be flexibly adjusted based on market changes and future events. This keeps the inventory level protection optimal.
Demand-driven planning: uses sales orders instead of planned orders to drive demand planning. This ensures better accuracy in planning and prevents overstocking.
Visible and collaborative execution: priorities are assessed, inventory forecasts are checked and custom alerts are checked to manage the execution of the supply chain. Dashboards in SAP IBP provide an overview of the results and analyses.
With SAP IBP, companies can implement DDMRP and benefit from better inventory balance, increased operational efficiency, and improved customer service. DDMRP helps companies reduce the bullwhip effects, optimize inventory levels, and improve the overall performance of the supply chain.
Advantages of SAP IBP
In addition to the six main modules, IBP offers even more advantages. It is a cloud-based platform that runs on SAP HANA, which ensures easy integration with other SAP systems, but can also receive data from various sources at an aggregated or detailed level. Best practices are followed during integration, but on the other hand, it is also a scalable and flexible model.
The user experience is optimal thanks to the Web UI and Excel UI. Planners can create various "what if" scenarios and perform simulations that aid in the decision-making process. All results and information can be viewed in customizable charts and dashboards, and any required KPI can be calculated. And the best part is that it's not a static system, as it follows a roadmap with constant improvements.
SAP IBP Consultancy
As McCoy, we have a team of SAP IBP experts for all your planning issues. Our goal is to help you increase your revenue, reduce your inventory, and work more efficiently by using reliable and always available data. Continue reading to discover how we do this.
SAP IBP Releases Updates
SAP IBP releases quarterly updates to ensure that the platform remains up-to-date with the latest features, improvements, and bug fixes. These release updates provide users with new capabilities and improved performance, enabling them to manage their supply chain planning processes even more effectively.
We have listed some of the releases for you with the most important updates:
SAP IBP Release 2305
SAP IBP Release 2205
SAP IBP Release 2111
SAP IBP Release 2108
SAP IBP Release 2105
Other SAP IBP Content
SAP IBP Real-Time Integration
SAP IBP Intergation with Transportation Management
Improve your Supply Chain Planning with SAP IBP
Discover how SAP IBP can further assist you in transforming your supply chain planning and optimizing your business processes.
Digital Supply Chain Planning Made Easy
Case study ibp inventory, perfect planning guard, watch all our sap ibp video's on mccoy tv.
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Outlining Demand Planning
After completing this lesson, you will be able to use SAP Integrated Business Planning to manage and optimize both strategic and operational demand planning processes.
Demand Planning
With SAP Integrated Business Planning for Supply Chain (SAP IBP), demand management functionality spans the entire planning spectrum from more strategic planning like Sales and Operations Planning to operational demand planning, including Demand Sensing for short-term demand planning. Statistical models allow you to develop accurate mid-term forecasts while Demand Sensing allows you to react to those near term demand changes that occur while SAP Integrated Business Planning provides the platform to collaborate between groups (for example, Marketing, Sales, and Supply Chain) to add business intelligence to the forecast for the most accurate forecast you can get. All of this allows you to ensure that you are reacting to changes in demand and deploying the product to the right place to satisfy that demand.
The table shows the tools that are available in SAP IBP for demand.
| Tool | Description |
|---|---|
| Statistical Forecasting | If you want to create long-term forecasts, you need a forecast model with pre-processing, forecasting and post-processing algorithms, an application job template to run the forecast and the SAP IBP, add-in for Microsoft Excel to see the results |
| Demand Sensing | If you want to create short-term forecasts based on the Demand Sense, your planning area and forecast model need to fulfill special requirements |
| Promotion Integration | If you want to create a more accurate demand plan, you can integrate trade promotions data from external trade promotions planning systems. That is, you can run statistical forecasting on a data basis that doesn't contain the impact of promotions on the historical sales figures. At the end of the forecast process, you can include the planned future promotions in your final demand plan |
| ABC/XYZ Segmentation | If you want to focus on a set of items in demand planning, you can categorize the selected planning objects based on various segmentation measures and thresholds |
| New Product Introduction | If you want to create forecasts for new products, for which no historical values are available, you can identify and consider products that have a similar historical sales pattern and assign them as reference products to the new product |
Time Series Analysis | If you want to identify patterns in individual time series data such as Trend, Seasonality, Continuous, and Irregular as well as significant changes, for example, level shifts where the mean of the time series values alters significantly or trend changes where the direction or slope of a trend alters significantly. Based on these insights, you can select the most suitable forecast algorithms |
Driver-Based Planning | If you want to capture business drivers such as risks or opportunities. You can capture qualitative and quantitative information for them by evaluating their likely effects and expressing those effects in key figure values for multiple planning levels. You can also consider the drivers in your supply chain plan |
SAP provides a predefined model for demand planning in IBP – SAP6 standard planning area for demand.
In the standard statistical forecasting process, demand forecasts can be created or modified for a longer period such as 2-3 years for long-term forecasting or 12-18 months for mid-term forecasting.
As a demand planner, you run a forecast each week or month for multiple products or product groups in the background with mass processing, then review and adjust the figures interactively using the SAP IBP, add-in for Microsoft Excel.
As an analyst or data scientist, you can create and edit forecast models as required to achieve a variety of forecasting results.
There are a lot of different statistical models in SAP IBP which will be described further.
The figure shows the standard statistical forecasting process.
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Synchronize supply chain planning in real time, including S&OP, demand and supply planning, and inventory optimization, with SAP Integrated Business Planning.
SAP Integrated Business Planning for Supply Chain enables businesses to centralize demand, supply, inventory, sales, and operations planning on one platform to create more efficient and resilient supply chains. With embedded analytics, what-if simulations, alerts, and other machine learning capabilities, you can quickly identify and respond to ...
SAP IBP's Modules cover the core Supply Chain Planning functionality in one integrated platform. Let's invest some time to carefully read through the highlights of each SAP IBP module and how it contributes to the Sales and Operations Planning process. SAP IBP is a modern and flexible planning tool to enable businesses to cope with market ...
Explore how key capabilities of SAP Integrated Business Planning can help you improve supply chain management, forecasting, and demand planning.
Explore the product features available in SAP Integrated Business Planning for Supply Chain that enable you to plan for a sustainable, risk-resilient future.
SAP IBP for sales and operations supports the fundamentals of the individual SAP IBP modules to leverage the end-to-end sales and operations process. The sales and operations process comprises of the following: Demand Planning with statistical forecast and input consolidation. Supply Planning with capacity overview and Planning heuristics.
Manage the launchpad pages, define the layout of pages and edit, copy or delete existing pages. Create and manage spaces for the SAP Fiori launchpad. Find and manage master data types and entries in SAP Integrated Business Planning for Supply Chain. Manage rules that allow assigned users to mass-maintain master data.
Gain a solid understanding of the SAP Integrated Business Planning for Supply Chain solution, the components, and their associated business processes. Instructor-led training is supplemented with hands-on exercises using the most recently released version of the SAP IBP supply chain solution.
Meet future demand with SAP Integrated Business Planning for Supply Chain. Powered by SAP HANA in-memory technology, this supply chain planning solution combines capabilities for sales and operations, demand, response and supply planning, and inventory optimization.
This is additional content provided by SAP but not considered the Documentation as defined by the applicable SAP General Terms and Conditions. SAP Integrated Business Planning (IBP)
SAP Integrated Business Planning (IBP) is a Cloud Based solution for supply chain planning designed to help companies streamline and enhance their planning processes. IBP provides a single platform for collaboration and data-driven decision-making, enabling companies to better respond to market changes and achieve their business objectives.
SAP Integrated Business Planning for Supply Chain A company's ability to swiftly and effectively adapt to changing market conditions often defines its competitive advantage. In this context, it is essential to explore Integrated Business Planning (IBP), specifically focusing on how SAP facilitates this process.
Why SAP Integrated Business Planning. Meet future demand profitably with SAP Integrated Business Planning for Supply Chain (SAP IBP). Powered by SAP HANA in-memory technology, this cloud-based solution combines sales and operations planning (S&OP), forecasting and demand, response and supply, demand-driven replenishment, and inventory planning.
Collaborate across departments. Break down operational and planning silos and improve teamwork and efficiency in the planning process. Our S&OP software lets you model various business alternatives, create and optimize business plans, and combine input from multiple constituencies, like finance, sales, marketing, and supply chain departments.
Get started with SAP Integrated Business Planning Find the information you need to implement, maintain, and enhance your SAP solutions.
SAP Integrated Business Planning for Supply Chain solution (SAP IBP) is a complete system that can be leveraged to manage a corporation's supply chain functions. It is a SAP HANA based cloud offering with several individual modules that manage a specific process. All of the modules can be used together for a robust supply chain, which gives ...
Discover the power of SAP Integrated Business Planning for Supply Chain with this comprehensive learning journey. Learn from experts and boost your career.
Introduction to SAP Integrated Business Planning for Demand. In this unit, we will bring you through the main steps of the Demand Planning process in SAP Integrated Business Planning for demand as well as the process of consolidating and validating the global demand that would typically be done in SAP IBP for sales and operations.
Use SAP Integrated Business Planning to manage and optimize both strategic and operational demand planning processes. Employ key figures in SAP Integrated Business Planning to aid in demand planning; Use different forecasting algorithms in SAP IBP and employ the use of key figures; Use key figures in planning, understanding data aggregation ...
With SAP Integrated Business Planning for Supply Chain (SAP IBP), demand management functionality spans the entire planning spectrum from more strategic planning like Sales and Operations Planning to operational demand planning, including Demand Sensing for short-term demand planning. Statistical models allow you to develop accurate mid-term ...