SAP Integrated Business Planning

SAP IBP:
SAP Integrated Business planning, also known as SAP IBP, is SAP’s new
dimension platform for real-time, integrated supply chain planning, built on
SAP HANA DB, for Cloud deployment.

Important Functions of SAP IBP:

 Real-time planning for an effectively balance between supply and
demand
 forecast functions
 Strong performance due to native development on the SAP HANA
platform
 User-friendly interface
 Possibility to test and compare different scenarios
 Connection with Microsoft Excel

Notable Advantages of SAP IBP:

 Clear visualizations
 User-friendly frontends (embedded in excel)
 Calculations take the entire Supply Chain into account
 Right warehouse- and minimum inventory levels
 Supported by Machine Learning (pattern recognition of demand
developments)
 Prognosis features
 Problems within the Supply Chain are visualized by real-time analyses
of current developments
 Trends are immediately recognized by means of Predictive Analytics
 Minimized warehouse - and production costs
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Challenges of SAP Integrated Business Planning in the Cloud:

 Software Updates
 Loss of Control of Software and Services
 Security
 Master Data Replication and the Batch Schedule
 Integration
 Lack of Customisation

Modules Architecture of SAP IBP:

SUPPLY CHAIN CONTROL TOWER

IBP FOR SALES AND OPERATIONS

IBP FOR RESPONSE &

IBP FOR DEMAND IBP FOR INVENTORY
SUPPLY

SAP HANA PLATFORM

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Components of SAP IBP

Supply Chain Control Tower:

Data and processes in supply chain tend to be unshareable and inconsistent,
which does not allow for timely views of the entire supply chain. As a result, if
there are issues or problems in the process, it can lead to significant delays in
the identification and resolvement of problems. SAP Supply Chain Control
Tower (SCCT) can help with timely visibility of these problems!

SCCT is an important module of SAP IBP, which helps provide a

comprehensive, end-to-end supply chain visibility, which enables enterprises to
get deeper insights into the supply chain’s existing and historical performance.
This enables organizations to analyse and effectively manage their supply chain
operations in real-time. SCCT makes it easier to identify current and potential
problems in the supply chain processes and thus improves overall decision
making. Since it is integrated in real-time with data sources of SAP, it is
possible to obtain detailed order information.

The reason behind the development of the SAP IBP SCCT module was the need
for organizations to plan, and also alter plans due to unexpected demand and
supply fluctuations. SCCT allows enterprises to segment the supply chain in
real-time, which makes it easier to view and understand.

Benefits from using SCCT:

 End-to-end supply chain visibility

 Decreased supply chain costs and inventory levels
 Improved capability to deliver on-time
 Cost-effective and quick customer service
 Improved decision making throughout the entire supply chain
 Improved supply chain performance as a result of tracking data in real-
time
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IBP FOR SALES OPERATIONS:

SAP IBP S&OP allows you to create a cross-departmental S&OP plan that has
the ability to balance profitability, inventory levels, and exceptional service.
Being able to effectively analyse data from different business departments and
across business functions and create various planning scenarios enables speedy
and accurate S&OP planning. This results in decreased costs, improved
inventory efficiency, revenue growth, and the ability to better attain the
company’s financial targets.

Benefits involved in using S&OP Planning:

 Improved speed and agility to plan

 Improved capability to forecast accurately and deliver on-time
 Effectively balance supply and demand and achieve organizational targets
 Address cross-functional and critical business decisions
 Alignment and integration of planning and execution
 Improved decision making throughout the entire supply chain

IBP FOR DEMAND:

Demand Planning, which is a crucial element of SAP IBP, is an end to end
demand planning engine that integrates traditional medium and long term
planning based on statistical methods. It is based on a user-friendly Microsoft
Excel interface, which integrates both automated and exception-based planning
processes and traditional/manual capabilities for planning. This solution allows
for demand sensing models that are more accurate and thus enables
organizations to improve forecast accuracy for their short and medium term
planning cycles.

Benefits of Demand Planning:

 More accurate statistical forecasts
 Improved ability to react to changes in demand
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 Improved supply chain agility

 More effective product deployment based on short-term deman
 Improved collaboration to ensure the most accurate forecast
 Improved decision making throughout the entire supply chain

IBP FOR INVENTORY:

Inventory is a crucial module of SAP IBP. It enables organizations to manage
the increased risks to supply chain, such as fluctuations in customer
expectations, volatilities in demand, variabilities in supply, and uncertainties in
the economy. In order to remain competitive, organizations need to have
improved planning, analysing, and collaboration tools in place to ensure the
long-term growth and profitability of the company. Inventory optimization is
the procedure by which you try to balance the costs of carrying excess
inventory, with the costs associated with failing to meet the customer service
level targets. With SAP’s IBP for HANA, it is possible to extend inventory
optimization planning throughout the entire global organization. As a result,
inventory optimization in different stages simultaneously and accounting for
variability provide inventory targets that can meet and even exceed customer
service levels, at the same time reducing working capital. SAP IBP allows for a
system wide optimization of inventory, not just a particular set of finished
goods in the warehouse.

Benefits of Inventory optimization:

Maximize inventory efficiency by reducing working capital
Improved speed and agility to plan
Decreased production and distribution costs
Address cross-functional and critical business decisions
Alignment and integration of planning and execution
IBP FOR RESPONSE AND SUPPLY:
SAP IBP Response and Supply enables an enterprise to adapt and react quickly
to changes and fluctuations in demand, by taking into account the impact on the
entire supply chain, including production, procurement, and distribution in order
to better fulfil customer needs. Response and Supply include both finite and
infinite capacity mode. As a result of its what-if analysis capabilities, it provides
 SAP Integrated Business Planning

organizations better visibility instead of potential scenarios, which helps

improve decision making. IBP Supply and Response allow for mid-term and
short-term supply planning, based on prioritized and categorized demand.

Benefits of using Response and Supply:

 Improved speed and agility to plan
 Improved ability to create visualizations of key figures and Key
Performance Indicators (KPI) for the supply models
 Improved ability to support strategic, operational, and tactical supply
planning with a single solution
 Improved capability to forecast accurately and deliver on-time
 Effectively balance supply and demand and achieve organizational targets

 Quicker identification of problem materials and resources, allowing for

quicker resolutions to those problems
 Improved decision making throughout the entire supply chain