SAP IBP, advanced inventory optimization: Configuring and Preparing for Use

Creating an Inventory Planning and Optimization Process

The Power of Multi Echelon

Validating Inputs

Running an Inventory Optimization Operator

Analyzing the Results of an Inventory Optimization Run

Finalizing the Inventory Plan

Inventory Analysis Features

Objective

After completing this lesson, you will be able to understand how to use the Inventory Analysis app.

Sample Use Case: Drivers of Safety Stock

Safety stock drivers

Drivers are internal or external factors such as business risks, opportunities, assumptions, or other events that can influence your organization’s supply chain plan in a positive or negative way. Making these drivers transparent can help you understand how they could influence the direction of your supply chain plan and prepare to change direction if needed. To do this, planners capture these drivers during a planning cycle for their business unit, like the marketing, demand, or supply department. At the end of the planning cycle, the various drivers are consolidated and analyzed in a review meeting with stakeholders from the different business units. It is then decided which of the drivers are relevant and need to be considered in the supply chain plan. Identifying these drivers can help your organization to react to their possible effects and adjust your supply chain plan if needed.

Driver-based planning supports you in capturing 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.

The figure describes the Drivers for Safety Stock Inventory.

The slide presents three graphs on a Dashboard to analyze the drivers of the safety stock inventory:

Days of Coverage - Recommended Safety Stock by Product Sales
This is a line graph where you can identify the Safety Stock in days of the components and the finished goods.
Days of Coverage - Target on Hand Stock by Product Series
This is a line chart where you can identify the Target stock on hand weeks of the components and the finished goods.
Recommended Safety Stock Drivers (Eaches)
This is a bar chart with mark lines presenting the recommended stock compared to the stock drivers e.g. Demand Variability, Supply Variability, and Service Variability.

Using the Scenario Scorecard in SAP IBP

The Scenario Scorecard is a powerful decision-support feature in SAP Integrated Business Planning (IBP) that enables supply chain planners and business leaders to compare multiple planning scenarios side by side using predefined key performance indicators (KPIs). It transforms complex, data-heavy planning alternatives into a clear, consolidated view — making it easier for cross-functional teams to align on the best course of action.

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Core Purpose

In a typical S&OP or IBP process, planners create several what-if scenarios to evaluate how different business decisions — such as changes in demand, supply capacity adjustments, or inventory policies — would affect overall performance. The Scenario Scorecard brings these scenarios together in a single view, allowing stakeholders to assess trade-offs objectively without having to navigate individual planning worksheets.

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How It Works

1. Scenario Creation

Before using the Scorecard, planners create multiple named scenarios within the IBP planning area. Each scenario represents a distinct planning assumption — for example:

- Baseline: the unconstrained demand plan

- Optimistic: an upside demand scenario with increased capacity

- Conservative: a risk-adjusted scenario with reduced supply availability

2. KPI Definition

The Scorecard is built around a set of KPIs that are relevant to the business. These typically include key figures like:

ID	Name
I_RECOMMENDEDSAFETYSTOCKVAL	Value of Recommended Safety Stock
I_SAFETYSTOCKDEMANDVARIABILITY	Safety Stock for Demand Variability
I_SAFETYSTOCKSERVICEVARIABILITY	Safety Stock for Service Variability
I_SAFETYSTOCKSUPPLYVARIABILITY	Safety Stock for Supply Variability
I_SAFETYSTOCKLOTSIZE	Additional Safety Stock with No Lot Size

KPIs are configured in the IBP planning area and can be tailored to reflect the strategic priorities of the organization.

3. Scorecard Comparison

Once scenarios and KPIs are defined, the Scorecard displays them in a structured comparison matrix. Planners can immediately see which scenario performs best across each dimension — for example, which scenario achieves the highest service level while keeping inventory costs within target.

Color-coding or threshold indicators can be applied to highlight scenarios that exceed, meet, or fall below defined business targets, giving decision-makers an instant visual signal.

4. Collaborative Review

The Scenario Scorecard is typically reviewed during the Management Business Review (MBR) or the Executive S&OP meeting. At this stage, the Scorecard serves as the central artifact for discussion:

- Finance evaluates the revenue and margin implications

- Supply Chain assesses feasibility and inventory risk

- Sales reviews the impact on customer service levels

- Leadership selects the scenario that best balances business objectives

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Key Benefits

- Faster Decision-Making: Eliminates the need to switch between multiple reports or planning views — all relevant KPIs are in one place.

- Transparency: All stakeholders work from the same data, reducing misalignment between functions.

- Auditability: Scenarios and their underlying assumptions are preserved, enabling a clear audit trail for planning decisions.

- Scalability: The Scorecard can be used at multiple planning levels — global, regional, or product-category level — depending on the organizational structure.

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Integration with the IBP Process

The Scenario Scorecard is most effective when embedded into a structured IBP cycle:

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Demand Review → Supply Review → Financial Reconciliation → Scenario Scorecard Review → Decision & Consensus

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It acts as the bridge between the analytical planning work done by individual teams and the consensus decision that drives the final operating plan.

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Best Practices

- Limit the number of scenarios to three to five to keep the review focused and actionable.

- Align KPIs with business strategy before configuring the Scorecard — use KPIs that reflect what the organization actually manages to.

- Involve Finance early in KPI definition to ensure revenue and profitability metrics are included alongside supply chain metrics.

- Document scenario assumptions clearly so reviewers understand what each scenario represents before the meeting.

- Use the Scorecard iteratively — revisit it as new information becomes available during the planning cycle rather than treating it as a one-time exercise.

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The Scenario Scorecard is one of the most impactful features in SAP IBP for driving a fact-based, collaborative planning process. When used consistently, it elevates the quality of S&OP decisions and strengthens the connection between operational planning and strategic business objectives.

Set Up an Inventory Analysis using Scenario Scorecards in Planner Workspace

As inventory planner you would like to run an inventory analysis using the scorecard feature of the planner workspace. To do that we will work during this exercise with the connection IBP400 within the Planning Area IBP400.

Prerequisites

Define a Planning Area where planning should be executed, for example, IBP400.
Master and key figure data loaded into the planning area.
Access to Planner Workspaces App is required.
The heatmap created during the previous exericse is needed.
This exercise uses the inventory planning results generated by the Min/Max limitation process. Therefore, the Minimum and Maximum Safety Stock exercise and all related prerequisite exercises must be completed beforehand.

Steps

Create a planner workspace PWS Inventory Optimization - ## with workbook Inventory Analysis - ## and three components (IO 210 Validate Inputs - Demand Inputs, IO 220 Review Results - Quantities, Heatmap).
1. Go to the Web UI, navigate to the General Planner Group and open the Planner Workspaces app.
2. Click on Create.
3. Type in under Name and Description PWS Inventory Optimization - ##.
4. Select the Planning Area IBP400.
5. Click on Create.
6. Click on ... and choose Add Workbook / Variant.
7. In the dialog box Add Workbook / Variant choose Create in the upper right corner.
8. In the dialog box Create Workbook, use Inventory Analysis - ## as name and description.
9. Click on Create.
10. On the right hand side, click + to add a component.
11. In the dialog box Select Component Type choose Planning View.
12. In the dialog box Add Planning View choose the arrow beside Create in the upper right corner.
13. Select Import from Excel Add-In.
14. In the dialog box Import Planning View from SAP IBP, Add-In for Microsoft Excel choose Template as Type.
15. As Template Name choose IO 210 Validate Inputs.
16. As Worksheet choose Demand Input.
17. Choose Import.
18. On the right side click Save and X. A Message is shown that Due to a large number of results, some results aren´t displayed.. Confirm this message with x.
19. Click on Select Planning Filter and choose your planning filter FG1##. Click Go.
20. On the right hand side, click + to add a component.
21. In the dialog box Select Component Type choose Planning View.
22. In the dialog box Add Planning View choose the arrow beside Create in the upper right corner.
23. Select Import from Excel Add-In.
24. In the dialog box Import Planning View from SAP IBP, Add-In for Microsoft Excel choose Template as Type.
25. As Template Name choose IO 220 Review Results.
26. As Worksheet choose Quantities.
27. Choose Import.
28. In the Time Levels section, choose Scroll to current Period.
29. On the right side click Save and X.
30. On the right hand side, click + to add a component.
31. In the dialog box Select Component Type choose Analytics Charts.
32. In the dialog box Add Analytics Chart choose the previously created Heatmap IBP##-100 chart.
33. Choose Add.
34. On the right side click Save and X.
35. On the right hand side, click on the icon right next to + which to Switch to Stacked View.
36. Click on Save Components.
Create a scenario High Demand / Variability - ## with high demand and demand variability.
1. In the planner workspaces app, open the dropdown related to Scenarios and choose Create Scenario.
2. In the dialog box Create Scenario choose Base Version / Baseline as Version / Scenario.
3. Use High Demand / Variability - ## as name and description.
4. Choose beginning of next month as Scheduled Deletion Date.
5. Click on Create.
6. For all combinations shown in component Demand Input related to product IBP##-100 in location Plant 1 HK maintain for the current period 150000 as IO Demand Forecast and 2,5 as Forecast Error CV.
7. Click on Save Data.
Create a job template Run GIO and CIC in Scenario High Demand / Variability - ##.
1. Go to the Web UI, navigate to the Administrator Group and open the Application Job Templates app.
2. Click on Create.
3. Type in under Job TemplateRun GIO and CIC in Scenario High Demand / Variability - ##.
4. Select as Type of Job TemplatePrivate Template.
5. Select as Recurrence PatternSingle Run.
6. Click on Maintain Steps.
7. In dialog box Maintain Steps, click on Add in the upper right corner.
8. In the dialog box Template Selection, search for Profile based Inventory Optimization. Choose it by clicking on it.
9. In dialog box Maintain Steps, click on Save Job Template on the bottom.
10. Choose Planning AreaIBP400.
11. Choose Planning OperatorINVPROF_MINMAXSAFSTOCK - ##.
12. Choose FunctionMULTISTAGE_IO & IO_DETERMINISTIC.
13. Note
  With this, we will execute both the global multi-stage inventory optimization planning operator and the calculation target inventory components planning operator combined in one run.
14. Choose Version_Baseline. Click OK.
15. Choose ScenarioHigh Demand / Variability - ##. Click OK.
16. Choose Planning FilterFG1##.
17. Choose Subnetwork##. Click OK.
18. Choose Current Period CalculationExecution Time.
19. Optionally, you can choose as Reason CodeRC_INVENTORY and as CommentEvaluation of Scenario with High Demand / Variability - ##.
20. Click on Save.
Return to your planner workspace PWS Inventory Optimization - ##, refresh the browser window to ensure that the new application job template is available for planning and create scorecard Evaluate High Demand / Variability - ##.
1. Go to the Web UI, navigate to the General Planner Group and open the Planner Workspaces app (if needed). Open the previously created planner workspace PWS Inventory Optimization - ## with the workbook / variant Inventory Analysis - ##.
2. Note
  If you still have a browser window open with the previously created planner workspace ensure that you have saved all components. For this, switch to Design and click Save Components. Then refresh the browser window to ensure that the newly created application job template is available Confirm any warnings if needed.
3. Ensure that you are in Plan mode.
4. Open the dropdown related to Scenarios and choose Compare Scenarios.
5. In the dialog box Select Scorecard, click on Create.
6. In the dialog box Create Scorecard, use Evaluate High Demand / Variability - ## as name and description.
7. Choose Key FigureRecommended Safety Stock. Choose Smaller is better as Optimal direction. Leave the Format as it is. Click on the icon under Filters, click on Add Filter, choose the next 26 weeks under Time Periods. Click on Select Planning Filter and select your planning filter FG1##. Click on Apply.
8. Click on Add.
9. Choose Key FigureAverage Inventory Position. Choose Smaller is better as Optimal direction. Leave the Format as it is. Click on the icon under Filters, click on Add Filter, choose the next 26 weeks under Time Periods. Click on Select Planning Filter and select your planning filter FG1##. Click on Apply.
10. Click on Add.
11. Choose Key FigureAverage Cycle Stock. Choose Smaller is better as Optimal direction. Leave the Format as it is. Click on the icon under Filters, click on Add Filter, choose the next 26 weeks under Time Periods. Click on Select Planning Filter and select your planning filter FG1##. Click on Apply.
12. Click on Add.
13. Choose Key FigureAverage Pipeline Stock. Choose Smaller is better as Optimal direction. Leave the Format as it is. Click on the icon under Filters, click on Add Filter, choose the next 26 weeks under Time Periods. Click on Select Planning Filter and select your planning filter FG1##. Click on Apply.
14. Click on Add.
15. Choose Key FigureSafety Stock for Demand Variability. Choose Smaller is better as Optimal direction. Leave the Format as it is. Click on the icon under Filters, click on Add Filter, choose the next 26 weeks under Time Periods. Click on Select Planning Filter and select your planning filter FG1##. Click on Apply.
16. Click on Add.
17. Choose Key FigureSafety Stock for Supply Variability. Choose Smaller is better as Optimal direction. Leave the Format as it is. Click on the icon under Filters, click on Add Filter, choose the next 26 weeks under Time Periods. Click on Select Planning Filter and select your planning filter FG1##. Click on Apply.
18. Click on Add.
19. Choose Key FigureSafety Stock for Service Variability. Choose Smaller is better as Optimal direction. Leave the Format as it is. Click on the icon under Filters, click on Add Filter, choose the next 26 weeks under Time Periods. Click on Select Planning Filter and select your planning filter FG1##. Click on Apply.
20. Click on Create.
21. Click on Close.
Run the application job Run GIO and CIC in Scenario High Demand / Variability - ## from planner workspace PWS Inventory Optimization - ##.
1. In your planner workspace PWS Inventory Optimization - ##, choose Jobs and Run Application Job.
2. In the dialog box Schedule Job, choose as Job TemplateRun GIO and CIC in Scenario High Demand / Variability - ##.
3. Optionally, you can check the parameters you have set up earlier in this exercise.
4. Choose Schedule.
5. Under jobs, open Show Status.
6. In the dialog box Job status click Refresh till you application job is finalized.
7. In the dialog box Job status click Close.
8. Refresh your planner workspace using the icon right next to Simulations.
9. Add the baseline scenario to your planner workspace.
10. Observe the changes to your heat map respectively in the planning view components.
Use your scorecard Evaluate High Demand / Variability - ## to detail your evaluation.
1. Open the dropdown related to Scenarios and choose Compare Scenarios.
2. Observe the changes to the different key figures for the baseline scenario compared to the one with high demand and variability.

Result

Now you have seen how you can create an inventory analysis via the scorecard feature of the planner workspace app.

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