Options for Handling Uncertainty

What is the problem we are dealing with?

• Reality implies fluctuations in data. It means dealing with variability. Reality is the constantly changing face of business.
• At a customer service level, this changing face of business means variability.

Handling this variability is aided by having an accurate, consistent model of the network you are dealing with. SAP Integrated Business Planning (IBP) for inventory provides a consistent, reliable, optimal cost model so that the right decisions can be made to address the following questions:

• Do we handle variability and uncertainty by simply having inventory in stock?
• Do we handle this through flexibility in manufacturing or logistics, or expediting?
• Do we require customer flexibility in service levels or do we make them wait?

The right answer is a combination of these three. Only SAP IBP for inventory can provide the optimal calculation, and the information needed, to decide on where the balance resides for your company.

The following situations arise and strongly depend on each other:

• Assets or logistics waiting to be expedited or engaged.
• Inventory waiting for an order.
• A customer waiting for a delivery.

As a business, trade-offs are made, or more realistically, a balance is found between flexibility, inventory, and customer service. You can only explore the three alternatives for handling variability by having an accurate, consistent model of the network you are dealing with.

A new and innovative solution is required to break this chain and facilitate feasible ways and strategies for negotiation. The SAP IBP for inventory model offers such a solution.