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.
SAP IBP contains a world-class demand management solution, combining both Statistical Forecasting and best of breed Demand Sensing algorithms via SAP IBP for demand as explained in the figure.
Such a solution can help to resolve the following types of business challenges: high market volatility, increasing variation in demand, and identifying increasing and decreasing customer demand.
Demand forecasting needs to consider volatile factors in the future. Such changes could be changes in customer demand, changes in supply, promotions, product introductions and discontinuations. It has to predict short-, mid-, and long-term requirements.
SAP IBP for demand consists of traditional demand planning (mid— and/or long-term) and demand sensing (short-term forecasting).
Mid- or long-term forecasting helps you to cope with the uncertainty of the future, relying on historical data and on the analysis of trends. Demand Sensing makes these mid- or long-term results more accurate in the short-term horizon.
Demand Sensing is closer to execution. It is specific, disaggregated, and immediate.
Think about the different perspectives and statements. What would you expect? Can you identify with some of the statements? SAP IBP for demand addresses your concerns with all functionality studied previously.