Introduction to SAP Integrated Business Planning for Response and Supply

As shown in the figure, SAP IBP for Response and Supply, Time-Series-Based Supply Planning as part of SAP IBP for Response and Supply allows a demand and supply plan creation using following supply planning algorithms:

• Supply planning heuristic to create an infinite supply plan without shortages in which all demands are fulfilled regardless of available supply.
• Supply planning finite heuristic to create a priority-based finite supply plan in which demands are fulfilled depending on available supply.
• Supply propagation heuristic to create an infinite supply plan in which only the available supply is propagated downstream through the supply chain.
• Shelf life planning heuristic that takes the shelf life of products into account when creating a supply plan (infinite without shortages).
• Supply planning optimizer to create a finite cost-optimized supply plan.

On the other hand, Order-Based Planning helps you to create a supply plan using operational data and react to short-term changes.

This approach enables supply planning from an operational perspective: It uses detailed data from external systems, and takes into account, for example, planned orders, production orders, sales orders, and purchase orders. Compared to the time-series-based planning functions of SAP Integrated Business Planning for Supply Chain (SAP IBP), the order-based approach takes a shorter-term view.

You can use the resulting supply plan, for example, to adapt your stock levels as required, and to quickly respond to changes that might arise at short notice.

As shown in the figure, Recap - Time-Series and Order-Based Planning, Supply and Allocations Planning includes the following process:

• Create allocations and a supply plan based on prioritized forecast demands and Supply Chain constraints.

Response Planning includes the following processes:

• Create order confirmations and an adopted supply plan based prioritized demands, allocations and Supply Chain constraints.

• Both processes work on tightly integrated information from SAP ERP and allow for root-cause analysis and simulation of full and delta plans.

Deployment Planning is a process in order-based planning, which is performed to distribute available supply to demand. A supply plan is never final. There can always be last-minute sales orders coming in or supply is, against all expectations, delivered late or not at all. However, you can't wait forever - at some point, you have to start the execution of the supply plan. To be able to do so, you have to work out a reliable short-term distribution plan to distribute available supply to demand from central to downstream supply chain stocking points.

You can create such a distribution plan with the help of deployment planning in order-based planning

The following six key capabilities within SAP IBP for response and supply help you keep your supply management under control:

• Multilevel Planning

• Supply Planning

• Rough Cut Planning

• Response Management

• Embedded Analytics

• Exception Management