SAP IBP brings your Supply Chain Planning processes together under one roof.
Horizontal and Vertical Integration
SAP IBP addresses Integrated Business Planning. This term refers to Planning processes, Planning levels, functional areas, and information signals, as described in previous unit.
A typical Supply Chain has to address strategic to more day-to-day operational level Planning. SAP IBP makes this possible by allowing flexibility to work at different Planning data and time granularities. As data can be viewed at different levels, it is possible to use the same data for Strategic as with Operational Planning. For example, you can run Demand Planning and Supply Planning in the tactical time frame weekly or monthly. In addition, you can also run Inventory Optimization and Demand Sensing daily or weekly.
Traditional Supply Chain Planning is done on quantities that are relevant for the operations, for example material pieces, metric tons, machine hours, or worker hours. Introducing monetary figures to the Planning process supports two outcomes with high business impact: profit-driven decision making and Planning based on a single set of numbers as indicated on the slide.
Integrated Business Planning is the process used to identify and address Supply Chain challenges, risks, and opportunities. Oliver Wright provided a definition that you can read in the figure. The balance of demand and supply is typically associated with Sales and Operations Planning. However, SAP IBP extends the principles of Sales and Operations Planning across the Supply Chain, and links Strategic and Operational Planning.
SAP Best Practices for SAP IBP describe in detail how to settle this link through Planning processes, Planning levels, pre-configured model entities, and Planning models.