# Demand driven-replenishment

Objectives
After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

• understand the innovations for demand driven-replenishment

## What's New in SAP IBP for demand-driven replenishment and inventory

You can now manage higher demand variability in your forecast error calculations by basing the calculation of your Coefficient of Variation (CV) measure on the Standard Deviation of Forecast Error (SDFE) method

Previously, you could only base the calculation of the Coefficient of Variation (CV) measure on either the Mean Absolute Deviation (MAD) or Mean Absolute Percentage Error (MAPE) methods. These methods use the following formulas to determine the CV of your forecast error calculations:

• Forecast Error CV = 1.25 x MAD / average forecast (IOFORECAST) or average sales (IOSALES) value
• Forecast Error CV = 1.25 x MAPE

You can now also base the calculation of your forecast error CV on the Standard Deviation of Forecast Error (SDFE) method, which uses the following formula:

Forecast Error CV = SDFE / average forecast (IOFORECAST) or average sales (IOSALES) value

By default, the calculation of your forecast error CV is based on the Mean Absolute Deviation (MAD) method. To use the Standard Deviation of Forecast Error (SDFE) method, create or edit a forecast error calculation profile in the Manage Forecast Error - Inventory Optimization app and perform the following steps:

• Go to the Group of Forecast Error Measures section of your profile.
• Under Output Settings, choose the Coefficient of Variation (CV) option.
• In the Output Key Figures column, specify your desired output key figure.
• In the Calculated Based On column, select the Standard Deviation of Forecast Error (SDFE) method from the dropdown list.

After creating or editing your forecast error calculation profile, you can use the Application Jobs app or the SAP Integrated Business Planning, add-in for Microsoft Excel to run a Forecast Error Calculation job that is based on your profile.

Manage daily lead-time inputs and day-level inputs for both master data attributes as key figures Production Lead Time (PLEADTIME) and Transportation Lead Time (TLEADTIME) using global configuration

New PLEADTIME_UNIT and TLEADTIME_UNIT parameters under the Inventory tab in the Global Configuration app to allow customers to select day- or week-level inputs. Note that both parameters default to week level

Previously, production and transportation lead time inputs could only be consumed by these operators in units of weeks. However, the PLEADTIME_UNIT and TLEADTIME_UNIT parameters now enable you to decide whether inventory operators should consider these inputs in units of weeks (the default option) or days.

The Production Lead Time (PLEADTIME) and Transportation Lead Time (TLEADTIME) attributes as key figures are used as inputs for inventory simulation and scenario planning by the following inventory optimization operators:

• Global (multi-stage) inventory optimization
• Decomposed (single-stage) inventory optimization
• Calculate Target Inventory Components

In the Inventory Profiles app, you can now do the following:

• Export your Inventory Profiles list to a spreadsheet
• Share inventory profiles and your Inventory Profiles list with colleagues
• Save inventory profiles and your Inventory Profiles list to your SAP Fiori launchpad
• Filter the Inventory Profiles list by editing status
• View the saved version of an inventory profile while you edit it

Since SAP IBP 2111 (Q4 2021) release upgrade, a migration script was delivered that moved existing inventory operator framework to an inventory planning profile framework for the following:

• Standard inventory operators:
• Global (multistage) inventory optimization
• Calculate Target Inventory Components
• Decomposed (single-stage) inventory optimization
• Customized inventory operators: Any inventory operator with a unique name and a defined planning horizon.

This migration supported the migration from Job Template Inventory Optimization Operator to Job Template Profile Based Inventory Optimization.

Starting with the Q4 2023 IBP 2311 release, Job Template Inventory Optimization Operator will be obsolete resulting in:

• The Job Template Inventory Optimization Operator will not be visible for selection in Application Job Templates.
• Existing Job Templates defined with the Job Template Inventory Optimization Operator will fail to run.

As a result, recommend to edit/replace Job Templates using Job Template Inventory Optimization Operator with Job Template Profile Based Inventory Optimization.

The Supply Chain Network app is now compatible with the SAP7F sample planning area for order-based planning (OBP) based on flexible master data.

With this app, users of SAP7F can now create network charts that visualize their supply chain data.