SAP7F, based on flexible master data, has become the default sample planning area recommended for order-based planning (OBP) projects since 2211. Therefore, in this course, we discuss only SAP7F and Real Time Integration.
SAP Integrated Business Planning for Supply Chain (SAP IBP) is a cloud solution based on SAP HANA Technology.
The following figure shows the different modules within the SAP IBP Landscape and the processes they support. The modules in SAP IBP cover the core supply.
The supply functionality of SAP Integrated Business Planning is designed to consider all data in the current data model and help to create a constrained, feasible plan. This works using both simple models and full-scale optimization tools.
Response management is an advanced function that reads live sales orders and matches those with available stock and receipts to give accurate response times within the already constrained plan.
Order-based planning (OBP) 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 considers, for example, planned orders, production orders, sales orders, and purchase orders. Compared to the time-series-based planning functions of SAP Integrated Business Planning, the order-based approach takes a shorter-term view.
It also provides a constrained demand plan as an output for further supply processing in other planning systems, such as, SAP Advanced Planning and Optimization, or SAP ERP solution: SAP S/4HANA (SAP's Business Suite for HANA, which is SAP's fourth-generation ERP solution) or SAP ECC (SAP Enterprise Central Component, which is SAP's third-generation ERP solution).
SAP IBP for response and supply displays supply requirements and plans across the supply network locations and through levels of the Bill of Material (BOM).
Across industries, demand is volatile, lead time is higher than the required customer service time, and inventory holding increases costs thereby making an organization's supply chain less agile. These factors establish a need for effective response and supply planning.
For global organizations with complex supply chain network structures, efficient response and supply planning is extremely important for achieving desired service level.
SAP IBP for response and supply solution enhances the profitability of the organization by adding value through the following:
- Improve on-time delivery performance by replenishing inventories frequently based on the latest information about stock levels and demand forecasts
- Improve supply chain FTE productivity by reducing manual effort in the identification of supply chain problems and taking corrective action
- Reduce customer churn by improving service levels with the availability of the right products in the right quantities at the right time
- Reduce days in inventory by utilizing what-if analysis capabilities to minimize inventory required for achieving desired service level
- Reduce revenue loss due to stock-outs by utilizing what-if analysis capabilities to respond to changes in supply and demand
- Reduce total logistics cost by efficient management of transportation
Tactical is classified typically as the Time-Series Optimizer, as heuristics is also a part of the SAP Integrated Business Planning for sales and operations component. This is seamlessly integrated into the rest of SAP IBP planning processes and is part of the SAP IBP Unified Planning Area.
Operational and response are part of order-based planning and can create three elements (planned order, purchase requisition, stock transfer requisition) as part of the planning run.
The first part, Operational Supply Planning, generates supply plans and allocations.
The second part of Response management is a reconfirmation of Sales Orders.
During the reconfirmation process, which is typically run on a daily basis, the sales order confirmation dates may be changed to reflect the current material availability date. For example, if a truck breaks down on way to warehouse or for some reason the supplier does not send components, there would be a shortage of finished products.
Sales orders are then reconfirmed based on the priority, reflecting the current short supply situation.
There are multiple runs described later in detail that accomplish different functions.
In short, SAP IBP for response and supply solution can also create an Allocation Plan, as well as updated Sales Order confirmations.
The supply planner covers material flow from supplier to DC, and the response planner from DC to the customer (sales orders and forecast). SAP IBP for Response and Supply provides specific views designed to meet the business requirements.
Supply Planner Views
- Periodic view on projected stock with aggregated planned demands and receipts
- Stock projection view with a focus on supply shortages and detailed demand and receipt information
- Periodic Allocation view in Excel Front end and Planner Workspaces allowing for manual adjustment of allocations
Response Planner Views
- View Order Confirmations with gating factor indication and link to order item detail information
- Periodic Allocation view with allocations and allocation consumption at various planning levels
- Root cause analysis with detailed order network analysis and gating factor resolution
- Prioritization rule definition
- Excel views and Planner Workspaces for periodic information on projected stock