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Utilizing Inventory Planning and Optimization

<div id="content"><div class="kalturaVideoLessonWrapper"><div aria-label="" class="kalturaVideoLessonContainer" data-testid="video" id="1_cubqztko"></div></div><p tabindex="0">The inventory planning process consists of the following steps:</p><ol><li tabindex="0">Validating data inputs</li><li tabindex="0">Running and reviewing the inventory plan</li><li tabindex="0">Analyzing what-if scenarios</li><li tabindex="0">Approving and updating the inventory plan</li></ol><div class="kalturaVideoLessonWrapper"><div aria-label="" class="kalturaVideoLessonContainer" data-testid="video" id="1_kzjb7czh"></div></div><img style="max-width:900px;max-height:none" class="image 1_1_landscape" title="Modeling Variability. Known variability can be modeled as Key Figures or Master Data." alt="Modeling Variability. Known variability can be modeled as Key Figures or Master Data." src="/service/media/IBP2400_2502_en-US_media/IBP2400_2502_en-US_images/Inventory Optimization.png" tabindex="0"><div class="imageCaption"></div><p tabindex="0">For the inventory optimization process, known variability can be modeled as key figures or master data as shown in the figure, Modeling Variability.</p><div class="kalturaVideoLessonWrapper"><div aria-label="" class="kalturaVideoLessonContainer" data-testid="video" id="1_vhj5nbae"></div></div></div>

Inventory Planning and Optimization Process

How to Validate Data Inputs

How to Optimize a Multi-Stage Inventory

How to Run and Review an Inventory Plan

How to Approve and Update an Inventory Plan

Discovering SAP IBP for Inventory Planning and Optimization

Inventory Planning and Optimization Process.mp4

Rev_Inventory Optimization Process and its Frequency.mp4

The definition of the process frequency and who is responsible for it is particularly important. This definition should be created to set up the SAP IBP system according to specific requirements. The inventory optimization process relies on one set of inputs and outputs, one common planning area for all SAP integrated business planning components, sales and operations planning, demand, inventory and supply. Demand information like forecasts, Forecast errors or forecast coefficients of variation will be used as input for the inventory optimization process and will be provided from demand planning within SAP IVP sales and operation planning or SAP IBP for demand. Supply planning additionally provides planning parameters or master data as input for the inventory optimization process, such as lead times, lead time variances, or lot sizes. This data will be provided from the Supply Planning within SAP IBP Sales and Operation Planning or SAP IBP for Response and Supply to SAP IBP for Inventory. In SAP IBP for Inventory, inventory parameters will be calculated based on the provided input data during the optimization planning run. Calculated inventory parameters results, such as safety stocks, target inventory positions, reorder points, and target service levels will be provided to the supply planning within SAP IBP sales and operation planning, or SAP IBP for response and supply.

Multi-echelon_Optimization.mp4

Validate_Data_Inputs_Final.mp4

Inventory planning requires several data inputs. Before running inventory optimization algorithms, it's crucial to ensure that the correct data inputs are in place and consistent. This demonstration will show you how to review some of these data inputs. First, we need to create a favorite view that we will use for our data review. We'll base this favorite on an existing template in the system. To select the template, we navigate to the Planning view area, click on New View, and then select From Template. A pop-up window will appear, displaying a list of existing templates. We will choose a template for our input data review. Once selected, all imported data will be adjusted, and the templates will be attached and visible. Next, we open the workbook settings on the left. Here, we can assign our planning scope, which in this demonstration is scope 01. We can also assign different versions and scenarios. For the first entry, we assign a workbook filter. For this demonstration, we select a filter from our product family, including only our specific product family. After closing the workbook settings, we click OK to apply all the settings from this template. Once the planning book is populated, we can see that the data is visible as specified in the template, including the product family filter. In the final step, we create a favorite for our specific data collection view. To do this, we go to the planning section and select Add to create our favorite. A pop-up will appear, asking for a name for our favorite. We'll name it IOInputsDataReview01 and add it. After refreshing, the header of the planning view will display the name of our favorite. In the planning view favorites list, we can now see our newly created favorite as an available selection. As previously mentioned, a workbook filter has been applied, and data is available for our demand and inventory planning. The key figure demand focus, for example, will be populated by the demand release data. Finally, we want to check all the data on the production input side. By selecting the product input hub, we can verify that all data, including production lead time, production lead time error CV, production minimum lot size, and production increment lot size, is correctly entered into the system for the inventory optimization plan.

Multi_Stage Inventory_Final.mp4

The multi-stage optimizer is an advanced algorithm that calculates and recommends safety stock quantities for all stopping nodes in the network. Unlike the traditional single-stage approach, this algorithm considers the optimal allocation of stock among the connected nodes at different network stages, reducing the overall stock required. In this demonstration, we will activate this advanced planning algorithm. First, we will create a new favorite from our planning results view by reusing an existing template in the system. Navigate to Planning and select New View from Template. A pop-up will appear with all existing templates. Select the template for planning results. All tabs will be loaded for this template. Next, we will make our adjustments. First, we want to work only with our product family, so select the workbook filter for our product family. Additionally, limit the scope of the workbook to a specific submit work in the Planning Scope section. In the Versions and Scenarios section, decide if you want to see data for a specific version or scenario. Close the workbook settings and check the data settings on the Demand Input tab. Here, you will see that the data is on a weekly level, based on location and product ID. In the Key Figure section, verify that the key figure's Safety Stock SOP and Recommended Safety Stock have been assigned. Finally, select OK to load the data. Once the data is populated, you will see the data based on our workbook filter has been loaded. Save this selection in your favorites by selecting Favorites, followed by Add, and name the example IO Planning Results 01. After adding the favorite, the name will be displayed at the top of your screen. Additionally, if you open the favorites section again, you will see I-O planning results 01 added to the list of favorites. Before starting the global multi-stage inventory optimization run, verify the data. Ensure that the recommended safety stock is planned for all combinations, and that the safety stock SOP is maintained with a zero value for all data, indicating no stock is currently protected at these planning levels. Next, run the global multi-stage inventory optimization. Select the application job section, choose inventory planning, advanced, and initiate the run. A pop-up will appear showing the settings for the planning run, such as filters and network. The next pop-up will show data filters, versions, and the network to be used in the planning run. Ensure the global multi-stage inventory optimization job is pre-selected and start the job. Monitor the status of the job, which updates every five seconds. If the job ends with a status of failed, select navigate to status and the system will guide you to the application logs. If the job ends with a status of finished, select OK and refresh the planning view. Verify that the key figure recommended safety stock now has values. This value is the planned result of our global multi-stage inventory optimization run.

Learn how to adjust safety stock values in your inventory plan by comparing and simulating changes to ensure efficient planning and execution. Follow step-by-step instructions for successful inventory management.<br><br># This description was auto-generated #

Rev_Run_ReviewInventoryPlan_Final.mp4

After the executive meeting, once your inventory plan is approved, you might still need to make some adjustments to your safety stock. In this demonstration, we will show how to execute these changes by comparing the recommended safety stock values to what we need to plan. First, let's review our starting point for planning. We'll reopen our favorite, created in a previous demonstration, to check the planning results. As shown before, we have recommended safety stock available for our planning combinations. For a given example combination, we have a recommended safety stock of 557. To make adjustments, we switch to a different view on the Detail Results tab. This tab provides more defined key figures. Here, we can verify the recommended safety stock value of 557 for the example. Below this key figure, there's another key figure called Safety Stock Adjusted, where we can, for example, input a value of 350 and start a simulation. To start the simulation, go to the Data Input section, select the entry for Simulate, and choose Start Simulate Basic. Once the simulation is finished, the value of 350 will be populated into the key figure Final Safety Stock from IO, which is a calculated key figure. If no manual adjustments are maintained in the safety stock adjusted key figure, the values from the recommended safety stock will be taken over and displayed in the final safety stock from IO. If manual adjustments are made in the safety stock adjusted key figure, these values will be prioritized over the recommended safety stock values and will be displayed in the final safety stock from IO instead as demonstrated. To save the simulation results and store them in the database, select Save Data in the Data Input section. This action will store the simulation data in the database.

Approve and Update An Inventory Plan Final.mp4

Welcome to the final stage of the inventory review process, approving the plan. This critical step ensures that safety stock quantities are ready for supply planning and executive meetings to define mid- and long-term inventory policies. In this demonstration, we will transfer the values from the safety stock key figure used in SAP IBP for inventory to the safety stock key figure used in upcoming supply planning processes. Let's start by reviewing our current inventory plan. We'll revisit our favorite planning results from our previous demonstration. On the demand input tab, you'll find the key figure safety stock SOP, which is the safety stock key figure used in the upcoming supply planning processes. As you can see, this key figure has not yet been maintained. Our next step is to transfer the planning results from inventory planning to supply planning. To do this, we need to execute another copy operator. Navigate to the application job section, select the copy operator, and initiate the run. A pop-up will appear, showing the filters, units of measurement, and selections that will be applied. Ensure the copy final safety stock for IO to safety stock for SOP planning operator is preselected, then start the job by selecting the run icon. Enter the status of the job, which updates every 5 seconds. If the job ends with a status of Failed, you can select Navigate to Status, and the system will guide you to the application logs. If the job ends with a status of Finished, select OK and refresh the Planning view. Once the data has been refreshed, you will see that the key figure Safety Stock SOP is now filled with the safety stock values from the Inventory Planning. This key figure will be used as an input for the supply planning process.