SAP IBP includes different integrated components under one roof powered by SAP HANA and supported by a technological platform to tackle different planning tasks.
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SAP Integrated Business Planning for Response and Supply
Business Benefits with SAP IBP for response and supply:
- Generate feasible supply plans to meet demand with minimum inventory and efficient capacity utilization.
- Gain upside revenue and competitive advantage rapidly adjusting plans to seize demand opportunities and respond to supply disruptions.
As shown, 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. This algorithm is no longer available for new customers due to restrictions that can lead to unexpected results. These restrictions are documented in the online help.
- 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.
- The algorithms can be fine-tuned to your requirements via various primary parameters. An important parameter for the Unconstrained Heuristic is e.g. the "Carry Over Negative Projected Stock" that enable the planning run you to balance negative projected stock in later buckets.
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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 (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. Most customers only want to consider fixed supply elements during deployment. The consideration of different order types can be fine-tuned in the Available-To-Deploy Profile.
You can create such a distribution plan with the help of deployment planning in order-based planning
How can SAP IBP for Response and Supply enable you to Change the Game?
SAP Integrated Business Planning for response and supply allows tactical Supply Planning and simulations. Moreover, it is capable of providing material and capacity constrained operational supply plans to match demands and supply. The figure, Lower Order Fulfillment Lead Time and Higher On-Time Delivery Performance, presents results of a study conducted by SAP to measure the positive impact of SAP IBP over the delivery performance and the order fulfillment lead time.
Keep your Supply Management under Control with the Help of these Key Capabilities
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
Overview of the SAP Integrated Business Planning Supply Planning Engines
As explained in the video before, there are different solvers within SAP IBP solution: infinite and finite. These planning engines address different planning levels such as response, operational and strategic/tactical planning. Depending on how the data is stored, the engines can be classified in order-based or time-series oriented.
Within this course, as shown in the figure, Example of Planning Engines, three Supply Planning engines are explained as examples of different solvers to help you tackle planning challenges:
- The multilevel Sales and Operations heuristic
- The cost driven supply optimize
- The priority driven constrained demand