Empower Planners with Response and Supply Planning

Why is response and supply planning so important today? While companies are still facing challenges from an ongoing pandemic, the Russia-Ukraine war only adds to the disruptive landscape. Supply chain disruptions will continue to occur as part of our global new normal. Traditional planning approaches relied on monthly planning cycles with frozen planning horizons – without considerations for constraints.

In today’s environment, response and supply planning will allow you to react quickly to changes and fluctuations in consumer demand. It is imperative that companies plan against potential risks and proactively monitor their supply chains to course correct quickly.

Response and supply planning:

• Helps navigate supply chain constraints that are common today. Examples include, trade route limitations, route consideration rules, customer backorder permissions, time-phased production, or resource capacity.
• Gives organizations greater ability to fulfill customer orders. It is the most risk-adverse approach to order fulfillment, taking into account constraints, production, lead times, and costs.

Response and supply planning is an element of supply chain planning that navigates operational challenges to improve efficiency, accuracy, and speed. It allows you to create more intelligent plans, especially with regard to:

• Considering supply chain constraints
• Optimizing fulfillment
• Maximizing profit

SAP response and supply allows you to meet demand, manage inventory targets, and be efficient with capacity use. It evaluates unconstrained and constrained planning algorithms, supporting mid- to long-term supply planning.

Key features include:

• Empower planners with multilevel supply planning by giving them flexibility to decide what to include in the model or what to constrain the plan against. Allowing flexibility to model across locations and multilevel bill of materials. There are three algorithm options – unconstrained heuristic, prioritization, or optimization.
• Mitigate risk with tactical rough-cut planning balancing demand with supply while considering material constraints. Planners can create simulations and what-if scenarios based on flexible horizons, then compare them with embedded Microsoft Excel capabilities of SAP IBP or web-based dashboards.
• Boost agility with operational response management to overcome material scarcity. With this feature, you can create allocations when materials are scarce and determine realistic availability dates or create a deployment plan to achieve priorities or optimizations.
• Create consistency with synchronized planning after calculating the source destination and order quantities for planned orders, you can use a handover process to convert them into scheduled orders that SAP S/4HANA can sequence. Synchronized planning keeps planning in SAP S/4HANA and SAP IBP in sync through a roundtrip integration cycle.

Supply chains are often a struggle, because they involve many components, coupled with alignment among teams all working toward a common goal. In this article read how advanced analytics can support your inventory planning and management to stay competitive. Discover Enterprise Supply Chain Towers that integrate data from several sources to enable organizations to measure supply chain performance and make improvements.

Pick up your pace with supply chain planning. In today’s volatile environment what is imaged in the planning phase can look quite different once it is implemented. Organizations need the ability to pivot quickly and respond proactively when unanticipated situations occur.

Key takeaways for SAPinsiders:

1. Act on digital transformation: Consider what type of digital technology is most appropriate for your organization. Cloud, big data, robotic process automation (RPA), artificial intelligence (AI), or machine learning (ML) can be used to transform the quality of your planning decisions.
2. Diversify the supplier base. Without compromising quality, consider multi-sourcing and diversifying geographic locations.
3. Focus on reaction times. Reduce the time it takes to set up new suppliers, transportation routes, or production facilities.
4. Improve your lead time. Shape the demand when needed by shifting consumers from product A to product B and informing them about delivery advantages.
5. Reshape your portfolio. Reduce portfolio complexity with fewer SKUs to streamline production and fulfillment.
6. Pivot to think externally, not just internally. Invest in intelligence and true integrated business planning solutions. Open your communication channels using intelligent business networks for more efficient supply chain planning.