Delivering Business Impact with SAP IBP

⇨ When companies contemplate implementing SAP IBP, they often doubt if SAP IBP implementation is a surface-level incorporation of "buttons and features" or a genuine business transformation.

⇨ SAP Integrated Business Planning for Supply Chain solution enables to effectively anticipate future demand while maintaining profitability.

⇨ SAP IBP is an essential component of the broader SAP S/4HANA ecosystem and has been purpose-built to help businesses of all types manage complex supply chains and streamline operations across various levels.

SAP IBP implementation in 90 days

When companies think of implementing SAP IBP, they often doubt if SAP IBP implementation is a surface-level incorporation of “buttons and features” or a genuine business transformation. For companies, ideating on the risk reduction strategies and how to achieve positive business impact are also of significant concerns. During SAPinsider’s Vegas 2023 event, Thomas Brassøe, Partner, Implement Consulting Group presented a session on “How to Implement SAP IBP – Best Practices and Pitfalls” and discussed the methodology they used to successfully complete SAP IBP implementation projects. In a nutshell, the methodology included:

• Establishing a clear purpose and a well-defined scope that can be broken down into manageable parts.
• Executing SAP IBP implementation projects in an agile manner, while still making important design decisions.
• Best practices and potential pitfalls to avoid when implementing SAP IBP.

SAP IBP is a cloud-native offering utilizes SAP HANA capabilities to integrate sales and operations planning (S&OP), forecasting and demand, response and supply, demand-driven replenishment, and inventory planning. It delivers streamlined, automated supply chain planning processes, supported by advanced machine learning algorithms and planning functionalities. Additionally, it seamlessly integrates with SAP Supply Chain Control Tower and other solutions. The SAP Integrated Business Planning for Supply Chain solution enables to effectively anticipate future demand while maintaining profitability. With its comprehensive supply chain analytics, what-if simulations, alerts, and other features, SAP IBP empowers you to stay ahead of changes and enhance your responsiveness to market demands.

According to Brassøe, if the success of a company depends on adapting to market fluctuations, it’s likely that they have encountered some of the below mentioned challenges and understand the importance of a robust Sales and Operations Planning (S&OP) system.

• Volatile forecasts: Drawn from a broad (even global) sales organization reacting to both rapid and uncertain changes in customer needs.
• Seasonality: Fluctuating demand due to seasons, setting high demands on stock build-up and capacity planning.
• Promotion planning: Promotions are planned but rarely fully specified until close to delivery dates.
• Short lead times: Rapid changes in consumer behavior requiring fast reaction to changes in customer orders.
• High inventory turnover: A short product lifespan drives high inventory turnover and a need for close monitoring and management of stock levels.

By enhancing S&OP procedures and bolstering the organizational capacity to make prompt decisions, an SAP IBP solution can provide:

• Transparent forecasting
• Sales target vs forecast gap closing
• One consensus demand plan
• Capacity overview and scalability
• Scenario planning and simulations
• Right-sizing of inventories

These, in turn, can have a strong impact on an organization’s profitability and can provide the following benefits:

• Ability to deliver: Delivering the right products in the right quantity and quality when and where customers need them.
• Balancing capacity: Ability to respond to fluctuations in demand and adjust capacity accordingly.
• Working capital: Making cohesive cross-functional decisions that optimize allocation of working capital.
• Risk assessment: The ability to assess risk and make decisions that allow the company to seize opportunities.

SAP IBP in 90 days

Brassøe revealed that if organizations need fast-track improvements in their supply chain planning, they can get up and running with SAP IBP in 90 days by following best practice S&OP approach, which applies a proven method for tailoring and creating fast, real impact. The approach uses an accelerated project approach to minimize the time to impact by delivering several minimum viable solutions and includes the below-mentioned aspects:

• Define the impact case for the IBP process at the start of the project and define behavioral KPIs.
• Use the resulting impact case to plan where to focus the efforts for early impact realization from IBP.
• Build the IBP project plan for deliverables and implementation according to impact prioritization.
• Focus on creating quick learning and scale fast when a working IBP prototype is in place.
• Define key design decisions from the beginning to agree on scope and control potential change requests.
• Biweekly on-site workshops to ensure fast progress & adequate time in-between for preparations & reflections

As Brassøe highlights, SAP IBP solution can be delivered on-site, virtually, or through a combination of both within a 90-day period. This solution strengthens S&OP processes and enhances teams’ proficiency in making precise forecasts, planning scenarios, and integrating resilience into the supply chain. SAP IBP provides the following benefits:

• Clear and transparent forecasting
• Reduction of gaps between sales targets and forecasts
• Consensus demand plan creation
• Capacity overview and scalability
• Scenario planning and simulations
• Optimization of inventory size

SAP IBP is an essential component of the broader SAP S/4HANA ecosystem and has been purpose-built to help businesses of all types manage complex supply chains and streamline operations across various levels. Each module within the solution features a standardized data model, which provides real-time visibility of the supply chain. This real-time view can be a significant asset in making informed business decisions. Moreover, the integrated planning environment of SAP IBP is dedicated to facilitating collaborative planning cycles. It allows multiple users to perform various analysis scenarios and simulations and can also manage any exceptions through alerts. The overall effect is an acceleration of the planning process and better decision-making. SAP IBP also optimizes the user experience with two interfaces, planning through a web interface and decision-making using Microsoft Excel.

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