SAP IBP is an integrated approach that involves a multi-stage inventory optimization solution that enables businesses to execute seamless sales and operation planning. It provides support for efficient supply planning and management.
However, to ensure its seamless implementation as well as execution there are a few key considerations that must be taken into account:
Synergy in the supply chain is a must. The objective is to generate optimal target inventory positioning to ensure minimum cost and maximum value. The view of the supply chain is taken into consideration with the demand and supply relationship.
Demand is propagated through the entire supply chain paths based on certain parameters like the lead time, lot sizes of the product, holding costs, and uncertainty is also factored into it. One must have a holistic view of the entire supply chain to ensure there is harmony across the multiple stages in the supply chain otherwise you will end up risking too much or too little stock.
It is important to understand the scope of integration. It can help build an effective solution to bring together different verticals of SAP IBP sales, and operations planning, marketing, and finance. As a business, you must identify the type of integration that you may need and get benefitted keeping short as well as long term in view.
- Quantify aspects of time with varying stock
The focus of the IBP for inventory optimization is to ensure that the requirements of the internal service are met at each stage driven by the forecast. It is evaluated based on the costs, lead time, size of the units, and uncertainty factors in supply & demand. The objective is to have the right balance of products to achieve the service level and meet the fluctuating demands.
- Identify opportunities to improve the productivity
Planning is the key to ensuring success. The different teams in your organization must understand the different process drivers through the IBP that helps drive value. They must take up the monitoring role to ensure supply chains are meeting their objectives against different service levels.
IBP for the inventory is a revamp of EIS with certain improvements to leverage the benefits of HANA. IBP for inventory and integrated business planning can run single-stage as well as multi-stage algorithms in sync with the added functionality to check the expected demand loss in a specific plan.
It allows the organization to improve its present situation without moving to the next stage. It also enables us to adopt different solutions depending upon the complexity of the situation and cost-saving aspects.
There are technical as well business challenges in the organization that are to be considered before embarking on the implementation of the IBP for inventory. A successful business will be able to quantify the impact of optimized time-varying stock throughout the supply chain.
If you are looking for support for improved business processes and SAP IBP Optimization solutions for your business challenges then get in touch with our professional team at SCPLAN consulting.
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