Companies face a lot of uncertainties in managing supply chains. Not only that, we are constantly bombarded by competition in meeting customer needs better than us with shorter delivery lead times and lower supply chain costs, but we are also sidetracked with local and global events that we never experienced in the past, such as the global COVID-19 pandemic and the Texas winter freeze. This drives supply chain disruption. Is there a way to address this?
The Supply Chain Challenges
To be efficient in addressing an issue, we need to know the challenges we face.
- We use a lot of different systems for our forecasting, demand, capacity, production, procurement, and inventory planning. They are consolidated into Excel spreadsheets. It takes time to get the data, review, and validate its accuracy before we decide and act.
- Our team is located across multiple geographies and remote locations. We cannot arrive on a consensus unless we get everyone to agree on a supply chain plan.
- Is it wise to fulfill the needs of a demanding customer by incurring significant costs? How can we better decide whether to fulfill or not, especially if supply is limited?
- It takes time to respond and fulfill demands, especially on abrupt changes brought by these local and global events since we don’t know our supply situation.
- Customers say they don’t need it any more once the delivery took place. It incurs costs for us. Likewise, suppliers say they don’t have the materials to fulfill a purchase order at the time when we need these materials to produce a critical customer requirement. How can I collaborate effectively with our customers and suppliers?
SAP Integrated Business Planning for Supply Chain (IBP) is a cloud-based solution that combines sales and operations (S&OP), forecasting and demand, response and supply, demand-driven replenishment, and inventory planning. Other features include supply chain analytics, what-if simulation, alerts, customer and supplier collaboration, and Excel front end.
- Scalable and Comprehensive Cloud-Based Supply Chain Planning System: The SAP IBP system covers the full spectrum of supply chain planning process functionality. It can be deployed in modular fashion to address simple requirements in as few as 2 – 4 months to realize its value.
- Customer Demand Fulfilment: The SAP IBP system has a customer segmentation capability based on customer’s revenue size. Therefore, planners would know immediately if a customer’s demand needs to be fulfilled quickly due to the customer’s contribution to the business. The IBP system’s cost-optimization capability can provide details on how much it will cost the company to deliver immediately to this customer versus regular delivery methods.
- Engage Customers and Suppliers Real Time: The SAP IBP system has an extended feature to allow customers and vendors to update their commitments directly into the SAP IBP system. It generates alerts for under and over commitments needed to adjust plans before it is too late.
- Fast Response to Abrupt Demand: The IBP system provides an inventory snapshot across multiple plants and distribution centers with an ability to reallocate these inventory stocks to fulfill a demand. Rules can be defined to allow or disallow this reallocation.
- Team Collaboration: The SAP IBP system has a collaboration tool that shares discussions, issues, solutions, and tasks across the team comprised of demand planner, supply planner, sales, marketing, and finance executives. This tool can be used by the team to review and track demand and supply reviews, align with annual operating plans, and finalize the consensus plan. This provides a single system to record all of these activities for reference. Team can use SAP IBP Excel Add In for ease of use.
SAP IBP is a cloud solution that can be deployed as a standalone or connected to your SAP systems or to your third-party ERP system.
We are interested. Where do we start?
We can arrange a free assessment to understand your supply chain issues and provide recommendations on how SAP IBP can help address these issues. Send us a quick request via email at email@example.com.